Converting online interactions into transactions is a challenge. Almost 70% of online shopping baskets are abandoned, according to the latest research (Baymard Institute 2017). The potential for lost revenue is huge and it’s playing on the minds of CMOs across the industry.
Keeping e-commerce on its stratospheric trajectory will require a well thought-out strategy based on understanding and shaping shopper behaviour.
Combining on-going academic research from Durham University, and Mintel’s recent insights into the state of online shopping, at KHWS we’ve compiled a report to examine the challenges of tracking consumer behaviour online and the solutions available to marketers.
Behavioural science has long been key to marketing strategies, but it relies on understanding the purchase journey; something that is increasingly difficult as we live our lives online. Consumers use a range of different devices to shop online and they also switch between them so the decision-making process is difficult to track.
Our report highlights that marketers continue to assume consumers are thinking in the same way when shopping in person as they do online. By delving into the heuristics–or ‘mental shortcuts’–that people use to choose products and services, marketers can inform their strategy and influence consumer choices.
Bringing Together Brand And Sales
Customers don’t distinguish between brand marketing and sales activations. Marketers must bridge this gap to maximise conversion. Identifying the key challenges, and then the most relevant sales triggers for individual brands, is the basis for our new behavioural science-based model, which allows us to deliver marketing activity we call Brand Commerce.
Essentially this is compelling shopper marketing that blends brand emotion with the right level of sales activation, rather than the traditional approach of keeping brand and sales marketing in distinct silos.
There is now a great range of cost-effective, technology-driven techniques that marketers can use to understand the purchase process. These include Functional Magnetic Resonance Imaging scanners to track emotional response to brand messages, and wearable tech that records in-store decision-making.
Mining the data, we identified nine sales triggers to form a framework for us to interrogate the challenges facing brands. From here a strategic platform to solve a brand’s marketing challenges can be devised. These challenges can range from the provision of too much choice for consumers, to tackling price-driven perceptions:
- Brand budgeting
- Less means more
- Instant gratification
- The value of ownership
- Better than average
- One key thing
- The obvious truth
- Choice reduction
- Social proof
So how do these triggers manifest in real brand scenarios? Here are a couple of examples:
The Value Of Ownership
Everything from music streaming services to healthy sweets is being marketed through free trials and there’s a reason why it’s such an effective tactic. It allows customers to take ‘ownership’ of a brand without initially paying for it.
Humans are creatures of habit, making it unlikely that they’ll give up what is perceived to be a benefit to them once it has become an established part of their everyday lives. With the right product and the right kind of trial, its removal from a customer’s life could leave them wanting more.
Spotify has led the charge of understanding “The Value of Ownership” to convert people from physical ownership of music to instant access. With more than 100 million active users, Spotify’s strategy of providing a 30-day free trial of its Premium paid tier seems to be working. Those who choose not to continue past the trial then revert to being only able to access a limited freemium model. This method causes deprivation by removing a new benefit. Spotify creates a tangible way for consumers to truly understand what they’re missing.
Without proper management and structure, the abundance of choice for consumers quickly becomes a hinderance to achieving a brand’s commercial objectives. Unfortunately, choice paralysis isn’t only suffered by new customers. Existing customers who have already made a decision can find themselves inundated by all the options available to them and start to question whether the choice they’ve made is the right one. A brand can circumvent this through active “Choice Reduction” to overcome choice paralysis.
IKEA has changed its website to address this. Until recently shoppers would be faced with more than 10 categories in the top navigation. It’s now adopted a far clearer taxonomy by streamlining all the content under just four categories: ‘Products’, ‘Rooms’, ‘Ideas’ and ‘This is IKEA’. Allowing users to find items not just through ‘Products’ but also through ‘Rooms’ forms a more natural categorisation of products. The ‘Ideas’ category gives marketers the chance to exercise creativity by bundling content while suggesting related products. A more navigable and organised website makes products more relatable to customers.
A New Solution
CMOs’ success in driving online revenue rests with their ability to close the gap between brand experience and sales experience. Consumer attention continues to flicker from one channel to the next. A new solution is needed, one that is based on the foundations of behavioural science. By harnessing technology and creativity to provide shoppers with a Brand Commerce experience, the shopping basket is destined to be filled.