Nudge strategies to look out for when shopping online
Richard Thaler and Cass Sunstein, the two behavioural economists credited with popularising nudge theory, define a nudge as:
Any aspect of the choice architecture that alters people's behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid.
Buying a pastry because the barista at Pret asked if you wanted one with your coffee, purchasing two cartons of juice instead of your usual one because they were on offer or realising you bought a more expensive jar of jam when you were in a rush because your usual one had been moved to the bottom shelf – all of these everyday choices and behaviours are products of nudge marketing. Humans prefer convenience over rationality and so nudging works by making our decisions feel more natural and automatic. It’s easy to see how high-street shops use these strategies to get us to spend more, but how does nudge marketing translate to online shopping?
According to the latest figures from the Office for National Statistics, the proportion of retail sales made online soared to 35.2% in January 2021, the highest on record. As more and more of us developed an online shopping habit in lockdown, e-commerce retailers seized the opportunity to encourage us to spend more and shop more frequently. Nudge marketing in the online sphere is designed to optimise the entire e-commerce customer journey. Marketers will often develop strategies with the following aims: speeding up the customer journey, personalising the customer experience on the site, recommending other products, and making it easy and painless to checkout. But what does this look like in practise and how can we as consumers be more aware of how we are being nudged into parting with our cash?
One way online retailers nudge us into buying an item is through labelling. For example, ASOS label lots of their own-brand items according to their fit, making it easier for consumers to find exactly what they’re looking for, whilst also assuring them that the product is tailored to their body shape.
Image credit: www.asos.com
Functionally, this type of labelling improves the browsing experience of the consumer, making it easier to find what they are looking for and therefore improving the chance of a sale. Furthermore, ASOS’ labels are also exposed to search engines so that customers looking for a specific fit are met with their products.
As well as being functional, labelling and branding can also trigger a psychological response from its target consumer demographic. For example, products in H&M’s ‘Conscious’ range, designed to appeal to the growing
swathes of ethically-minded consumers, are signposted on their website using green font. Because of its associations with nature, we subconsciously associate the colour green with environmental action, making the sustainably-minded consumer more likely to purchase. Having said that, consumers are becoming increasingly aware of ‘greenwashing’ – the practice by which large corporations deceive consumers by giving the false impression that their products are environmentally-friendly. A recent study concluded that those who consider themselves strong environmentalists were more likely to be sceptical of greenwashing, but low and moderate level environmentalists were more likely to fall for greenwashing tactics (Urbański & Adnan ul Haque, 2020).*
Image credit: www.hm.com
Another way online retailers nudge us to make a purchase is through app notifications. Companies will often incentivise downloads of their app by offering a discount code or reward. The value to online retailers of being able to ping notifications to your phone at any time of day is immense, with a constant bombardment of limited-time-only discounts difficult for any consumer to resist. It’s now statistically more likely that a customer will be interacting with e-commerce from a smartphone or tablet than a computer, making app notification nudges all the more profitable for retailers.
Image credit: Caitlin Reilly
Pop-ups and overlays on websites are also popular nudge techniques, encouraging customers to stay on the site by throwing in free shipping, or a discount code in exchange for signing up for their email list.
One of the most effective nudge marketing techniques is to display proof on the product page. As humans, we are socially conditioned to rely on the opinions of others, making the review feature one of the most valuable marketing tools (if the product is well-liked by consumers, that is). Amazon do a great job of this, displaying the star rating out of five, number of reviews and number of answered questions alongside the product name.
Image credit: www.amazon.co.uk
A large proportion of online sales are what we might call ‘impulse buys’. E-commerce retailers aim to facilitate our system 1 (impulsive) brain by removing all the stages in the purchase cycle that give us time to reconsider clicking the checkout button. Amazon’s ‘buy with one click’ feature (patented up until 2017) is estimated to be responsible for billions of dollars worth of profit for the e-commerce giant, proving highly successful in an industry in which roughly 70% of shoppers will abandon their carts before checking out. Creating a sense of urgency is often key to activating our impulsive brain and so a notification telling us there are ‘only 3 items left in stock!’ is highly effective at driving us to make a purchase. In fact, merchants selling on Amazon will often purposefully keep their inventory low, capitalising on the human tendency to equate an item’s scarcity with its desirability.
At each point of contact with the consumer, e-commerce retailers make use of a complex network of nudge strategies to convert our initial interest into a purchase. Whether that’s through subconscious messaging, as simple as using a particular coloured font, or through making the checkout process as quick as possible, e-commerce sites and apps are becoming more and more effective at getting us to part with our cash, even more so than physical shops. As the high-street shop becomes a relic of the past and retailers have access to consumers 24/7 via websites and apps, will an increased exposure to nudge techniques result in a more consumeristic society? One thing’s for certain: being aware of and actively resisting these nudge techniques the next time you’re shopping online could save you and your bank account from an impulse purchase.
* Mariusz Urbański and Adnan ul Haque, Are You Environmentally Conscious Enough to Differentiate between Greenwashed and Sustainable Items? A Global Consumers Perspective, 27 February 2020.