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, with more and more retailers investing in e-commerce websites and digital marketing strategies. However, 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 and how retailers can use this knowledge to improve their e-commerce websites and attract more customers.
Table of Contents
Understanding the Psychology Behind Online Shopping
To understand the psychology behind online shopping, we need to look at the reasons why people shop online. One of the main reasons is convenience. Online shopping allows consumers to browse and purchase products from the comfort of 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.
Another reason why people shop online is the ability to compare products and prices. With so many e-commerce websites available, 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 and 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.
Creating Convenience for Your E-Commerce Customers
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 purchase 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.
When it comes to designing your e-commerce website, you need to optimize for mobile 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.
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 purchase. Consider having a test group provide feedback on your e-commerce website before a hard launch. This will ensure that your customers have the best online user experience with your store.
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. Find out more!
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.
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 and 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.
The design and layout of the website can influence how consumers perceive the brand and affect their decision to make a purchase. 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.
Another way e-commerce websites influence consumer behavior is through the use of product recommendations. By analyzing consumer behavior and purchase 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 purchase to come back and purchase the product they were looking at previously. 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.
Incentivizing them by offering a discount for a product they abandoned in their cart could also be a strong motivator. Make sure to offer discounts or point rewards as they make purchases as well.
The Role of Influencers in E-Commerce
Influencers play an important role in e-commerce. Many e-commerce retailers partner with influencers 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 purchase. 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 who make videos on their area of expertise in hairstyling. Their audiences are already interested in that content, and types of products, and trust the experience and knowledge of that influencer.
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.
The Impact of Social Proof on 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 purchase 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. However, it’s important to note that negative reviews can have the opposite effect and discourage potential customers from making a purchase.
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 now that Google has implemented a product review update to their algorithm. Having verified purchased reviews on your website and Google My Business page are key to success in visibility for e-commerce businesses.
The Use of Scarcity and Urgency in E-Commerce
Scarcity and urgency are tactics used by e-commerce retailers to create a sense of urgency and encourage consumers to make a purchase. 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 purchase before the product is no longer available. This can be especially effective for products that are in high demand or have a limited supply.
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 purchase 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 that they are most likely to see 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 can have a significant impact on consumer behavior in e-commerce. 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.
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.
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. 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. 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 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.
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.
Conclusion: 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 behind 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 and urgency, pricing strategies, and 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.