E-commerce has revolutionized the way people shop. Thanks to the internet and digital devices, consumers can now shop online anytime and anywhere they want. E-commerce’s convenience has made it a popular choice for consumers who prefer online shopping to physical stores.
Online shopping has become a multi-billion-dollar industry. In the last couple of years, more and more retailers are investing in e-commerce websites and digital marketing strategies. But, the success of e-commerce relies heavily on understanding the psychology of consumers and how they behave when shopping online.
In this article, we will explore the key factors that influence consumer behavior in e-commerce. Also, how retailers can use this knowledge to improve their e-commerce websites and attract more customers.
Table of Contents
What is the psychology behind online shopping?
To understand the psychology behind online shopping, we need to look at the reasons why people shop online.
Customers like convenience
Online shopping allows consumers to browse and buy products from their own homes without having to travel to a physical store. This convenience especially appeals to busy consumers who don’t have the time to visit a physical store.
Buyers like to compare products and prices
There are a bunch of e-commerce websites available. That means consumers can easily compare products and prices from different retailers to find the best deal.
This ability to compare prices and products has made consumers more price-sensitive. Also, it has led to increased competition among retailers. This means you should be aware of your competitor’s pricing. And also try to cut costs where you can to drive more sales for your brand.
How to create an easy-to-use E-commerce website?
As an e-commerce business, you need to create the most extraordinary experience of convenience for your prospective customers. This will ensure that leads follow through with making a sale and keep them coming back time and time again. You must analyze every aspect of your selling process from the website design, ordering process, and supply chain.
Offer cross-device compatibility
When it comes to designing your e-commerce website, you need to optimize for mobile. Why? Since the majority of online shoppers use their phones to make a purchase. It doesn’t matter how great your website is on the desktop if there is a terrible user experience on mobile.
Simplify your website navigation
Your site must be easy to navigate with buttons that are easy to click on a mobile device. Reduce the number of steps it takes from putting an item in their cart to making a sale. Consider having a test group provide feedback on your e-commerce website before a hard launch.
Useful advice
Behavioral analytics tools can help you identify issues that may be affecting your website. With Capturly’s heatmaps and session recording features, you can pinpoint exactly where visitors are encountering problems that could harm their shopping experience on your e-commerce site.
Improve your supply chain process
The other aspect e-commerce businesses need to consider when it comes to convenience for the customers is their supply chain process. This would involve taking a look at every aspect of your business. From the production of the product to the shipping and delivery of the item to the customer.
Specialty items can take time to create. If this applies to your business, you need to be upfront about your shipping estimated arrival times to the customer before they place a purchase. If you are able to use a manufacturer for your products choose the best in terms of costs, quality, and production time. The faster the production time the faster you can get your product into the customer’s hands.
Ensure fast and high quality shipping
Finally, there is the shipping aspect. If your product takes a long time to ship some customers may become antsy that their product was lost during shipment. That is why it is important to partner with a shipping company that:
- Prides itself on delivering to the customer quickly
- Has a good reputation for not losing packages
If the shipping company has a tracking system, like most do these days, that is another convenience that will put your customer’s minds at ease as they await their orders.
How E-commerce websites influence consumer behavior?
E-commerce websites have a significant impact on consumer behavior. In this chapter, we will look at how the psychology of online shopping works, when the customer faces E-commerce websites. We will also sort out those parts of the website that can lead to influencing customers.
The website design has an influential effect
The design and layout of the website can influence how consumers perceive the brand and affect their decision to make a sale. For example, a website that is easy to navigate and has a clear layout can make it easier for consumers to find what they’re looking for and increase the chances of a sale.
But here is another story! The case of the first impressions. Since people not only decide between options quite fast in an offline atmosphere! This psychological factor is with us in the online world. A study shows that it takes 50 milliseconds to form some comments about a site. These are not rational opinions, as this time interval is not enough to decide how good the site is. These are simple senses.
- Does the landing page create a friendly atmosphere?
- Does the color fit with the “feeling” we sell?
- Does the loading time affect our user experience negatively?
These senses are all added to our first-impression, which become negative, or positive based on these factors.
Product recommendations increase your sales
Another way e-commerce websites influence consumer behavior is through the use of product recommendations. By analyzing consumer behavior and buying history, e-commerce websites can recommend products that are likely to be of interest to the consumer. This can increase the chances of a sale and improve the overall shopping experience for the consumer.
