online consumer behaviour

Online consumer behaviour

Interactive and Digital Marketing 5th of December 2014

Dr Lukasz Piwek

AVERAGE SPEND FOR XMAS GIFTS IN UK (2014)

£350highest in European Union

PROPORTION OF CONSUMERS PUT IN DEBT AFTER LAST XMAS IN UK (2014)

14%second highest in European Union (average 9%)

ibtimes.co.uk

vs

vs

vs

RESOLUTIONS ENDING IN FAILURE

88%(Wiseman, 2007)

ego depletion

resisting temptation !takes considerable effort and energy!and after some time !our capacity to resist is exhausted!leading to

(Baumaister et al, 1998)

complexity of consumer decisions !can result in ego depletion!

depleted consumers !are more likely to become passive!

and make more impulsive decisions !that may not fall in line with their true values

Baumaister et al (2005)

if you’re ego depleted!you’re more likely to be !selfish!use sexist language!make superficial judgements

Muraven et al (2003) Baumaister et al (2005)

Gaillot et al (2007)

judges grant more parole !in the morning !and just after lunchtime

Danziger et al (2011)

fox.com

behaviour economicswith quick introduction to:!

ego depletion!dual process theory!

priming!illusion of validity

behaviour economics“we are not always rational, !and we often make mistakes”!we are susceptible to influences!from our immediate environment,!irrelevant emotions, stereotypes,!beliefs, norms, and many other factors

wordpressphoto.org

13 x 24

system 1

system 2

automatic & unconscious rapid & low effort recognition, perception, orientation nonverbal

control & conscious slow & high effort rule following, comparison complex computations linked to language

13 x 24

Dual process theory Stanovich & West (2000)

primingimplicit (automatic) memory effect !in which exposure to one stimulus!influences a response !to another stimulus

florida!forgetful!

bald!gray!

wrinkles

exercising!rapidly!send!typical!clears

Bargh et al. (2000)

priming people with money!makes them more selfishVochs (2006)

support to increase !funding for schools !is higher !if voting takes place in schoolsBerger et al. (2008)

people litter less in the train!if there is a smell !of cleaning productDe Lange et al (2012)

women who were exposed !to flowers!perceived the man!to be more attractive!and sexierGueguen (2011)

more donation made !when word ‘love’!was added to messageGueguen (2011)

children consumed !45% more food !when exposed to !food advertising in cartoonsHarris et al (2009)

illusion of validityor illusion of skillwith example being!

stock traders

shares sold by traders!did better !than those they bought!by 3.2% per yearBarber & Odean (2002) based on 10,000 accounts and 163,000 stock trades

most active traders !had poorest results, !while the investors !who traded the least !earned the highest returnsBarber & Odean (2002) Trading is Hazardous to your Wealth

the men acted !on their useless ideas for trading!significantly more often !than women, !and as a consequence !women achieved !better results in trading !than menBarber & Odean (2006) Boys Will Be Boys

rifenews.com

entertainment shopping!

travel!work

online consumption changed our habits in

mobile!is the new !shop window

NUMBER OF CONSUMERS USING THEIR SMARTPHONE WHILE SHOPPING IN-STORE

70%

NUMBER OF CONSUMERS WHO CALL OR VISIT A BUSINESS AFTER LOOKING FOR LOCAL INFO ON THEIR PHONE

77%

(2013)

(2012)

consumers!co-create!

advertising!and branding

MORE VIDEOS UPLOADED TO

every 60 daysthan the top three broadcasters produced

in 60 years

(2014)

ONLINE VIDEO ADS RECEIVED

18.3%more viewer attention than TV commercials

(2012)

digital traces of!online behaviour!

search!click!view!like!

share!follow!

save

FOR $27* YOU CAN BUY

25010005000

likesfollowersviews

*boostlikes.com (2014)

TOP 10 ONLINE RETAILERS in UK, according to D&W (2014)

$160 bln

Value of goods sold in the last quarter of 2012

$150 bln +

kbcb.com (2013)

physical retail!is very alive!and kicking

retaileconomics.co.uk (2014)

20% in fashion

50% in electronics

CONVERSION RATES FROM GOING TO REAL STORE TO BUYING SOMETHING

95% in groceries

Experian (2014)

CONVERSION RATES FROM GOING TO WEBSITE TO BUYING SOMETHING

1-5%Experian (2014)

AVERAGE NUMBER OF ONLINE CUSTOMERS WHO ABANDON THEIR SHOPPING CART

68%Experian (2014)

online/offline split!no longer matters

online experience in offline retail

Apple

online experience in offline retail

Burberry

digital payment models

The amount it costs the United States Mint to produce 1 cent coin

1.6 cents US Mint (2014)

wearable technology!augmented reality

blippar.com

wearable technology!augmented reality

blippar.com

new delivery models

DHL

consumer “data science”

other innovations!augmented packaging!

intelligent displays and shelves!radical transparency!

online viral advertising!consumer-driven advertising!

crowdfunding

@motioninsociallukasz.piwek@uwe.ac.uk

examples of persuasive messages!in campus !

or on your favourite websites!twit image and description to

or e-mail to

online!persuasion !

strategieswith examples related to!

Cialdini’s social influence!Fogg’s persuasive technology

judgement heuristics!are mental shortcuts!we employ in making!

our everyday judgementsKahneman et al (1982)

Ashmore et al (1971) Worchel (1992) Cialdini (2001)

scarcity a perceived limitation of resources will generate demand

scarce items are perceived as !higher in value!

and more attractive !especially if we compete for them

metro.co.uk

ibtimes.co.uk

Ashmore et al (1971) Worchel (1992)

scarcity a perceived limitation of resources will generate demand

example!nightclub queue!“deadline tactic”

scarcity a perceived limitation of resources will generate demand

reciprocity people tend to return a favour

we may feel in debt !by getting uninvited favour !

small initial favour !can produce obligation to agree !

to much larger return favour Pease & Gilin (2000)

reciprocity people tend to return a favour

examples!mail appeal for donation:!18% success - mail only!

35% success - mail + gift!free sample in supermarket

Cialdini (2001) Wasko et al (2005)

reciprocity people tend to return a favour

Amount Twitter makes each time you look at your feed

$0.0008

reciprocity people tend to return a favour

commitment!consistency

people don’t like to be self-contradictory

Cialdini (2001)

example!“throwing a low-ball” in car sales!

by adding “surprise” costs !at the end of transaction !after initial agreements,!

and test drives

commitment!consistency

people don’t like to be self-contradictory

Provine (2000) Nosanchuk & Lightstone (1974)

Darley & Lantane (1968)

social proof people will be more open to things they see others doing

example!“canned laughter” in a comedy!

makes audience !laugh longer and more often,!

rate material as funnier!especially effective for poor jokes!

bystander effect

social proof people will be more open to things they see others doing

Average industry profit per commercial-flight passenger

$4

liking people are more easily swayed by people they like

Langlois et al (2000) Berscheider & Walster (1978)

attractiveness!attractive individuals are perceived as

talented, kind, honest, intelligent!similarity!

even small similarities!produce positive impression!

compliments!good cop/bad cop

liking people are more easily swayed by people they like

personalised & timed suggestions

personalised & timed suggestions

personalised & timed suggestions

scarcity

one-click choice

easy commitment!reduction & simplifying!higher motivation to engage!reduced cognitive effort!quicker goal achievement !& quick decision !can be rewarding!(but also regrettable)Fogg (1998) Bandura (1997) Desphande et al (1983)

lukasz.piwek@uwe.ac.uk@motioninsocial

motioninsocial.com/consumer

thank you

get those slides on