Consumer psychology retailers should know

Consumer-Psychology-Avasam

Many retailers assume that they know what they are doing when it comes to getting their store and their other sales channels set up, and while there are some elements that might be intuitive, there are other tips and tricks that you can apply to your business. In this post, we’ll be looking at research from consumer psychology that you can make the most of, and that can help you to make more sales.

The history of consumer psychology

A lot of the connection between psychology and consumer behaviour is linked with Walter Dill Scott’s studies from the start of the 1900s, when Scott wrote the book The Psychology of Advertising in Theory and Practice. Research continued through the 1940s and 50s, when the field was heavily criticised for not using standardised and statistically accurate methods.

From the 1950s onwards, researchers started to apply knowledge from other disciplines to the field, such as from sociology, anthropology, and the detailed research that was emerging from clinical psychology. This increase in knowledge meant that ideas like using reference groups, building brand loyalty and the use of thought leadership as a way to build trust became popular.

Later, techniques such as market segmentation, use of demographic data linked with household lifestyles and the socioeconomic status index was applied to help increase sales further – all of which are still commonly used by people in the industry today. Research continues, with different research techniques from other disciplines being used to increase the knowledge that we have as online retail continues to evolve.

What makes people buy?

You might have read about the psychology of buying before, and the reasons that customers actually make a purchase. The Fogg Behavior Model by B.J. Fogg at Stanford University is well known amongst retailers for helping them to identify ways that customers can be encouraged to make a purchase – although it can be applied to other behaviours too.

Motivation

Customers that are looking to make a purchase are doing so because there is a motivating factor for them – even if it is because they are bored and want something to look forward to, that is still a motivating factor. Other typical motivating factors include pain, pleasure, hope, fear, acceptance, and rejection – so if in some way, the customer is feeling any of those things, they will be looking for a solution.

Increasing customer motivation can be pretty hard to do. However, where customers have low motivation, you can potentially influence it with product badges, exit intent pop-ups (particularly where these contain additional discounts), native nudges to remind their shopper that their purchase is almost complete, notifications, social advertising, and email marketing.

Ability

Your customers will always be influenced by how easy it is to complete a purchase. That means if it takes a lot of time, or money, to complete their purchase, then they may opt not to bother. Similarly, if the product that could be the right solution for them is hard to learn how to use, or requires them to be trained before they can use it, they may decide not to buy the product.

Customers that have high motivation but have low ability can be influenced by making improvements to the user experience. For these customers, making it easy to complete a purchase with quick shopping options is key, and so you’ll need to consider using social media eCommerce so they can purchase without leaving their feed, one-click checkout, chatbots, and recommendation systems, amongst others.

Triggers

This is what causes a customer to decide to complete their actions. In eCommerce (and marketing), triggers are usually referred to as calls to action (CTAs). To increase the chances of customers completing their purchase, you can experiment with your add to cart buttons, checkout setups, product availability notifications, and Google Ads.

Key research from consumer psychology

There are decades of research from major brands and psychologists – and here are some of the most effective findings that you can apply to your business.

Impulse purchases at checkout

Those chocolate bars at supermarket checkouts aren’t there just in case you were hungry, or because you accidentally forgot to add your usual Dairy Milk to your trolley. They’re there to capitalise on temptation and make additional sales, which the retailer makes additional money from – especially with the pester power that children deploy on frantic parents that are trying to get out of there without spending even more money. Add to that promotions like two for £1, or buy two, get the third free, and it is easy to see why those additional purchases make supermarkets so much money.

When you’re setting up your website, it is well worth bearing this information in mind – since there are plenty of ways that you can apply this and make additional sales. Look at some of the most successful eCommerce websites and their journey to purchase – consider Amazon’s section that shows what “other people who bought this item also bought”, and how supermarkets make suggestions based on previous orders.

Colours matter

We did a deep dive into the world of colour psychology a while back, and how the meanings of different colours can impact on your brand. Although we’re all aware of the way some colours are linked with meanings, such as red implying ‘stop’ or danger, there are other, subtler implications to consider. Research has shown that:

  • Shades of blue in branding mean that the business is more frequently trusted, and products are perceived to be of higher quality. This may mean that the brand is more able to charge a little more for products – although this will be influenced by other factors, such as social proof.
  • Reds encourage customers to be more sensitive to price, because of the tendency of retailers to use red to draw attention to sales and discounts.
  • Orange tends to increase excitement in customers, and means the brand is seen as friendly. However, orange (being close to red in the colour spectrum) is also associated with low costs – which has only been underlined by a certain low-cost airline using orange in their branding.