You can have these product recommendations recommended to the consumer through email newsletters if they have signed up for them. Having an abandoned cart email can motivate customers who failed to complete a sale. They may come back and buy the product they were looking at before to the effect of that. Sometimes consumers do not have the funds at the time they are window shopping. When they are reminded later on about the product, they may follow through with the purchase now that they have the money for it.
Make sure to offer discounts or point rewards as they make sales as well.
How do influencers affect online shopping habits?
Influencers play an important role in e-commerce. Many e-commerce retailers partner with influencers! Why? To promote their products and reach a wider audience.
Influencers can help to build brand awareness and increase the credibility of a brand. By promoting products to their followers, influencers can create a sense of trust and encourage consumers to make a sale. This can be especially effective for new brands that are trying to establish themselves in the market.
Many consumers have a strong opinion and trust when it comes to influencers. There is a parasocial relationship that is formed where they see the influencer as a like-minded individual or expert in a given field. Make sure that if you implement influencer marketing into your e-commerce strategy you choose influencers based on relevancy to your brand.
Just as you would target a specific audience with other kinds of marketing, this should apply to influencer marketing as well. For example, if you own a hair care brand, you should contract with hairstylist influencers. Those who make videos on their area of expertise in hairstyling. Their audiences are already interested in that content, and types of products. They need to trust the experience and knowledge of that influencer, as well. That’s one part of the psychology of online shopping! Learn, the more similar the chosen influencer from your potential buyer is (based on internal, or external parts), the more likely your customers will resonate with the influencer.
The use of AI in picking the right tone
From the launch of ChatGPT, there’s no week about newer and newer AI tools that help in one specific segment of life. One of 2024’s biggest trends is AI can also help you to pick the right person for your marketing campaign. This year, many of the biggest e-commerce brands started to use artificial intelligence to help them choose the best influencers for advertising a specific product. Humans may find it hard to choose the best option from infinitive long raw data, but that’s not the case with AI.
Also, because of the continuous development of AI technologies, virtual influencers have come into the picture. Even if it may seem a strange idea, research shows its success: a product that was advertised by an AI influencer got approximately 78% positive comments. On the other hand, a human influencer got 75% for the same post.
Video marketing with influencers
In 2023, video marketing is growing and is more important than ever. Going after influencers to post video content featuring your brand is going to be the most effective way to go about influencer marketing compared to social media image endorsements.
Influencers can also involve live shoppers. Live shopping can sometimes lead to a more authentic experience for consumers. Unlike traditional influencer marketing, live shoppers showcase themselves using products on a live stream format where the audience can interact with the live streamer. This allows them to see the influencer’s experience with the product in real time and allows them to ask questions about it.
How to use social proof in E-commerce?
Social proof is a powerful tool in e-commerce. Social proof refers to the idea that people are more likely to make a sale if they see that others have done so before them. One way to use social proof in e-commerce is by displaying customer reviews on the website.
Customer reviews can help to build trust and credibility for the brand. By displaying positive reviews from satisfied customers, e-commerce retailers can encourage others to make a purchase. But it’s important to note that negative reviews can have the opposite effect and discourage potential customers from making a sale.
If you receive negative reviews, you should respond in a helpful manner to make things right for the customer. If you provide great customer service, other potential customers will see this and have a positive view of your company. Everyone understands that issues can occur, and how you respond to them will make a big impact on the perspective of the customer. Your response can make or break whether they decide to do business with you.
Customer reviews are so important today for e-commerce, especially from February of 2023. That day, Google implemented a product review update to their algorithm. Having verified purchase reviews on your website and Google My Business page is key to success in visibility for e-commerce businesses.
Why use scarcity and urgency on your website?
Scarcity and urgency are tactics used by e-commerce retailers to create a sense of urgency. They can also encourage consumers to make a sale. Scarcity refers to the idea that a product is in limited supply, while urgency refers to the idea that a product is only available for a limited time.
By using scarcity and urgency, e-commerce retailers can create a sense of urgency and encourage consumers to make a sale before the product is no longer available. This can be especially effective for products that are in high demand or have a limited supply.
How to implement them?
To implement scarcity and urgency in your marketing strategy, create products that will only be produced for a limited run. This will make customers jump to make a sale when they know that it will never be produced again.
Encourage customers to sign up for SMS marketing, through a contest giveaway. By having your customers subscribed to text messages, you can create urgent promotions. They are most likely to see that within the time frame of the promotion.
For example, if you run a promotion like, “Get any of our shirts for 40% off in the next hour”. If you sent this message through email, it is not likely many people will jump at the promotion since email is infrequently looked at. Since everyone is always on their phone, they are more likely to receive and act on promotions using urgency tactics.
