August 15, 2022

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6 factors to consider – Retailing Africa

5 min read
6 factors to consider – Retailing Africa

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by Terena Chetty. Success for a brand relies heavily on understanding the customer. This includes the underlying psychological factors that influence purchasing decisions. Such factors drive both ‘need-based’ and ‘want-based’ thought processes that ultimately define whether or not a consumer makes a purchase. The fact that decisions are motivated by a combination of emotional factors, rational thought and practical concerns, makes grasping psychological consumer dynamics crucial for brands.

The growth of the online consumer sector provides an added layer of complexity. While certain elements (such as great customer service) may translate across platforms, online consumers exhibit specific behavioural patterns indicative of their demands and expectations from brands. It is important to remember that an ecommerce site is not merely an online catalogue of products or services – it is an opportunity to connect to an in-bound potential customer on an emotional level.

This means that research and planning need to go into all aspects of development – from the visual layout to the technical functionality and even to payment options (for example, flexible payment terms lead to more impulse purchases, particularly when it comes to higher priced products or services). It demands a deep understanding of what makes a customer tick; and developing ways to satisfy needs and exceed expectations, while constantly staying abreast of trends and ecommerce best practices.

These are some of the key considerations for brands when it comes to online audience behaviour:

1. Choice and decision paralysis

Having a wide range of options for customers to choose from is great from a sales perspective. However, companies should be aware of “decision paralysis”, also called “choice paralysis”. This is a situation where too much choice leads to a potential buyer becoming overwhelmed and results in no selection being made in terms of a purchase. Ways to overcome this are to offer ‘recommended’ or ‘best sellers’, or even ‘picked for you’ items that are highlighted within the larger pool of options. An interesting study known as The Jam Experiment, conducted by psychologists Sheena Iyengar and Mark Lepper, illustrates this concept. The study showed that on days that a local grocery store offered 24 different flavours of jams, the conversion rate was 4%. However, on days that they cut down the selection to just six flavour options, the conversion rate went up to 34%!

2. Scarcity factor

Scarcity can speed up decision-making and lead to more conversions within a shorter space of time. It can take different forms, from limited time offers to a limited number of items or other relevant ‘scarcity’ factors. For example, an airline showing that a flight has just two seats remaining could prompt a consumer to make a purchase either due to the cost of the flight or the timing of said flight. From a marketing point of view, this can be reflected in phrases such as ‘don’t miss out’, ‘get it before it’s sold out’, or even a sales countdown timer on a site. From a social psychology perspective, this can also be referred to as ‘FOMO’ – fear of missing out. It is especially effective for online sales as (unlike in-store purchasing), virtual shoppers do not have sight of the actual products on shelf.

3. Word-of-mouth recommendations

Online consumers can access a wealth of information at the click of a button. Whereas, historically, word-of-mouth marketing generally originated directly from a person known to the consumer; the online environment offers a vast quantity of reviews from a wide range of users, surpassing geographic and demographic barriers. According to TrustPilot, 9 out of 10 consumers read reviews before buying products online. For brands to shine, not only must there be an option for customer reviews, but also a strong foundation of quality and service delivery that will drive positive feedback.

4. Impact of COVID-19

Hard lockdowns and safety concerns caused by the onset of COVID-19 has led to a massive increase in online shopping. Brands should be mindful of the fact that many people turned to online shopping for the first time during this period. Therefore, the ease of use of a site (e.g., regarding navigation, responsiveness, mobile-optimisation, check-out processes, availability of information and so forth), greatly influences the time spent on the platform, as well as the rate of sales conversions. This applies to both new and experienced users, so it is definitely worth investing in. Furthermore, the health pandemic resulted in far more businesses embracing and/or improving their online sales platforms. This has heightened the competitive landscape and necessitated improved customer journeys by brands in order to retain and attract buyers.

5. Delivery service

Short delivery times and free or low delivery charges provide an invaluable competitive edge. Delivery fees are a ‘grudge purchase’ – no shopper actually wants to pay for delivery – they would much rather spend those funds on their purchases. Where multiple sites offer similar items, consumers will naturally opt for those that offer free or discounted delivery charges along with speedy delivery times. Brands should consider shifting budgets to accommodate better delivery options – ‘free delivery’ can be considered an effective marketing tactic. In fact, a survey conducted by Walker Sands revealed that an astounding 90% of consumers would shop online more often if given the option of free shipping.

6. Convenience

Across all areas of focus, ‘convenience’ is a leading factor that motivates consumer behaviour. For an online platform, this could mean offering a ‘quick purchase’ or ‘guest shopper’ option where users can make a purchase without having to complete a lengthy sign-up process. Research by Baymard Institute shows that 28% of shoppers failed to complete a purchase because they were forced to create an account. This was the second highest reason for an abandoned cart (with extra costs such as shipping and taxes being the top reason). Convenience could mean offering various payment methods (credit card, electronic transfer, PayPal, cash on delivery etc.). It also relates to an effortless omnichannel online shopping experience that transcends devices so that users can move seamlessly from smartphone to tablet to laptop without losing settings and information.

Psychological factors are ‘living’ factors – this means that brands have to proactively and continually pursue knowledge that helps them better understand their customers and online users in general. In a digital age where customer experience fundamentally influences purchasing decisions, understanding the psyche of online shoppers is a vital part of strategic development; and brands that do it well will tap into a wealth of insights that, if implemented effectively, can take a business to a new level of success.

 

Main image credit: Pixabay.com.

 

 

Terena Chetty is head of strategy at 1Africa Consulting, and has extensive experience in public relations (PR), integrated brand strategy and consumer communications. She works closely with both pan-African and global brands, and holds a BA Degree in Communication Science (cum laude).

 

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