Colour psychology is definitely not an exact science, and there’s a lot more to get into, so head for this post if you want to know more about how to make the most of it.

Language in your listings is critical

Having the right amount of information in your listings is essential – we’ve found countless listings online that have just a few words in the product descriptions. If you wouldn’t buy from a listing like this, then your customers won’t either, so it is well worth spending time on creating great descriptions. Customers are unlikely to bother to contact you with questions, so try and answer any questions that they might have in the listing.

When you’re creating the content for your listings, keep in mind that customers don’t experience products online in the same way as they do in store. You’ll need to use sensory language to build up a picture of the product in their minds – so, describing the softness of the fabric, or the scents that are in a cleaning product.

There are many marketplaces worldwide that you can list your products on, and while many of them will allow you to add listings in English, research shows that 75% of consumers are more likely to make a purchase from brands that provide information in their native language. Not only that, 90% of customers won’t buy from a website if they don’t speak the language. That means if you’re scaling your business internationally, you’ll need to use translation services – don’t rely on Google translations!

More is more

When it comes to your eCommerce website – whether it is built with BigCommerce or Shopify – having a large number of products in your inventory will encourage customers to buy from you. That’s because they’ll have confidence in your ability to fulfil their order. If you keep stock but you have minimal numbers of lines, you can add to your inventory by working with DropShipping suppliers. That’s simpler to do if you can access more than one supplier – which you can do easily with your Avasam account. (if you haven’t signed up yet, you can get a free trial here!)

Further, if you can group your products into separate subcategories – even if some products feature in several subcategories – then customers will find what they’re looking for much easier, and are likely to be inspired by other products in those categories. This means bigger basket sizes, and an increase in potential profits for you.

While having an abundance of products available for your customer is a good thing, scarcity can be used to help encourage customers to make their purchase too. Fear of missing out is real, so where particular products are selling fast, add a tag showing that they are trending, and you can also make sales by showing what other customers have been buying.

User experience is key

With so many ways to create a great eCommerce website (such as BigCommerce, which you can get a free trial of here!) there really isn’t any excuse for a poor user experience. If design isn’t your strength and you don’t have the resources to work with a web designer, then you can ensure you get it right by using a customisable template. Your design should be absolutely on point, from graphic design features to the choice of colours that you use. You’ll need to think about how your customers will browse your inventory too – so, layouts should aim to replicate

The speed that your website loads is essential too, because customers simply aren’t patient when they are accessing a website. A two second delay in your website loading can load to abandonment rates of up to 87%, and a very slow load time is bad for SEO, so your website is more likely to be listed near the top of search engine results for keywords that you’re targeting.

When it comes to checkout, needs to be easy, with as few steps as possible. Keep your shipping costs clear and upfront (most of us have abandoned a purchase after seeing high shipping costs), and ensure that your payments are secure, which means choosing a trusted payment gateway.

Price anchoring

The best way to make sales of a product is to place it next to a much more expensive product. That’s because customers are relying on the price of the other product to decide about the value of the product, and the deal that they’re getting. Everyone loves a bargain, after all!

You can use the price anchoring phenomenon when you’ve reduced prices too. Keeping the original price next to the discounted price can emphasise the amount that customers are saving, which (especially if the discount is a fixed-time offer) can encourage them to click through to checkout.

The power of nine

You might have wondered why so many stores use pricing that ends in nine – clearly, with so many retailers using it, there is something in it. This phenomenon has been observed by many retailers since a J.C. Penney study in the early 1900s, and even when the same item is available at a lower price with any other number, customers are more inclined to purchase the item that is priced ending in nine.

If your business focus is on luxury items, however, then you’ll need to avoid using nines in your prices – ending your prices in 5 or 0 are more successful to maintain the sense of luxury that customers are looking for when they’re buying this type of item.

Keep pricing simple

Prices that have fewer syllables in them are found to sell more. This means that rather than using a number in full – such as £1,499.00, removing the comma and decimal point so the price reads £1499 – will result in more sales. It is because the full price – with the comma and numbers after the decimal point – is seen as being longer, and so customers perceive the price as being higher, even though they are the same.

Customer emotions are powerful

While we’ll stop short of saying that manipulation is a good thing, there are some powerful ways in which you can harness the emotions of your customers to encourage them to make a purchase.

Tell stories

Humans have been telling stories forever, and storytelling is a really powerful thing. Our imaginations are able to conjure up more scenarios than have ever become reality, and that’s brilliant for your business – because by telling your story, you can help them to understand how you got to where you are now. That’s perfect for your ‘about us’ page, and stories on your listing pages can encourage purchases.

