11 Sneaky Ways Online Retailers Get You to Spend More
Online retailers and travel sites may be virtual in presence, but their desire to make a sale is very real. And with increased competition, the psychology behind their marketing is getting more nuanced and complex. E-commerce tricks can end up costing consumers if they're not paying attention. Here are some sneaky (and fascinating) marketing tactics designed to get shoppers to spend more.
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It's common for online shoppers to rethink a purchase after adding items to a shopping cart. Online sellers view these so-called abandoned carts as potentially easy sales: Sometimes all they have to do to get the shopper to come back and complete the sale is send an email reminder. Behavioral marketing company SaleCycle reports that nearly half of abandoned cart emails are opened, about 13 percent are clicked, and about 35 percent of those clicks convert to sales. If you receive one of these emails, try to remember why you abandoned the cart in the first place. Hint: More than half the time, it's because unexpected fees were presented at checkout, according to Statista.
The way e-commerce businesses present products on the page is designed to maximize profit. In a 2005 study, Stanford researchers working with eBay compared how much customers might spend when presented with identical products in two different layouts. One layout featured three copies of the same CD -- the middle one with a starting bid of $1.99, the other two at 99 cents. In the second layout, the middle CD had the same opening bid of $1.99, but the other two had a starting price of $6.99. Customers spent more on the CDs flanked by more expensive copies every time. The strategy is called implicit comparison, and research suggests that consumers don't realize the seller is trying to influence them. When retailers explicitly invite consumers to compare prices, they are more cautious.
Many websites offer subscriptions to services or products in a choice of three tiers; for example, free, basic, and pro. Consumers can be fairly certain that the middle option is the one the company wants them to purchase. Companies design service options like this because of the principle of value attribution -- we tend to anchor our decision-making process on the free option, so the most expensive option seems unreasonable, but the middle presents the best compromise between cost and benefit. Preference for the middle option is also called the "center-stage effect." For instance, when presented with three doors to choose from, most choose the middle. Three lanes? Middle. Same thing with pricing -- most people assume the middle option is best choice.
Sometimes pricing that doesn't seem to make sense is, in fact, deliberate. For instance, a magazine might offer subscriptions at three prices: $50 for online, $75 for print, and $75 for print plus online. The middle option is obviously a mistake, right? Maybe not. When presented with these three options, most people choose the third because of its apparent value. However, when the middle option is removed, most people choose the first, cheapest option. Behavioral economist Dan Ariely talks about this phenomenon in a TED Talk and suggests it has to do with customers becoming "value seekers" versus "bargain hunters."
Which description is likely to increase a sense of urgency in a customer: "We have plenty of this product just sitting on our shelves" or "Only 1 left in stock!"? Granted, this isn't always a trick -- sometimes remaining inventory numbers might help shoppers get what they need before it sells out. But the "Only 1 left in stock!" tag may just create a false sense of urgency about a product the customer doesn't really need.
Amazon claims to be "customer-centric," but the e-tailer engages in some practices that steer customers away from the best price, according to a ProPublica investigation. This happens most often in Amazon's "buy box," which includes the "Add to Cart" button. Only one vendor is linked to each "Add to Cart" button -- even if other vendors are selling the same product at cheaper prices. Before hitting the button, shop around the site to see if another vendor is selling the same product for less.
Another way e-commerce sites create a sense of urgency in customers is by presenting "Limited time only" banners, often with counters. This method is commonly found on deal sites like Groupon, and it puts pressure on the customer to make a decision quickly, perhaps without taking the time to decide if the purchase is rational or not. Unless the product is in exceptional demand, the offer window may not be as limited as the site presents it to be.
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One way e-commerce sites lure customers into purchases is by making the prospect of receiving the product as tangible as possible. For instance, instead of just offering "expedited shipping," Amazon displays the message, "Want it tomorrow, [date]? Order within [hours/minutes] and choose One-Day Shipping at checkout." This is a subtle way of making the customer imagine seeing that Amazon box on their doorstep that specific day.
Probably the most ubiquitous e-commerce pricing tactic is to list the product's original price next to its current price, along with the savings percentage. It's not a new tactic, but it can create a false sense of value. For instance, while Amazon might list a computer graphics card as marked down to $100 from $200, a 50 percent savings, that same graphics card might be listed on another site as marked down to $80 from $100 -- a smaller discount but a far better price.
Many e-commerce websites offer promotions on shipping because of loss aversion, the idea that people are much more motivated to avoid a loss than to realize an equivalent gain. A consumer shopping at an online clothing store might reason that if shipping is free on a purchase of $60 or more, then it's worth buying a second $40 shirt. But the company has already covered its shipping costs, and the customer is spending twice as much as intended just to avoid a small fee.
Companies strategically place similar products next to each other on pages so that one product becomes more attractive. For instance, a clothing website might sell two similar shirts side by side, at $55 and $45. Even if the two shirts are comparable in quality, customers perceive the $55 shirt to be inherently superior because they assume "expensive" equals "quality," or at least that's the theory behind comparative pricing.
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