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The psychology of online retail and the importance of customer experience

Posted by Joseph O'Halloran

eccommerce-concept-buyer-behaviour-online.jpgOnline shopping. When first introduced it threatened to spell the death knell for high streets, traditional retailers and service providers. It seemed to herald a bright new dawn where one could sit in the comfort of a home or office and buy goods or services without the perceived hardship of travelling, traipsing from store to store dragging bags behind you before finally facing the long journey home through the annoying traffic. AND (logically presumed in the dark recesses of our minds) HUGE SAVINGS!

The latter unspoken assumption never saw the light of day and there is no reference to it to be found in any analysis of the psychology of online shopping. There may be good reason for this, but in attempting to better understand what, if any, the emotions and motivators that differentiate online shopping from traditional shopping is, it is worth bearing in mind.

There is a myriad of statistical data available to help us know what people react to when shopping online, and how, and this shall be discussed in later blogs. However, it’s best to remember that data is only as good as its interpretation and analysis.

There are, after all, two opposing views on statistics:

‘There are lies, damned lies and statistics.’  - or - ‘Statistics never lie.’

So, is there really a different human experience between online and traditional shopping? If so, why, what is it, and how can your business make sure to optimise your website with killer content that makes for a positive customer experience?

Unfortunately, the answer may not be the same for everyone, and therefore there is no general answer that will satisfy all businesses who wish to enhance their online presence and increase sales. There are, however, general universal lessons to be learned that apply to the psychology of selling, regardless of the vehicle used or method preferred, and this is why it is important to understand that it is the experience of the shopper, traditional or online, that will be the final arbiter when it comes to the decision to buy or not to buy.

Traditional Vs Online Shopping: How Experience Influences Purchasing Decisions

Let’s begin with some basic differences between the traditional shopper and the online shopper. The profile of the customer, the goods or services being sought and budgetary limits are all determining factors. So what are the differences that affect the experience?

Well, if I’m a traditional shopper who goes to the best stores and cost is not a problem, then it is quite likely that I will have a very nice experience and be treated with a certain deference and respect which I might also enjoy. In fact, I may actually enjoy the shopping experience regardless of the actual purchase itself. It may be difficult to emulate that experience online by citing ‘more convenient’, ‘bigger choice’, ‘from the comfort of your home’, but the positive experience is still essential.

If, on the other hand, I shop for something I need on a limited budget and am further burdened by the time and expense of travelling to the stores, then the online experience would be preferable and probably offer some enjoyment, but for different reasons.

These are two very simplistic examples and at either end of a large spectrum, but they help to crystallise the general point. Given a choice, each person’s preference would be more dictated by their experience than any other factor.

In a general sense, traditional shopping is a social intercourse, often including friends and family. It allows for the full expression of one’s place in the social fabric, whether wanted or not. There is a human investment that requires more than the mere purchase of goods to satisfy and where other human interaction is a major determining factor as to the quality and enjoyment or not of the shopping experience. In fact, going ‘window shopping’ was once considered an enjoyable pastime, and maybe still is.

online-consumer-behaviour.gifOnline shopping, on the other hand, is a more solitary, less personal experience, with different behaviour involved. There is no street to walk down, or windows to gaze through, and it is not a shared experience. Browsing the internet is a misnomer in the real sense of browsing as it requires a deliberate action and a specific subject matter. It is more akin to searching or unconscious researching and I doubt any of us decides to spend an hour or two just strolling around the internet just to pass the time without any input into the subject matter. In fact, we can’t, even if we wanted to.

Herein lies a psychological difference between the relationship a traditional shopper has with their shopping experience and that of an online shopper. Though rapidly being overtaken, traditional shopping is a warmer, cosier feeling because, among other things, I feel more in control and can share my emotions. I might walk past a store, have a glance as I walk by or stop and have a look. I might decide to go inside and browse around out of mere curiosity, or so I believe.

All my decisions are at a subconscious level, subliminal even, and therefore pose no threat. The only decision I have to make is whether to buy or not and there is a very helpful person to relieve me of my hard earned cash. I am not required, as many online outlets would have it, to keep justifying my actions by having to confirm those actions.

With online retail, we are faced with many questions that require consideration: Do I want to walk past this window? Do I just want to glance? Do I want to stop and look? Do I want to go in? All these decisions before the big one. Do I want to buy? Then more decisions, actions, information to absorb and time to reconsider. And nothing to distract me. No friend to chat idly to, no friendly staff member to discuss the weather with and remind me that I am a customer by giving me their sole attention.

But all the time this online store needs to be working to bring me in, entice me with valuable information that will make me interested in the product or service on offer. In short, they need to convert me from a passerby into a potential customer: they need to generate a lead.

online-consumer-behaviour-pyschology.gifThere is a 64.7% abandonment rate of online customers during the actual buying process, while 41% cancel a transaction when faced with the dreaded ‘hidden charges at the checkout’ scenario that any good website should avoid. There are many other reasons for transaction abandonment, which we will go into in the next blog, but there is one important one not mentioned: A lot of online shopping does not reward the emotional investment the way traditional shopping does because it does not have the human interaction involved. Therefore the commitment to the purchase is vastly decreased and there is no sense of obligation to that commitment.

That is, unless you have an effective lead generation strategy that gives a positive user experience, makes the customer feel part of something, and brings them through the customer journey. It involves attracting people to your product or services, rather than pushing your product or service at them.

How do successful businesses do that? By creating great content that attracts people, converts them into leads, then offers the value that entices them to become customers. This is inbound marketing in a nutshell. It involves providing useful, relevant information at every stage of the buyer journey, from first visit to click-throughs, to downloading offers to pain-free purchasing and even beyond, to after-sales customer care. This isn't easy, which is why many businesses fail online, but it can be done with an effective digital marketing strategy.

Online shopping will continue to expand. It is the way of the world. It is already accepted as an integral part of all businesses and an industry in its own right. Like all new innovations to the marketplace, it has defied original misconceptions of its effect and prophecies of its influence. But it has changed the horizon and altered the landscape.

The 6 Rules of Retail and How They Relate to Online Businesses

Professor of psychology and marketing Robert Cialdini, in his work Influence, outlines six ways you can get people to say yes to what you are asking, and anyone who sells things for a living, whether offline or online, should know, love and live by these principles. In our line of business, however, we look at how they relate to online:

  • Reciprocity – the ‘give and get’ principle of offering value in return for a customer’s interest
  • Commitment & Consistency – getting people ‘in the door’ and providing a seamless experience
  • Liking – establishing a relationship and getting others to promote you (thank you social media!)
  • Authority – being the established expert and leader in your field, which may include input from other experts and influencers
  • Social Proof – as social creatures, we like what others like (thanks again, social media!)
  • Scarcity – suggesting that a product or service won’t be around for long so it’s best to buy now compels people to make a purchase

This is just an at a glance overview, so in our next blog we shall analyse the data and statistics in broader terms and show how, although the general principles will never change, we need a better understanding of how they apply in online marketing and how best to evoke the emotional response necessary to creating a successful online marketing strategy.      

Learn how you can generate leads for your online business with an effective digital marketing strategy by downloading our free guide, so you can make sure to give your potential customers a positive experience while increasing your profits.

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Joseph O'Halloran

Joseph O'Halloran

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