Consumer Behaviour in the eCommerce World – I

This is a start of the first blog in our series of Insightful blogs we will publish in coming months. In this series we will try to address some very deep rooted questions and areas which influence, build and sustain the ecommerce ecosystem. At the same time discovering along the way why things work or not work in this business and how to make them work or work better.

2 decades or more of Internet and ecommerce has opened up a whole new mode of consumer and vendor interaction, many older models have been broken down, many businesses have been formed many closed down. Many companies which didn’t even exist 20 years back are among the top 10 largest revenue generating firms. A whole new economy has shaped up and with this there have been changes, some very subtle, some very prominent, in the consumer’s behaviour and buying processes and attitudes towards the same. Consumers have formed some new habits. Many things however remain somewhere related or cued in from the older world as well, even from human evolution, history and some established old world business models. The current treatise tries to connect some dots around the same; it tries to decipher the factors influencing consumer behaviour in the digital world, it tries to examine the reasons behind those factors and suggests how e-retailers can utilise this knowledge for business.

Consumer behaviour depends primarily on five factors:

1)      Functional

2)      Social

3)      Experiential

4)      Situational

5)      Consumer Traits

Let’s discuss them one by one

1)      Functional Attributes: Functional Attributes constitute a set of parameters that depend upon the consumer’s perception of the e-retailer (now if you are an entrepreneur coming up with a new portal, may be you are spared of this) i.e. consumer’s past experience (this may be just the positioning and brand recall, not necessarily buying) influences the intention to buy from the e-commerce portal. Thus brand image building, positioning become so very important. The reason behind horde of investor money thrown to create brand awareness, advertising, creating specific brand positioning becomes so very evident.

Another attribute is the shopping experience itself: Intention to purchase is influenced by past shopping experience as well. So if someone likes to shop at your brick and mortar store, he/she is more likely to shop at your ecommerce store. Also, it implies that if you get a new customer and give him/her a good experience of shopping the first time, he/she is more likely to visit again and again. It also thus lays emphasises on your effort to acquire new customers, the effort to make them brave the initial static friction and induce them to buy. New customer acquisition has to be a key measuring statistic as well as tracking the repeat buys from existing customer.

2)      Social: Human beings are social animals. Did you not crave for that toy that your friend had when you were a little kid? Don’t you want to own that swanky car your friend just bought and posted a pic of on Facebook? 😉 Well, let me put it in a clearer perspective, intention to buy is influenced by:

a) Attitude towards the behaviour (like the functional factors we already discussed, and some more coming up later in this post) and,

b) Subjective Norm: this mainly refers to an

i) Individual’s belief that specific referents dictate whether or not should one perform the behaviour, and,

ii) Motivation to comply with the specific referents.

Consumers are 71% more likely to purchase an item when referred to by social media (check this link out and the infographics).

Social Media is one for the most important medium that you need to very carefully handle. There are things you can control and those you cannot! So be careful and go full on with Social!

3)      Experiential: For decades retailers and researchers have been aware that shopping is not just a matter of obtaining tangible products but also about experience, enjoyment and entertainment. Well you would recall the shows and activities that keep on happening on the well floor of a shopping mall? And the aroma of perfumes that greet you when you enter a store? And the nice smiling sales person who greets you and assists you in your shopping while you sift through the stuff, and! How the neatly arranged store helps you in shopping more and better.

Experience in the ecommerce parlance then has to be how inviting the website is, how it eases navigation to the desired product for the visitor, how it eases the decision making process of the consumer and how inviting it is in the first place.

Environmental psychology suggests that people’s initial response to the environment is affective and this emotional impact generally guides the subsequent relations within the environment. Thus it is so very important to make a great first impression, an awesome first experience. Your home page needs to WoW! the visitor, the colour combinations, user Interface design, user experience become so very important.

Experiential aspects of e-shopping are also currently driving the industry to try out newer models using videos, product reviews, 3-Dimensional store fronts, virtual trial rooms, try and buy experience. New and progressive ecommerce stores are now trying to take the consumer experience to a whole new level. We will see many interesting things happening in this space.