Having a countdown timer for promotions will also create a sense of urgency for the customer. Amazon does this with free Prime shipping. “If you order within the next 3 hours, your product will be shipped to you tomorrow.”
How Pricing Strategies Affect Consumer Behavior
Pricing strategies usually have a whole chapter in economic psychology books! If we only think of the psychology of online shopping, we can still analyze ways in which companies can influence customers.
Offer a discount or run a promotion
For example, offering a discount or running a promotion can encourage consumers to make a purchase. On the other hand, pricing a product too high can discourage consumers from making a purchase.
Try dynamic pricing
Another pricing strategy that e-commerce retailers use is dynamic pricing. Dynamic pricing refers to the practice of adjusting prices based on supply and demand. E-commerce websites can use data analytics to monitor consumer behavior and adjust prices accordingly. This can be an effective way to increase profits and encourage consumers to make a purchase.
Avoid underpricing your products
Make sure to never price your products too low. This will make it difficult to create promotions if you are doing so at a loss. After a regular price is set it is hard to raise that price since consumers already have an expectation of what your product is worth.
Pricing your product a bit higher than what you want to make for profit and then creating a “sale” will help to drive more business while making the amount you want for the item. It doesn’t matter if they are actually getting the product as a true “sale value”, just that the consumer believes that it is on sale.
If you have a high-quality or scarce product you can get away with charging more, but it is important to understand what customers are willing to pay for it. If you make products by hand, pricing your product too low can lead to an overwhelming amount of sales you may not be able to fulfill. In those cases, you can price higher for fewer orders.
The Importance of User Experience in E-Commerce Websites
User experience is an essential factor in e-commerce websites. But not just because of technical reasons. If we think of the psychology of online shopping, a bad user experience may lead to worse conversion rates, and after all: less profits.A website that is difficult to use or navigate can frustrate consumers and lead to lost sales. On the other hand, a website that is easy to use and has a clear layout can improve the overall shopping experience and increase the chances of a sale.
One way to improve the user experience is by optimizing the website for voice searches and mobile devices. With more and more consumers using their smartphones to shop online, it’s essential that e-commerce websites are mobile-friendly and easy to use on a smaller screen.
In 2023 voice search is growing rapidly. Many consumers use their Google Assistant or Siri to search the internet for products for them. Optimizing your website for voice search will ensure that your website will be found by these voice assistant services.
Did you know?
More than 1 billion voice searches take place every month.
The Importance of Customer Service with E-Commerce Brands
People say that it is harder to get a new customer than it is to get an old customer to come back from time to time again. It is certified by many new studies. Building brand loyalty is the key to staying successful as an e-commerce business long term. But how do you get customers to do this? Like everything it all comes down to understanding the psychology of the consumer. It is one crucial part of the psychology of online shopping, when fostering a relationship with the brand. By making every interaction feel personalized, the customer will develop trust and a strong sense of loyalty to your company.
What is a customer service exactly?
Customer service can be how you respond to issues that consumers have with your product or shipping process. It also refers to:
- How we acknowledge the visitors’ needs
- How we help them to get an answer
Having a social issue that your company stands behind and charitably contributes to is one way to build a strong perception of your brand that aligns with the values of your customers. Most important of all though when it comes to the perception of the brand on the customer is how to handle your customer service. Customer service can be how you respond to issues that consumers have with your product or shipping process. Having a written standard on how to handle common customer issues will help your customer service team to adequately respond.
Make the process for returns as easy as possible. If your return process is complicated, the customer may not want to do business with you again and will go to a competitor that makes this easier. Offer a replacement at no extra shipping cost or another incentive with a quick charge back to the customer’s account. The easier you make things for the customer the more satisfied they will be with your company.
What is the future of E-commerce and consumer behavior?
The future of e-commerce and consumer behavior is closely linked to technological advancements and changing consumer preferences. As more consumers shop online, retailers will need to continue to adapt and innovate to meet their needs.
Understanding the psychology of online shopping and the factors that influence consumer behavior is essential for e-commerce retailers. By using this knowledge to improve their e-commerce websites and marketing strategies, retailers can attract more customers and increase sales. The use of:
- Influencers
- User experience
- Social proof
- Scarcity
- Urgency
- Pricing strategies
- Customer reviews
are all essential tools that e-commerce retailers can use to improve their online presence and succeed in the competitive e-commerce landscape.
