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The world of retail is becoming exponentially more personalized and targeted over time. In a crowded marketplace of products, services, and businesses, retailers must create unique customer experiences in order to stand out from the rest. To achieve that, they must use more and more data to understand their audience to tempt them to purchase. That’s where behavioral sciences and nudge marketing come into play.

The concept of nudge theory is to gently and subtly push someone to take some desired action, based on environmental factors. In the grocery store, that could be signage and display strategy to push a shopper towards purchasing a specific food. In the restaurant, that could be highlighting different foods on the menu to draw the diner’s eye. In ecommerce, it could be creating a customer journey in a website, with touchpoints all along the way to nudge the visitor towards purchase. All these together fall under the umbrella of nudge theory. By using the science of how we think and make decisions, we can be pushed towards a certain action with subtle or even overt hints towards a specific outcome.

The retail industry has been using this concept for years, even decades, to drive customer decision-making in their preferred direction, guiding customers towards conversion and purchase through the messaging, positioning, and other interactions that brands have with potential customers.

Nudge marketing, like third party cookies, is a helpful tool for marketers and salespeople alike, but increasingly creepy as you think about the idea more and more. The idea of a marketer designing customer experiences to push potential shoppers toward a decision feels invasive and even overbearing at times. This feeling is referred to as “paternalism,” where it feels like the nudger knows best when it comes to the nudgee’s decision-making processes. It’s important to balance the subtlety of nudges with the purpose of getting potential customers to take an action for their own benefit. This way, they feel like they’re in control of their decisions, even if they are being softly pushed towards a certain decision.

Some of the tactics when designing nudges in the retail industry focus on key aspects and the intangible value of the product to drive the customer toward purchase, such as availability, a sense of urgency, a personal connection, or a level of exclusivity. These factors also connect to and influence one another in how marketers use these to drive sales, transforming from one into another, or enhancing one another in how a product is positioned and marketed.

1. Availability

By calling out that a product is close to selling out or even completely sold out, a product becomes much more desirable because other people are obviously also shopping for the same item. When calling out a short supply of a certain product, you’re increasing the urgency around that product. Highlighting that only a handful are available suggests that the product is popular, which is why its in short supply. And seeing a tangible number for the amount left pushes a potential shopper to jump to purchase to not miss out on buying the product before others grab it up.

When a product is completely sold out, you can harness a visitor’s fervor and interest in the item by adding a field for joining a wait list for the return or restock of the product. That way, you can record any continued interest in items you no longer have in stock, and you can use this as a way for visitors to join your regular email or notification campaigns to get other brand news. This will keep your brand in the visitor’s mind, eventually giving them an opportunity to buy their desired product if its back in stock, or they’ll find another item to purchase with the continual stream of marketing emails.

2. Urgency

Adding a time limit or pressure component to the shopping experience will add a subtle push to a potential customer to commit to purchase. When faced with a certain time limit on a sale or on the temporary availability of a product, there is literally a ticking deadline for when purchase can be made. Giving an end date to a discount or sale price gives the shopper a window of opportunity for a better price on a product or brand that they were already checking out with the thought to make a purchase. This then gives them a push to make a purchase while this golden opportunity is presenting itself, so that they don’t miss out.

Going a step beyond the timing on a product or a sale is putting a timer on the online shopping cart itself. Knowing that they have a firm deadline to finish their purchase before their cart is entirely emptied and refreshed pushes a customer towards quickly making their purchase rather than thinking or waiting on their decision.

3. Personal Connection

Building a connection between a potential customer and a suggested product for purchase can create an emotional or sentimental connection to the purchase decision. Almost every ecommerce site will feature a section on each product’s page, highlighting similar products with a title like “Customers who bought this also bought…” This emotional connection of this product to others creates opportunities for two things to happen. Either the customer buys the desired product or a similar based on this imagined connection to a community of shoppers looking at items to buy, or they will buy the desired product and a similar one, creating up and cross-sell opportunities for the business.

Going deeper into visitor and customer data, online businesses can use collected data on online behavior to target specific audience groups with advertisements based on their demographic or interests. These marketing strategies can find shoppers on the platforms they spend the most time on to bring them to the business so they can make a purchase. By using the way online ads work to reach target audiences, the technology can branch out and bring the people you want to your business and to specific products that they’re more likely to purchase.

4. Exclusivity

As highlighted before, short supply puts the pressure to potential customers to commit to taking action. But with the success and popularity of hype marketing, showing that a product is exclusive, special, or limited edition adds an extra sparkle to its marketing. Having a limited time version of a standard product may push shoppers who have bought the standard version to also purchase the limited edition. Having low stock, high pressure product marketing opportunities for those who are in-the-know may reach the pinnacle of combining availability, urgency, personal connection, and exclusivity. These shoppers feel powerful from knowing about this limited stock, limited time, limited audience product and then feel powerful when making a purchase.

We Pride Ourselves as Nudge Marketing Experts

At OSG Analytics, we pride ourselves on understanding and harnessing the power of behavioral and cognitive analytics through our data frameworks and analysis methodologies. As a key part of behavioral sciences as applied to business, nudge theory has shown itself as a powerful tool for understanding customers and gathering data on them that can drive business growth. Contact us to learn about how our solutions can help your business grow through harnessing the power of cognitive analytics to understand your customers.

 

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