4)      Situational: One of the most significant attractions of ecommerce is perception of convenience. One does not have to travel to the store, brave the traffic, park and spend hours to get back. It’s all just a click away! And as eRetailers, you gotta make that click as convenient as possible to sustain that differentiation. In as much as the convenience is an important attractive force for the customer to come to your site instead of going to that mall near his/her home, frustration can resonate and become a repulsive force if the consumer is made waiting, made to fill unnecessary info, if the navigation sucks or the checkout process is lengthy.

eCommerce portals need to make choices easier for the customers, now increasingly, this area is where most of the ecommerce companies currently have to improve leaps and bounds; today consumers get loaded with such a lot of info that the it becomes so difficult to make that right choice. Applying filters, comparing products based on some detailed specs (half of which the consumer will not even relate to) does not make any sense. You gotta make your consumers make the right choice easier by advising them on the best possible suited product for them rather than just trying to sell all that you have on your portal. Personalisation becomes a very important characteristic here, the more you know about your customer, the better you will be able to handle the situational factors. The better you can understand the patterns of associations, the better it is. Big Data and real time analytics is going to play a very important role in coming future for ecommerce industry just to improve this situational factor.

5)      Consumer Traits: At last consumer traits like gender, education, income, age, Need for Cognition (NFC, a need to structure relevant situations in meaningful, integrated ways" and "a need to understand and make reasonable the experiential world. Higher NFC is associated with increased appreciation of debate, idea evaluation, and problem solving, check link here) and Optimum Stimulation level (OSL, a person’s preferred amount of physiological activation of arousal, check links here and here).

Let’s take them one by one:

Gender: We can draw a lot of insight on the effect of gender from the point of view of Social Role Theory and Evolutionary Psychology. Men tend to be more task oriented, systems oriented and more willing to take risks than women. This is because socially, people are expected to behave in these ways (Social Role theory) and because this adaptive behaviour has given people particular traits in process of natural selection (evolutionary psychology). Researchers have identified many gender differences that can be potentially relevant to ecommerce behaviour, eg: Spatial navigation, perception and styles of communication.

Gender differences in shopping behaviour can also be attributed to the hunter gatherer approach of ancient human beings and we can apply the learnings to design specific portals and navigation styles suited to men or women targeted websites. Males tend to use and ‘Internal map’ style of navigation, they had to travel far and needed to keep a mental map of the landscape, hunting required accurate navigation over long distances. Females, on the other hand use ‘Landmark’ navigation style because they would primarily gather stuff close to the home base at times more for fun than sustenance. Thus ecommerce portals selling male oriented products can have an extended hierarchal structure, connected sub pages. Female oriented websites on the other hand need to showcase as much information on the 1st landing pages as possible, they also need to make the user experience more fun (well that does not mean you can have male oriented sites boring J, why should women have all the fun)

Education and Age: Generally higher education level of the consumer is associated with more information seeking, both from existing and new sources, they process more information before making the final decision. Lesser educated consumers rely on lower information cues. Older consumers are less likely to seek more detailed or alternative information as researches show that age is related to the link between satisfaction with a product and loyalty.

NFC and OSL: Individuals with personalities high on NFC tend to be more exploratory, they would deal in more search activities on the portal. On the other hand, individual high on OSL will tend to have a higher need of environmental stimulation and are more likely to browse motivated by emotion than cognition.

Understanding consumer behaviour in the realm of digital world is still in an evolutionary phase and begs to be researched deeper and better. eCommerce website owners also need to pay special attention to this topic as it is one of the most essential aspects of attracting and retaining customers to the website. Hope this information was fun and useful. This is the first blog in series of blogs dealing with Consumer behaviour in the digital world.  I will soon come up with a sequel. Till then watch this space out. Cheers!

[Connecting Dots is a consulting led deep engagement driven software services organisation. We are ecommerce web development experts and help our customers achieve success by combining our business, functional and technical know how in the ecommerce domain]