x

The Behavioral Psychology of Online Shopping — iAcquire EDU

In our third installment of iAcquire EDU, we inspect the elements of your site you can test to increase transaction rates.

The Utilitarian v. The Hedonic

First let’s consider the different motivations people have when they seek out transaction opportunities. Some people want to feel a practical need– this would be utilitarian — and others enjoy shopping for the experience of it. The latter can be considered hedonic because the main goal is to fulfill desire and gain pleasure.

A 2001 study explored how these two schools of thought played out in online transactions.

Consumers with a utilitarian view were concerned with purchasing products quickly and efficiently, and reducing sources of irritation along the way. That’s why it’s important to optimize your conversion funnel and reduce barriers like having to sign up for an account before you buy something or having to fill in too many form fields to get to the next step.

On the other hand, the study found the appeal to the hedonic to be equally important. They concluded that in order to foster people’s enjoyment surrounding transactions, online shopping shouldn’t be a mere information system.

They point to the example of online grocery stores that include recipes, product preparation videos and interactive menus as an ideal setup to inform and evoke emotion at once.

Peapod is a great example because the product description of items includes the details like directions and recipes that you’d be able to read if you had the package right in your hand.

Customization

You also want to think about appealing to the customer through customization. On a surface level it would seem like the more you allow a person to customize to their personal wants and needs, the better their experience will be and the more likely they are to complete a transaction.

Delving into the psychology behind customization, however, suggests otherwise. One study done in 2012 uncovered that since people rarely know exactly what they want, customization can be overwhelming.

The researchers suggested that to combat this, businesses post a starting price, as in when you see “prices starting from $X” The contrast between this price and the possibilities that emerge as a person customizes will help focus in the appeal of being as unique as you want to be.

Apple makes use of base prices with each of their products.

According to Experian Simmons’ Winter 2013 study, 42% of people who shop online say that they seek approval with their purchases more than the average consumer. So people may actually fear being too different in their transactions. Providing a baseline gives them a comfortable starting point for their customizing experience — especially online when people can’t look over to see what the people around them are buying.

Wait Time

Another factor you can test is wait time. This one is all about perception.

Performance expert Stoyan Stefanov found that the average person perceives page load time as being 15% slower than it actually is, and will later recall their experience as being 35% slower than in actuality.

So besides making your page load as quickly as possible, how do you make it feel faster? Using spinners and progress bars can keep the user engaged and takes away uncertainty — something we’ll talk more about in a minute.

Progress bars can also make a page feel slower because people associate them with waiting. If you have a less than five second page load time, you’ll want to skip those completely.

Expedia’s ironic waiting page that reads “Hurry! Prices and inventory are limited” is gone in a flash and keeps up the message of urgency.

Waiting for a transaction doesn’t just mean waiting for pages to load, either. The number of pages between a product page and completing a transaction is significant. In a recent study done by Visa, 49% of people surveyed indicated that having to set up an account with each new online retailer they visit is the most annoying aspect of online shopping. Let people skip ahead to the purchase point so those in a rush don’t head to another website when they learn they have to create a profile before completing their transaction.

Uncertainty

In 2004 researchers at the University of Singapore examined the factors that make an online shopper feel uncertain about wanting to proceed with a transaction.

Put simply, people don’t like to be unaware of elements that will directly affect their transaction, such as delivery terms, shipping cost, and return policies. The study concluded that the clearer and more readily available a site makes these terms, the better.

Zappos, known for great customer service, has a “learn more” tab right at the top of their site that describes their shipping policies.

Even including simple information like identities of people to contact and the physical locations of the store or goods can go a long way because the perceived uncertainty about the reliability of the brand is lessened.

Experian research shows that a fair percentage of people, 35%, ranked themselves “Below Average” informed consumers. By providing more information in an easy to digest format, you may see increased sales as you reduce the uncertainty potential customers face.

Add Value

The University of Singapore also discovered that a large majority of online consumers feel that online stores are not worthwhile because they do not offer a price advantage over traditional retail stores (especially because overseas sites charge a premium to ship to China).

They suggested that to combat this, online retailers have to add value in other ways, such as automatically converting to the consumer’s preferred currency at the start of the shopping experience and offering several payment methods.

An important consideration is that 70% of online shoppers surveyed by Experian admitted to being Average to Far Above Average impulse shoppers. If people have to click over to a currency conversion site to determine the price of the item they want or go on a hunt for their wallet if the site doesn’t use PayPal or something similar, this could put a huge damper on the impulsiveness of their transaction and completely prevent them from making a purchase.

Share your questions and other shining examples of optimized transaction processes in the comments. If you haven’t already, subscribe to iAcquire EDU so you won’t miss our next video  .  In Lesson Four we’ll be talking about the psychology behind creation.