Choosing Familiar Choices: The Impact on Decisions and Its Implications for Marketing Strategies
In the wake of the pandemic, online shopping behaviours have drastically shifted, with a third of global shoppers being new to e-commerce in 2020. This surge in digital commerce has created a need for transparency and credibility, as consumers seek to make confident online purchase decisions.
Lauren Fernandes, director of Nielsen's Intelligence Unit, suggests that infusing trust and credibility into e-commerce can be achieved through tactical features of the payment process or experiential elements that enlighten shoppers on their product's origin or journey.
The Ambiguity Effect, a cognitive bias, plays a significant role in this context. It occurs when a person given two viable options doesn't give consideration to both equally, often eliminating good or better choices due to lack of knowledge about the brand or service. To reduce uncertainty and combat this effect, it's crucial to use clear, detailed product descriptions and transparent information.
Researchers believe that the Ambiguity Effect occurs because consumers want quick, effortless decision-making and problem-solving. Providing relevant information is a competitive edge, as it helps consumers feel well-informed about their options. For instance, detailing fees, delivery estimates, and pricing options can help consumers make informed decisions and reduce the Ambiguity Effect.
Some consumers may feel overwhelmed with too much information and want to make quick decisions. However, they can be guided to hear about potential benefits of new products or services with clear and concise guidance. Marketers might want to give consumers more direct-to-consumer experiences, such as using augmented reality to simulate a store experience or product use.
Online shoppers, on average, order from four different e-tailers, with some in China and South Korea ordering from up to six e-tailers. However, consumers are willing to switch to a different online retailer if the retailer delivers a fake/faulty product or has a higher price. Seven in ten global shoppers prefer online retailers with product reviews, with a preference for reviews from verified shoppers.
For newer brands, structuring marketing campaigns to focus on potential benefits of trying the product or service can help reduce risk aversion. Kickstarter.com encourages creators to present their projects with transparency and accuracy to set realistic expectations for backers. ClearVoice offers content creation services to help brands present clear, informative, and trustworthy content to fight the ambiguity effect.
Clarity in tone and presentation of information is key in aiding consumers in active decision-making and encouraging trust. Marketers should understand the Ambiguity Effect and create marketing materials based on evidence-based consumer psychology. By doing so, they can foster a more transparent and trustworthy e-commerce landscape, making online shopping a more enjoyable and confident experience for all.
Approximately 50-60 percent of U.S. shoppers made their first e-commerce purchase between March and October 2020. With this shift towards online shopping, it's essential for brands to prioritise transparency and credibility to attract and retain customers in this rapidly evolving digital marketplace.
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