Shopping Online? 5 Ways You’re Tricked Into Spending More
Amazon’s Prime Day was a bust last year, at least judging by initial consumer feedback. The online retail giant promised eager shoppers thousands of great deals for its “Black Friday in July” event, but many were frustrated by sold-out items and less-than-thrilling deals on boring products. Annoyed shoppers took to Twitter to vent, calling Prime Day a “confusing mess” and a “horrible sale with misleading promotion.”
Here’s the funny thing, though. Even though many lamented the lack of good deals, people still bought a lot of stuff from Amazon on July 15. Sales were up 80% over the same day last year, TechCrunch reported.
Shoppers may have been miffed that they couldn’t score a bargain-priced TV, but overall, people were clicking “buy,” snapping up deals on everything from Kindles to diapers.
“Customers worldwide ordered an astonishing 398 items per second and saved millions on Prime Day deals,” said Greg Greeley, vice president of Amazon Prime, in a statement. “Worldwide order growth increased 266% over the same day last year and 18% more than Black Friday 2014.”
From Amazon’s perspective, at least, Prime Day was a success. It encouraged people to visit the site, sign up for Prime memberships, and maybe make a few purchases. By touting limited-time offers and special deals, Amazon lured people to its online storefront and then convinced them to part with their cash, even if they couldn’t find the precise item they were hoping to buy. It’s a time-honored retail trick, and one of just many ways that online retailers of all types convince people to buy more. Here are five strategies that online retailers use to convince you to spend more of your money.
1. Free shipping minimums
No one likes to pay for shipping when buying online. A UPS and ComScore survey of more than 5,800 online shoppers found that 93% will take steps to avoid having to pay to have items delivered, with 58% of them deciding to buy more items to meet a free shipping minimum.
“Free shipping on any order” and similar promotions are another strategy retailers use to entice people to buy. It’s a trick that seems to be working. Shoppers who qualified for free shipping spent an average of 35% more than those who paid for shipping, the Wall Street Journal reported.
2. Making shopping seamless
“One-click” shopping and a streamlined payment process is another way online retailers encourage people to buy more online. If you have to enter your credit card information or create a customer profile, you may think twice about making a purchase. By eliminating those steps, retailers make impulse shopping easier. New features like the “Buy It” button on Pinterest or Amazon’s Dash button (which allows you to shop online without actually being online) further simplify the purchasing process.
“Changing the environment to be so frictionless can make the money non-apparent,” Dan Ariely, a professor of behavioral economics at Duke University and the author of Predictably Irrational: The Hidden Forces That Shape Our Decisions, told the Christian Science Monitor. “[W]hen you [enter credit-card information], you think about the money you are giving up.”
3. Creating a sense of scarcity
Creating a sense of scarcity is another way both online retailers encourage people to buy. “[P]eople are highly motivated by the thought that they might lose out on something,” noted Mark Macdonald on the Shopify blog.
Online retailers use a grab bag of tricks to create a sense of urgency or scarcity, from sale deadlines to warnings about limited inventory. After all, who hasn’t been tempted to whip out a credit card when confronted with the warning that there are “only 3 tickets left at this price”? Yet it’s often best to take warnings that this is you best or last chance to buy with a grain of salt.
“There may be a few seats left at that particular time at that particular price, but it doesn’t have anything to do with how many seats are left in the plane or in that ticket class,” Tom Godfrey, a spokesman for Australian consumer advocacy group Choice, told News.com.au.
4. Buy online, pick up in store
If you think retailers are offering you the option to buy online and pick up (or return) in store purely for your own convenience, think again. Getting online shoppers to visit a brick-and-mortar store is a way to boost sales by encouraging impulse purchases.
“[W]e are getting that customer into the store,” R.B. Harrison, Macy’s chief omnichannel officer, told the Washington Post. “And that then becomes an opportunity for her to either, on her own buy something else, or in a really good situation, to use our selling skills and offer other alternatives. If a guy’s buying a dress shirt, you sell him ties. If you bought a KitchenAid mixer, how about the adapter so you can make pasta?”
Harrison said that shoppers who buy online at Macys.com and pick up in store leave with an additional $20 to $25 of merchandise, on average.
5. Nagging you to buy
Online retailers are tracking your every move online, and they’re using that information to try to convince you to buy stuff from them. Retargeting ads – those ads that follow you around the Internet after you’ve visited certain sites – may be annoying and even a little creepy, but retailers use them because they’re cheap and they work. Ninety percent of online marketers said they’re more effective than search or email campaigns, a survey by AdRoll found.
Retailers will also use other tricks to get shoppers who’ve expressed an interest in their products to pull the trigger on a purchase, from bombarding you with marketing emails to sending you discount codes if you’ve put items in your shopping cart but haven’t completed a transaction.
In some cases, however, retailers’ strategies may be backfiring. One survey found that 47% of millennial shoppers will intentionally abandon their online shopping cart in the hopes they’ll be sent a coupon to encourage them to complete the purchase.
Follow Megan on Twitter @MeganE_CS