Story telling isn’t just for your website and your sales channels though – your social media channels are perfect for telling the stories of your products, your business, and sharing stories from other customers. As customers come to understand more about your brand, and see social proof from other customers, you’ll start to build trust with them too.

Build fear

Clearly, we’re not telling you that you should threaten your customers – but fear can be leveraged to encourage your customers to buy from you. Showing them the consequences of not buying, or using a particular product means that they will be compelled to take action.

This could look like evoking fear of missing out – especially if you have time limited offers available – and making the call to action really easy for customers to act on. Implementing the solution should be really simple, to ensure that customers can take those steps quickly.

Appeal to customer greed

Greed might be one of the seven deadly sins, but it is a valuable emotion to help encourage customers to buy from you. Getting more than they normally would is a huge motivator, so emphasise what they will lose if they don’t act quickly, and offer something free to their order if they act immediately.

Make them feel good about their purchase

Customers are becoming more socially conscious, and are looking to work with businesses that do good – so that they can make their purchases with less guilt than they might otherwise have had. That’s partly why brands like TOMS, that make a donation to a child in need, and other businesses that donate to charity on behalf of their customers, are so successful. The customer’s needs are met – including greed – and they’re buying where they can feel good about making their purchase.

Create a mutual benefit

Your customers don’t have to buy from you, so making them feel valued by you is a great way to create lasting relationships with them, and to encourage them to advocate for your business. It is why getting a free gift with purchase is so successful in increasing sales – and that free gift doesn’t even need to cost very much to have a big impact. Many brands have seen increased customer loyalty simply by adding a small pack of sweets to customer orders – and at such a minimal cost, it is little wonder that online retailers are using this strategy.

If your business has grown sufficiently and you’ve built the number of repeat customers that return to you regularly, then you can consider creating a loyalty programme that provides benefits when customers come back. We took a deep dive into customer loyalty programmes before, so head to this post if it is something you’re considering implementing in your business.

Trust

Having flawless language in your listings, enough products, clear checkout costs and secure payments are just the first step in building trust.

Social proof is essential to build if you’re going to encourage customers to buy from you. When you’re buying products online for yourself, you check reviews before you add to cart, don’t you? So do all your customers. There are several ways you can increase social proof – including:

  • Proof from other customers – these can take the form of reviews, testimonials and case studies, but can also include customer generated content from social media.
  • Proof from experts – getting validation from people who are experts in their field and that know what they are talking about can encourage customers to take action. It has worked for years for toothpaste companies – it is why they feature real dentists in their TV ads!
  • Celebrity endorsements – getting a product, or your brand endorsed by a celebrity or influencer is a powerful way to get the attention of customers.
  • Proof by numbers – you’ve sold 50,000 of an item with no returns or negative reviews? Shout about it!
  • Official certification – if there is an official body that you can have your products or business recognised by, such as the Soil Association for organic certification, then this can increase trust significantly.
  • Industry recognition – there are numerous ways that you can get your business recognised by people in the industry, from being mentioned on thought leadership websites to being shortlisted or winning awards. We’ve taken this approach ourselves – we’ve been shortlisted for 14 industry awards, and we’ve won four!

Showing authority is another way you can build trust with your customers. Many businesses use a content marketing approach for this, to demonstrate how much they know about their products, how they can be used and so on. That means creating blog, video, or podcast content to provide additional value and demonstrate your expertise in the field.

We’ve already mentioned how much value your story can have in encouraging customers to buy from you – especially if your story resonates with them. If they see that the people behind the brand are like them, this can increase trust. They know how they would act in your situation, and so they believe that you’ll act in a similar way.

The Takeaway

In retail, and even more so in eCommerce, competition is high, and is getting more crowded than ever, which means that you need to use every tactic possible to attract customers. Many of these tweaks are quick and easy to implement, with just the smallest increase in advantage – but by trying these tactics, and doing so strategically rather than all at once, you can identify what works for your customers, and help your business to scale.

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Dawn Matthews
Dawn has worked in technical and customer supporting roles for over 20 years. Most of her career was spent in technical services at top rated UK universities, which has given her a keen eye for detail. A lucky escape led her to the field of eCommerce in 2017, and she’s never looked back.Dawn studied in the field of social sciences with the Open University, achieving an MSc in Forensic Psychology at the same time as working two jobs. She regularly applies principles of psychology from her studies to her work, and outside of her role at Avasam she is busy writing her second book.Follow Dawn on LinkedIn at www.linkedin.com/in/dawn-matthews

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