How Websites Drive 'End of Year' Impulse Purchasing
How does the "end of year" customer behavior" differs from the rest of the year?
Posted Jan 23, 2015
Back into the swing of a new year and we can start to look back at the mad rush that was the holiday season with newfound perspective.
So what characterizes the holiday season and end-of-year consumer? And how does their online behavior differ from the rest of the calendar year?
First some business facts:
- According to GeekWire, there’s a 16 percent increase in online shopping (excluding tourism) at the end of the year.
- Alibaba report that 9.3 billion dollars are spent during the month of November alone.
- During the weekend of Black Friday, the average consumer spends $159.55 on Ecommerce sites and the overall spend (from stores and online shopping) is $380.95.
From the Behavioral Psychology perspective, we can say that such statistics reflect the characteristics of what we can call the typical “end of year” consumer.
An end of year consumer purchases an average of 3.5 items on entering an Ecommerce site.
The “end of year” consumer is far more impulsive as a buyer than at other times of the year. They apply emotional judgment rather than logical judgement to their purchase decisions. So for example, they do not compare prices as much as normal and don’t read deeply into the product information or specs.
The ClickTale Customer Experience Analytics reveals that the percentage of new visitors that converted on sales period was significantly higher than regular times.
We also saw, that during the holiday season, a typical consumer purchases an average of 3.5 items on a single visit to a website. At any other time of the year a purchase of only 1.2 items takes an average of 3 site visits.
The psychology behind the impulse purchase
The reason for this significant difference in purchasing behavior is down to the various marketing manipulations performed by the websites during this period, that are designed to directly affect the cognitive decision making process, leading to impulsive, emotional-based purchasing.
Here are some of the common tactics we identified while looking at the data from a web-psychology point of view:
1 – Reinforcing group thinking
The end of year sales – vast campaigns and media buzz are designed to create a “herd effect” that captures and carries the consumer along with everyone else. This is a form of cognitive manipulation playing on two levels: First, it communicates to our basic physiological need to belong to the group or the herd. Second, in cases of uncertainty it allow us to learn from the experience of others – if everyone else is in a shopping frenzy, they must have a good reason for it!
2 – Destroying the rational process
While looking at Attention Heatmaps, we saw much less attention to details or product information. On the other hand there was increased attention on the featured items, images and catchy headers.
Consumers usually seek some form of logical justification to qualify their purchase decision. The “herd effect” generates the feeling that shopping must be a smart, rational, common-sense thing to do at the end of the year. And “if everyone else thinks so – it must be right”. So people are automatically conditioned to believe that purchasing during the end of year season is cost-effective and will save them money. And so, the more they will purchase – the more money they will save!
3 – Creating a sense of urgency
The Hesitation Time shown on the Link Analytics of the different Call-to-Actions was lower on the sales period, which means that clients thought less before pressing it. The popular Time Limitation used during sales season motivates customers to take action quickly. Urgency is the feeling that taking an action in the current situation is so crucial that it overrides their natural tendency to put off making a decision. And as a result, people feel that they have to buy from you now, today, this second.
Using Loss Aversion as a motivator is like telling someone he is about to lose a great opportunity.
When something begins to run low, people’s desire tends to rise. For example, the weekend of Black Friday. This time limitation creates a sense of urgency in consumers’ minds which leads to an immediate purchasing action. An excellent way to get the attention of consumers and make them act is to tie your messages to a specific time frame or deadline. This effect eliminates the usual impulse to stop and consider the purchasing process and to try to determine whether you really want or need the item that badly.
The Page Console showed a significantly higher average Engagement Time per visitor on the sales period compared to regular time. This is the strong effect of emotional advertising used by consumer brands – which we see particularly salient at the end of year holiday period. Once our logical process is put aside, we remain only with our emotional process. And so, more than ever, we rely upon “how the product makes us feel” instead of a cold, calculated cost benefit analysis.
4 – Creating Collective Experience
The intense marketing efforts and slick advertisements that we see towards the end of year have another effect: They make people believe that they participate in a collective experience. Or in other words, if you’re not a part of it, then you don’t belong. Therefore, holiday season purchasing is seen much like a ceremony, where every year, people ‘get ready’ for the sales, setting aside their time and discussing it with friends, colleagues and family.
The combination of these 4 factors leads the “end of year” consumer neatly into a purchasing trap. It’s true that Ecommerce sites try to use similar principles throughout the year, but despite other small purchasing peaks over the year, there’s nothing quite as strong as the “finality” associated with the end of an old year and the beginning of a new one. So strong, in fact, that holiday purchasing figures are one of the main indicators used to determine an economy’s overall state of health.