Chapter 16 – Consumer Cyberpsychology and Online marketing
Chapter Summary
The Rise of Online Shopping
- New ways of engaging customers, new business practices, and a global market have all combined to shift commerce online.
Who Shops Online?
- Customers can be profiled or segmented according to their characteristics.
- A typology of the global online consumer describing consumers based on their psychographic characteristics and their shopping attitudes and behaviours, segments them into four types; shopping lovers, direct purchasers, suspicious browsers, and incompetent consumers.
- These consumers exhibit different patterns of behaviour online, and also frequent distinctive online spaces.
Factors Affecting Online Shopping Acceptance
- The theory of reasoned action (TRA) and the technology acceptance model (TAM) have been used to explain the acceptance of e-commerce.
- The other most common beliefs examined in online shopping adoption are trust, perceived risk, security and privacy concerns, previous shopping experience, self-efficacy, convenience, innovativeness of the user, enjoyment and social influence.
- Attitude towards shopping online is the most influential variable in predicting intent to shop online.
- Convenience has become a more significant driver of intention to shop online.
Motivation for Shopping Online
- Hedonic and utilitarian motivations drive the behaviour of different consumer segments.
- The decision to shop online is at least partly an emotional one. Pride and excitement have the potential to be amplified by social media in sharing shopping experiences.
Consumer-Brand Relationships
- The internet has changed the way that brands and customers interact.
- Building a strong brand social network pages on social platforms can gain greater brand awareness, consumer-brand relationships, transmission of positive word of mouth (WOM) traffic.
- Expected benefits from participation drive enthusiasm for a brand and increase interaction.
- This can have a significant effect on consumer choices.
- Online product reviews have a significant effect on sales elasticity
- The most helpful characteristics of product reviews for decision-making are the quality of arguments, the usefulness of the reviews, and the credibility of and trust in the reviews.
- Positive reviews have a marginally more positive impact on purchase intention than negative reviews do on reducing intention.
eLoyalty and Retention of Customers
- Long lasting customer relationships are considerably more valuable than once-off transactions.
- eLoyalty is a favourable attitude towards an online business, intention to repurchase, and the likelihood of recommending the brand to a friend.
- There are three areas where eLoyalty can be won or lost; pre-purchase, during-purchase, and after-purchase.
- Consumers who feel that they are not satisfied or getting value from a transaction are more likely to look elsewhere for their purchases.
Decision-Making and Purchase Satisfaction
- The internet has brought consumers expansion of freedom of choice and of information.
- Decision difficulty has increased by increasing task complexity, trade-off difficulty and preference uncertainty.
- Decision difficulty can result in poor choice-making.
- Coping strategies include avoiding making the decision, and engaging in choice simplification.
- All of these decisions may lead to sub-optimal purchases.
- Excessive choice can lead to decision regret and diminished satisfaction.
- Decision-making aids can help towards resolving these problems.
Persuasion
- Creating successful human computer interactions requires the motivation and persuasion of people.
- There are four ways in which computers, or technology, are used as tools for persuasion: Increasing self-efficacy; providing tailored information; triggering decision-making; and simplifying or guiding people through a process.
The Impact of Design on Persuasion
- The more credible a website is, the greater its persuasive ability.
- The most important elements of a website for influencing credibility are the design look and the information structure.
- Visually fluent homepages lead to a greater preference for the site and higher browsing and revisit intentions
- Persuasive strategies are often built into the design of eCommerce websites as well as social commerce.
- For example, scarcity and urgency are often activated through limited-time offers, consensus is used to indicate that a product or brand is desirable because others like it or have purchased it.
- Consumers are increasingly willing to use mobile payment methods because of their simplicity and convenience, however, people paying by card are more likely to spend more than those paying with cash.
What Makes Content Viral?
- Many advertisers attempt to harness the power of viral advertising, as it can be a very cost effective and successful way to exploit the power of WOM to communicate about a brand.
- The decision by the consumer to spread the viral ad is entirely voluntary,
- The arousing emotionality of content shapes the virality of it.
- Positively emotional content is more likely to be shared than negative.
- People who are more individualistic and seek affection are more likely to spread viral content.
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Chapter 16 – Useful Websites
The Journal of Consumer Psychology publishes research articles that contribute both theoretically and empirically to the understanding of the psychology of consumer behaviour.
http://www.journals.elsevier.com/journal-of-consumer-psychology/
The Interaction Design Foundation provides a wide range of literature on user experience design to improve experiences online. Many are useful for the consideration of user experiences in online shopping, to encourage people to purchase more online. For example the causes of shopping cart abandonment, homepage design for mobile ecommerce, and persuasion techniques to purchase more online.
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Chapter 16 – Further Reading
Personalisation and customisation have been key trends in retail over the last decade. This article looks at the differences between the two, and how retailers are delivering those experiences, online, through VR and AR, as well as offline.
A report on the importance of personalised experiences online, and in particular, getting it right for consumers. This has only become more important since the pandemic.
COVID-19 substantially increased the number of people shopping online. This article looks at the psychology of online shopping, and in particular, offers tips for reducing impulse buying or overspending.
https://time.com/6200717/online-shopping-psychology-explained
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Chapter 16 – Audio and Video links
Video Links
Psycho-economist Sheena Iyengar talks about decision-making processes and how to make choosing easier.
http://wwwperson.ted.com/talks/sheena_iyengar_choosing_what_to_choose
How to capture the joy of shopping online. Nimisha Jain, a consumer expert, talks about how to make the experience of shopping online more joyful. https://www.ted.com/talks/nimisha_jain_the_joy_of_shopping_and_how_to_recapture_it_online
Dr. Robert Cialdini describes six fundamental principles of persuasion through examples of where they have been applied
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Chapter 16 – Essay questions
- Discuss the ways in which online shopping customers can be segmented into groups in order to assist with marketing in meaningful ways to them. What characteristics can be used to create segmentation, and how does this assist in communicating with them?
- Evaluate the motivations, beliefs and attitudes that shape a willingness or resistance to shop online.
- Discuss the benefits to both the consumer and the brand of a strong consumer-brand relationship, with particular focus on how social media impacts that relationship.
- Describe the ways in which persuasion can be used in online shopping to change consumer behaviour. Use at least