Psychology in the Online Marketplace
Through the many measures taken in response to it, the Covid-19 pandemic revealed to the world the important role an online marketplace can play in our lives, especially as we progress towards a post-Covid future. Although online shopping is nothing new, the pandemic has forced it to become more of a necessity than a choice. Sitting in our homes, advised not to go out unless absolutely necessary, online shopping became the only option for many of us, even for those like myself, who had never previously spent much time shopping online. However, this rise in online shopping raises an interesting question: how do the psychologies of the online marketplace and brick-and-mortar institutions differ?
Rise of Online Shopping During the Covid-19 Pandemic:
As could be expected during a global lockdown, online shopping drastically increased during the pandemic. In 2020, Black Friday online spending increased 22% to a new record of $9 billion and Cyber Monday online sales reached a record breaking $10.8 billion. Online shopping provided people with many of the same options as retail shopping, oftentimes more, without any of the risk of exposure to the consumer. Also in 2020, 49% of global consumers shopped online more than they did prior to the pandemic, a number that jumps to 62% for just US consumers. The rise of online shopping due to Covid-19 is irrefutable, but online shopping opened the door for both new benefits and downsides. It’s rise has potential implications for a change in the psychology of the consumers when purchasing.
Psychology of Retail Shopping:
Though it can at times seem random and chaotic, retail shopping is the product of extensive planning, psychological research, and data analysis. There are countless examples of retail techniques that play on our habits and our innate reactions. For example, the most profitable merchandise is placed on the right side of the store because most shoppers are right handed and tend to turn right when they enter a store. Stores will even provide mirrors just to slow down customers because we tend to stop and look at ourselves.
This use of psychology seems fairly harmless, but this practice can become much more invasive and even scary at times. In fact, in The Power of Habit, Charles Duhigg discusses how some stores were able to use patterns and spending habits among previous customers to predict the stages of pregnancy of their consumer and use that to determine their most needed purchases. They could then target specific sales to that customer depending on their needs.
Far from this scary but real extreme of psychology in retail is a simple understanding of spending habits. Psychological research has also determined that “People are thirty-times more likely to try a brand if they expect it to deliver strong emotional, identity, social, or functional benefits”. When shopping we automatically prioritize our core psychological needs and retailers use this to influence consumers to purchase certain products.
Psychology of Online Shopping:
As shopping moves from the realm of the physical to that of the digital, the principle of using psychology to influence our purchases stays the same, but there are a few techniques that are somewhat unique to online shopping. One psychological fact that I’m sure is commonly understood by any former middle/high school students is that we place a heavy emphasis on social acceptance. This is a phenomenon called social proof. Online, retailers can use this need for social proof by providing information from other users about the products, like reviews or testimonials.
The digital marketplace also heavily utilizes the concept of scarcity. Most people are more likely to purchase a product when there is pressure. Online retailers can leverage this by showing timers, countdowns, or the number of products left. These practices can sometimes be used in physical retailers, but the online marketplace allows them to expand to levels that could not be reached in the physical marketplace.
This is the main difference between psychology in the physical and digital marketplace. While both can use psychological research to entice consumers, the digital marketplace is free of many of the limits of the physical marketplace. Online shopping offers us instant gratification, variety, and anonymity, features that we simply cannot get in a physical store. Online shopping is simply more attractive to us psychologically, and the Covid-19 pandemic only helped highlight this by making physical shopping much more dangerous and difficult.
While online shopping might offer more than physical shopping, it also presents a few new challenges. The most major of these challenges is the potential lasting effects on our brain. By virtue of their platform, digital retailers have options for psychologically addictive techniques to an extent that cannot be matched by the physical marketplace. For example, pop-up ads, ad tracking, or gamification. While regular shopping might be addictive, online shopping can push that addiction to new heights.
Online shopping might also be ruining our attention span. Studies have found that online shopping has led to brain signals correlated with less concentration and focus. We already know that the internet can cause many problems for our attention span and information comprehension, but when those inherent effects of the internet are coupled with online shopping we have to contend with issues like slowed reaction time and decreased concentration.
What Does This Mean for the Future?
The digital marketplace forces us to consider not only the psychology of shopping and advertising in general, but also the specific psychology that is unique to the digital platform. Use of the digital marketplace will continue to increase, especially after the Covid-19 pandemic. We now need to learn how to navigate the psychology of both the physical and digital marketplaces. We may not be able to fight our natural psychological responses to certain techniques, but we can learn to recognize them for what they are when we see them. We can look at the flashy and colorful countdown clocks or the endless pages of testimonials and realize that we are looking at techniques designed to persuade us to purchase products. We can realize that the endless ads and hyperlinks popping up on our screens could hurt our concentration. While we might not be able to avoid the digital marketplace, we can learn to use it for its benefits and recognize the psychological tricks and potential pitfalls rather than falling prey to them.