How To Successfully Leverage Cognitive Biases To Influence Consumer Purchase Decisions.
How do consumers make purchase decisions? Why do they buy one product over another? One might think that this type of decision is the result of a purely rational thought process — but numerous studies in cognitive psychology have highlighted the existence of cognitive biases that can significantly influence consumers' purchasing decisions. Ultimately, buying decisions are at least partly emotional.
In e-commerce in particular, studies show that purchasing decisions are triggered by the following biases: authority, categorical heuristics, scarcity, power of gratuity and social proof.
Since the birth of e-commerce in the '90s, marketers have consistently developed and experimented with many techniques to trigger these biases. They are constantly looking for new and more effective tools.
Live Commerce (also called Live Shopping) is undoubtedly one of the most promising. In addition to humanizing the customer relationship in e-commerce, it represents a powerful sales tool. In particular, it gives marketers of major brands and retailers direct opportunities to activate the cognitive biases that make people buy products.
First, let’s discuss the five biases mentioned above
Bias 1 - Authority
Authority bias describes the tendency to modify one's buying behavior to match that of informed experts on a specific topic.
Several models of Live Commerce exist, including Live Commerce shows, virtual masterclasses, and one-to-one Live Commerce.
Live Commerce (also called Live Shopping) events are presented by salesmen or by famous influencers, who engage with the audience and explain the functioning and different uses of the products they present — and it directly solicits authority bias by encouraging viewers to modify their buying behavior to match that of the expert giving the presentation.
Bias 2 - Category Heuristics
Category heuristics are most easily defined as brief descriptions or specifications that provide key information about a product to help consumers’ decision making.
It's no secret that giving customers access to as much information as possible improves their experience — and therefore, sales.
Any experienced online shopper knows that one of the greatest weaknesses of e-commerce is the lack of information available. While in physical stores consumers can study a product from all angles, try on clothing and accessories, and ask questions, during online shopping, they typically only have access to a few photos of the product, a brief description, and occasionally, customer reviews on the website, making shopping a guessing game.
However, with Live Commerce, whatever the model used (Live Commerce shows, virtual masterclasses, and one-to-one Live Commerce shows, virtual masterclasses or remote shopping), the customer can have a 360° view of a product, see it in action and ask questions to the presenter/seller.
The advantages don’t stop there. Once a Live Commerce show or virtual masterclass is broadcast, brands and retailers can integrate replays into their e-commerce website's product pages.
Bias 3 - Scarcity
Scarcity bias can take 3 different forms:
A time limit: “Only 2 hours left to take advantage of this discount!" Simply put, customers feel pressured to buy to get the product at a discount.
A quantity limit: A statement like " 2 products in stock," inflates the product’s value proposition. As the availability of a product decreases, it becomes more desirable.
An access limit: The statement "product available only to subscribers," is a highly effective way to create a sense of exclusivity (ECN).
A technique for increasing sales widely used in the context of Live Commerce and Virtual Masterclasses solicits scarcity by offering viewers exclusive promotions on the products presented, for an ideal period of 48 hours maximum.
For example, during the Sage Appliances X Darty Pizza Masterclass, using Shoply’s solution, Sage offered a promotion code of 25% on the Pizza Smart Oven (regular price €799.99).
Click here to discover a Live Shopping event made by Sage Appliances and Darty with Shoply.tv, Live Shopping solution for brands and retailers.
Bias 4 - Power of gratuity
Gratuity is a concept of preferring a product if something is given for free. Free items are a highly persuasive tool (ECN). Brands and retailers running Live Commerce events may prefer to give viewers free shipping, samples, etc. rather than exclusive access to promotional codes.
Bias 5 - Social Proof
Social proof is probably the most powerful bias for brands to solicit. The social proof bias describes the tendency to mimic the buying behavior of others when evidence is presented (ECN).
Here, Live Video Commerce can work in two ways:
1. Brands and retailers conducting Live Commerce events have the opportunity to invite on stage customers who are already convinced.
2. The mere presence of other customers during the presentation offers spectators the social proof that the product is worth purchasing.
Live Commerce (also called Live Shopping) acts on two essential axes of the customer experience: information and feeling. Live Commerce allows spectators a 360° view of the products presented, to see them in action, and to ask questions to the presenter/seller.
This format gives the viewer a memorable experience based on entertainment that goes far beyond clicking on an "add to cart" button. And as a bonus, it can reduce returns by up to 50%. Plus, conversion rates are significantly higher — up to 35%! Live commerce events are a powerful way to leverage the biases that make up consumer purchasing decisions to your advantage.
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