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Online shopping is one of the greatest conveniences of the Internet age, but it can also be very dangerous for your bank account. Retailers and marketers are using cutting-edge behavioral psychology to get you to buy their products, whether you need them or not. Do you know how they’re targeting you?

The Psychology of Shopping

Maintaining the self-discipline to avoid impulsive buying online Buck The Trend: 5 Tips To Avoid Shopping Impulsively Online Buck The Trend: 5 Tips To Avoid Shopping Impulsively Online Are you an impulsive shopper? Do you throw away money on items you don’t really want or need? Here are some tips and tricks to help you regain control. Read More is hard. And it’s made even harder by online marketers who know how we think.

The fact is, we don’t actually think through our actions very well. We use cognitive shortcuts called heuristics — these help us save a lot of mental energy, but they can also result in some bad decisions.

heuristics-word-cloud

Let’s take a look at a few ways that retailers take advantage of heuristics and their weaknesses.

Pricing

One of my favorite examples of heuristics being used by an online retailer is in a popular story about Williams-Sonoma. After introducing a $275 bread maker, the manufacturer wasn’t getting the sales they were hoping for, at least in part because consumers were hesitant to pay that much money for a kitchen gadget.

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So what did they do? Lower the price? No — instead, they introduced another bread maker at a significantly higher price. Now, when people saw that they had the option of buying a $275 bread maker or a $400 one, it seemed much more reasonable to buy the less expensive one.

This is an example of the anchoring heuristic, which we use to choose among different options. In comparing alternates, we anchor our comparisons on a single value; usually the first one that we see. Now, instead of thinking “$275 is a lot!”, shoppers were thinking “$275 seems very reasonable next to $400.” Comparing prices can help save a lot of money, but don’t get tricked by comparisons that aren’t relevant.

park-inn-hot-deals


A similar idea is that of scarcity
— when there’s less of something, or it’s harder to get, people want it more. When applied to pricing, you get the familiar “Only 3 Days Left to Save 50%!” headlines that you see all the time.

We fall for these on a regular basis, even though we know that the sale will be coming up again soon, because it’s hard-wired into our brains that we should take advantage of good deals while they’re available, just in case they don’t come around again (there are some arguments that this stems from early humans’ need to stock up on food while it was available so that they’d be able to make it through the winter).

Loss Aversion

People have repeatedly been shown to be more motivated by avoiding a loss than by the prospect of a similar gain. Many online retailers (and a lot of software-as-a-service providers) are starting to take advantage of this fact.

A great example of a retailer that uses this tactic is Warby Parker, a really successful online glasses frame retailer. Sure, they could have just created a web app that lets you preview what a set of frames would look like on your face. But what do they do instead? They send you five frames to try on, for free.

warby-parker-free

You have the product in your hands, and all of the sudden, you’re faced with a decision: send the frames back and be empty-handed? Or place an order and get one of those frames to keep? (In case you’re wondering, I chose the second option. And I will likely choose it again.)

Think about Amazon Prime, a service that we’ve profiled before Is Amazon Prime A Good Deal? Is Amazon Prime A Good Deal? Amazon’s Prime membership has been around for several years now and has, over the years, gained some notable upgrades. Once no more than a free shipping offer, Prime is now a streaming media service on... Read More . You get a free trial period in which you get to use all of the premium features without paying a dime. But after a month, you’re faced with that same decision. Give up those features and just use the standard version of Amazon, or pay to keep the premium features that you already have?

In many of these situations, you’re not even really losing something – you’ve just been made to feel like you are. This is a really difficult one to get around, as it’s deeply seated in our collective psyche. We hate losing.

Reciprocity and Commitment

These are two concepts that often go together, and can be difficult to disentangle. The idea of reciprocity when talking about purchase decisions is often stated in terms of a giving-and-getting sort of relationship. If you’re given something by someone, you often feel obligated, even if sub-consciously, to give them something in return.

One place where you’ll see this in physical stores is with free samples — after you’ve been given the sample, you’re much more likely to buy the product.

free-stuff

Online, this happens when you sign up for a free newsletter or a recommendation service; you’re receiving content for free, and you may feel like you should give something in return to the provider of that content. This could be the driving factor behind freemium models, as well (I know that this is one of the things behind my willingness to pay for apps like Evernote).

After you’ve given up your e-mail address in exchange for a newsletter, a free PDF guide, or some other sort of freebie, commitment comes into play. You’re now invested in a site; you’ve interacted with it, given it a piece of information about yourself, and have received something in turn.

People want to be consistent. Once we take an action toward a goal, we tend to try to continue toward that goal, even if we decide we no longer want to reach it. If you’ve ever thought “well, I’m halfway through, I might as well finish now,” you know exactly what I’m talking about.

So we stick with it. Even if we haven’t made any sort of contractual or even intentional commitment, we’ll willingly pay for something just to be consistent.

Social Proof

When you search for a product online, what’s one of the first things you see besides a picture and a price? The average rating that the product has been given by previous buyers.

Humans are very social creatures, and we put a lot of weight on what other people think, especially when we’re making decisions. Research has shown that a surprisingly large proportion of people will take to social media to do research before making a purchase decision.

testimonials
This is also why you’ll see testimonials on websites. If you see two different web-design company sites that are equally impressive, but one of them includes testimonials like “This company built me a fantastic website in less than a week” and “I would recommend this company to anybody,” you’re more likely to choose the second one.

