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In the 21st century, online marketing has taken over the traditional advertisement channels. As attractive as the idea of shopping online from the comfort of your own home may be, we, as customers, must understand that marketers will exploit every single vulnerability that the online platforms provide to reach us easier and close more sales. After all, the main purpose of all businesses is to make money, otherwise they wouldn't exist. This might come as a shock to us because many companies promote their businesses as "customer-oriented", which should in theory mean that they place customer satisfaction above everything else, which is rarely the case. However, there are certain things we can do to avoid being manipulated into impulsive purchases by understanding the different tricks being used and how we can avoid falling for them. In this article I am going to walk you through the five most commonly used practices and what you can do to beat the system and make your online purchases easier and more enjoyable in the long run.
Discounts are the oldest trick in the book. For as long as retail sales have existed, they have been the go-to method to close a sale. You see them everywhere - in your local supermarkets every week, your mobile provider if you sign a new contract, hardware stores and the list can go on forever. Before you jump out of bed the next time you see a 30% discount on your favorite brand of cookies in the grocery store, think about how discounts work. In order for you to understand discounts, you have first have to realize that all businesses exist with one main purpose - making money. To make this easier to understand, let's say that your local supermarket has a 50% off offer on eggs for the next two days. What are the odds that you are going to spend the time and energy to get to the store to buy just a dozen of eggs? I'll answer this for you - close to zero. Managers rely on the general consumer behavior, which dictates that once a customer walks through the door of a retail establishment, the chance of them buying more things than they initially planned to are greater than the lost profit from putting an item on discount. Do you see where this is going? Spend 1$ less on eggs and an additional 15$ on things that are not essential to you at the moment, such as that freshly baked bread that smells so irresistibly nice from the moment you walk in.
Solution: If saving money is your goal, make a shopping list before you leave home, which you can follow, so that you don't end up spending money on things you don't need. Beat the system.
You've seen them before, so have I, they're everywhere! You innocently open up a website to browse through their collection and they jump right at you with BIG flashy letters and a ticking clock. "Complete your checkout in the next 15 minutes and get free shipping on your order". The simple truth is that the shipping is most probably free anyway, but you didn't know that and businesses will use it against you to close your order as fast as possible. More often than not, this leads to impulsive, not well considered purchases and a dent in your budget. Don't get me wrong, these discounts are a great way to save some money if you really want to purchase something from the given website, but you should always take the time to do your research and make an informed decision, instead of an impulsive one. The good news is, there's an easy way around it.
Solution: Most of the time, these timers are automated, which means that if you return to the website at a later time, the same discount will be available for you to grab again. As I previously stated, do your research, check prices for similar products over different retailers and make the best decision possible.
3.Follow Up E-mails
This practice is not actually a trick used by businesses, it's more like a last resort to close a sale. The concept is simple - if you abandon your shopping cart with items in it, you might receive an e-mail a few days later with a discount code for 10-30% off. I know what you're thinking - where's the catch? There's no catch, that's why I mentioned it was a last resort used by businesses. As we previously understood, businesses want to make money and giving you a discount on specific items you have already chosen doesn't sound like a great idea, because they lose profit. However, some profit is better than no profit at all, which is why this is actually a really common practice throughout online retailers.
Here are some guidelines how to make the most out of your online purchase:
Once you have identified an item you want to buy, don't hit the pay now button right away. Complete all the steps, such as providing your e-mail address and shipping information, but do NOT complete the purchase. Leave the website and wait for a few days. The most common way businesses go about this is sending an initial e-mail, which only contains a reminder that you left products in your shopping cart. Great news, that means that the discount is coming shortly. Wait for another day or two and you should get those additional savings.
Disclaimer: Obviously not every business uses this last resort to convert a customer, but the risk is definitely worth the reward.
Pricing is a very broad subject worth writing an entire article over, but for the sake of keeping this short and simple, we're only going to look at the psychological relationship between pricing and purchases.
Psychologists have been studying this topic for years and their conclusions are astonishing. If you have ever wondered why an item is listed at $9.99 instead of $10.00, the answer is simple - people are more likely to spend money when they see a one digit number, instead of two and respectively a two digit, instead of a three and so on, despite the fact that the difference is only $0.01.
Another trick some companies use is to list prices only in numbers, without the respective currency sign. Although this trick is more commonly used by restaurants and bars, some online stores use it too. When we, as consumers, see price listed just as a number, for example 10, it looks simple and, subconsciously, we don't associate it with money. If, however, the listing says $10.00 we see all these numbers and currency abbreviations, which make us think twice before buying anything.
Furthermore, we are more likely to spend money online than we are in a physical retail store. The reason is simple - it's easier to spend money we don't physically see, for example when buying from an online store and paying with a credit/debit card in contrast to cash, which we can see, count and estimate how much we have left.
Although there is no direct solution to this problem, it just goes to show how important those few moments before clicking the "Buy now" button are in terms of making rational decisions.
5. Free Items
Last but not least, FREE products. Wait, what? FREE?!? This is a joke, right? I want in!
Hold up. How can an item be free? That's impossible, right? Actually, it is and isn't at the same time. Free items are a fairly new addition to the market, introduced just a few months ago by online retailers. The idea is simple - you don't pay a single cent for the product itself, just cover the shipping costs. Here's where things get tricky, because the "free" items are not actually free. They cost money and materials to produce. However, the products we can see listed as free are low-quality goods, with very little material value and usually have free shipping provided by the manufacturer. Retailers charge a fixed fee for shipping - usually $10, which by itself can create a great profit margin for them of up to $9, depending on the item in question. On the other hand, everyone loves a bargain and those $10 don't seem like much when you're getting the actual item for free, especially if it has a scratched out price tag of $49.99, we think we're saving money, when in reality, we're overpaying.
To sum it all up...
In general, businesses will do anything to make you buy their product, now, because that's the only way they can survive. This article is meant to give you insight into the practices used on the market today, so that the next time you want to purchase something online or at a store, you know what could be hidden behind the scenes and make a better decision.
Until next time, shop smarter!