In many cases, this is a great tactic for making better decisions, but it can be easily co-opted by online marketers. Who’s to say that the testimonials on websites are real? Do you have any proof that someone actually said that? Or that they weren’t compensated for their positive comments? How do you know that there aren’t twice as many negative comments that have been erased? You can learn to spot fake reviews The Scourge Of The Web: Fake Reviews & How To Spot Them The Scourge Of The Web: Fake Reviews & How To Spot Them "User reviews" are actually a pretty recent phenomenon. Before the prevalence of the Internet, user reviews were called testimonials, and you’d only see them on TV commercials and product pages. Nowadays, anyone can write anything... Read More , but it can be tough.

Be Vigilant When Shopping Online

As you can see, the Internet is fraught with behavioral psychological tactics to get you to buy things. How can you protect yourself from being manipulated by retailers and marketers?

The most important thing you can do is to remember the principles outlined above — you’ll make better decisions if you keep in mind that you’re always being marketed to, and that you’re rarely, if ever, just given something for free out of the goodness of a retailer’s heart.

Pay really close attention to pricing, too. If something seems like a really good deal, ask yourself why it seems like such a good deal. Is it because it’s a good price for the product? Or is it because it looks like a better deal than a different product? Do you really need it? Or do you just want to take advantage of the fact that it’s 70% off for a limited time?

pondering

Finally, think very carefully about the purchases you make online. There are a lot of great online shopping deals A Guide To Good Deals: How To Save Money On Everything You Buy Online A Guide To Good Deals: How To Save Money On Everything You Buy Online Online shopping makes it easier than ever to get a good deal. We've put together a short guide on how to get the best price on just about anything you might be looking for online.... Read More out there, but you might not always be getting exactly what you think you are. You can ask yourself some questions:

What are you paying for? Are you buying a product at a reasonable price? Or are you paying for “free” content that comes with it? Are you paying for something just because you don’t want to feel like you’re losing it, even if you never actually owned it? Are you just trying to fit in with all of the other people who have that product and have talked about it on social media?

Do you find yourself getting caught by these marketing tactics? What do you do to make sure you’re making good online shopping decisions? Share your thoughts below!

Image Credits: Ed Menendez via Flickr.

  1. rowena nakamura
    September 22, 2016 at 8:45 am

    Timely commentary - I was enlightened by the details - Does anyone know if my business would be able to get access to a blank Ol214 form version to complete ?

  2. Bob Myers
    July 11, 2014 at 11:33 pm

    Except for the fact they hurt people, I'd say let them continue.

    The provide entertainment for the alert and an opportunity to tweak the purveyors by email.

    I got the same company twice today for a couple of things that could physically or legally hurt the purchasers/users.

    • Dann A
      July 12, 2014 at 11:08 am

      While I don't align myself with the elitist vibe of "entertainment for the alert" (especially after the above discussion about how these heuristics are deeply entrenched in all everyone's cognition), I will agree that these strategies can be used for nefarious purposes. Most of the time, people just use them in an attempt to get customers to buy more stuff, which is bad enough—but they can easily be used to encourage people to do unethical or illegal things, too. That's a good point!

  3. Ravi M
    July 11, 2014 at 6:19 pm

    one more thing, sometimes you buy things which are completely useless to you, we just buy because price is very low :D

    • Dann A
      July 12, 2014 at 11:09 am

      Yes, that's a huge factor in a lot of people's purchase decisions. I even sometimes find myself thinking "well, I don't need that now, but I probably will soon!" . . . even though there's a good chance that I won't. That's one of the simplest tactics that retailers use, but it's still quite effective!

  4. Vikki
    July 10, 2014 at 6:51 am

    I'm just staggered that people are really that stupid and easily taken in.

    • Vikki
      July 10, 2014 at 6:54 am

      Meant to say too that I really enjoyed the article. Thanks for putting it out there.

    • Dann A
      July 10, 2014 at 7:34 am

      Glad you enjoyed the article!

      It can seem like people are just "taken in" by some of these strategies, and a lot of them are pretty transparent. However, the psychology of marketing has received a lot of study, and marketers are getting really good at making their tactics hard to see. Plus, being vigilant takes mental energy, and doing it all the time can be exhausting. You might think you're immune to this kind of thing, but I'd say that's quite unlikely! It really is based on underlying cognitive strategies that all people (at least all Western, education, industrialized, relatively wealthy people) share.

    • Vikki
      July 10, 2014 at 7:42 am

      I get that completely. Some of the strategies would take in most people but honestly, some of them are so transparent. Those are the ones I mean. Looking over my post, I see that it probably came across that I'm some kind of superwoman who is above all that, but let me assure you, I'm far from it :-)

  5. dragonmouth
    July 9, 2014 at 11:24 pm

    The last couple of generations were raised on instant gratification. Their parents were made to feel guilty by psychologists and other " experts" for not being there for their offspring 24/7/365. The parents compensated by giving the little darlings anything and everything the little snots wanted. Now the snots all grown up with kids of their own and their attitude is "I WANT it and I want it NOW!!!" Nobody dares to say "NO!" to the brats because that would "bruise their little, fragile egos and ruin their self-esteem."

    • Dann A
      July 10, 2014 at 5:54 am

      It's definitely possible that instant gratification and short attention spans have a lot to do with our susceptibility to these online marketing tactics—and if that's true, it's obvious why it's difficult to be resilient to them! A lot of these tactics are just built on how humans think, too, making them especially effective. We've evolved to use these heuristics over a long period of time, so they're very deeply rooted in our way of thinking.

  6. Adrian
    July 9, 2014 at 10:23 pm

    Great article. Thank you.

    • Dann A
      July 10, 2014 at 5:50 am

      Glad you liked it, Adrian! Thanks for reading.

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