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Online Consumer Behaviour

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Guest lecture for 'Interactive and Digital Marketing' 3rd year module at the University of West of England (UWE), Bristol on 5th of December 2014.

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Online Consumer Behaviour

  1. 1. Interactive and Digital Marketing 5th of December 2014 Online consumer behaviour Dr Lukasz Piwek
  2. 2. AVERAGE SPEND FOR XMAS GIFTS IN UK (2014) £350 highest in European Union
  3. 3. PROPORTION OF CONSUMERS PUT IN DEBT AFTER LAST XMAS IN UK (2014) 14% second highest in European Union (average 9%)
  4. 4. ibtimes.co.uk
  5. 5. vs vs vs
  6. 6. (Wiseman, 2007) RESOLUTIONS ENDING IN FAILURE 88%
  7. 7. resisting temptation ! takes considerable effort and energy! and after some time ! our capacity to resist is exhausted! leading to ego depletion (Baumaister et al, 1998)
  8. 8. complexity of consumer decisions ! can result in ego depletion! depleted consumers ! are more likely to become passive! and make more impulsive decisions ! that may not fall in line with their true values Baumaister et al (2005)
  9. 9. if you’re ego depleted! you’re more likely to be ! selfish! use sexist language! make superficial judgements Muraven et al (2003) Baumaister et al (2005) Gaillot et al (2007)
  10. 10. judges grant more parole ! in the morning ! and just after lunchtime Danziger et al (2011)
  11. 11. fox.com
  12. 12. behaviour economics with quick introduction to:! ego depletion! dual process theory! priming! illusion of validity
  13. 13. behaviour economics “we are not always rational, ! and we often make mistakes”! we are susceptible to influences! from our immediate environment,! irrelevant emotions, stereotypes,! beliefs, norms, and many other factors
  14. 14. wordpressphoto.org
  15. 15. 13 x 24
  16. 16. system 1 system 2 automatic & unconscious rapid & low effort recognition, perception, orientation nonverbal control & conscious slow & high effort rule following, comparison complex computations linked to language 13 x 24 Dual process theory Stanovich & West (2000)
  17. 17. priming implicit (automatic) memory effect ! in which exposure to one stimulus! influences a response ! to another stimulus
  18. 18. florida! forgetful! bald! gray! wrinkles exercising! rapidly! send! typical! clears Bargh et al. (2000)
  19. 19. priming people with money! makes them more selfish Vochs (2006)
  20. 20. support to increase ! funding for schools ! is higher ! if voting takes place in schools Berger et al. (2008)
  21. 21. people litter less in the train! if there is a smell ! of cleaning product De Lange et al (2012)
  22. 22. women who were exposed ! to flowers! perceived the man! to be more attractive! and sexier Gueguen (2011)
  23. 23. more donation made ! when word ‘love’! was added to message Gueguen (2011)
  24. 24. children consumed ! 45% more food ! when exposed to ! food advertising in cartoons Harris et al (2009)
  25. 25. illusion of validity or illusion of skill with example being! stock traders
  26. 26. shares sold by traders! did better ! than those they bought! by 3.2% per year Barber & Odean (2002) based on 10,000 accounts and 163,000 stock trades
  27. 27. most active traders ! had poorest results, ! while the investors ! who traded the least ! earned the highest returns Barber & Odean (2002) Trading is Hazardous to your Wealth
  28. 28. the men acted ! on their useless ideas for trading! significantly more often ! than women, ! and as a consequence ! women achieved ! better results in trading ! than men Barber & Odean (2006) Boys Will Be Boys rifenews.com
  29. 29. online consumption changed our habits in entertainment shopping! travel! work
  30. 30. mobile! is the new ! shop window
  31. 31. (2013) NUMBER OF CONSUMERS USING THEIR SMARTPHONE WHILE SHOPPING IN-STORE 70% (2012) NUMBER OF CONSUMERS WHO CALL OR VISIT A BUSINESS AFTER LOOKING FOR LOCAL INFO ON THEIR PHONE 77%
  32. 32. consumers! co-create! advertising! and branding
  33. 33. (2014) MORE VIDEOS UPLOADED TO every 60 days than the top three broadcasters produced in 60 years (2012) ONLINE VIDEO ADS RECEIVED 18.3% more viewer attention than TV commercials
  34. 34. digital traces of! online behaviour! search! click! view! like! share! follow! save
  35. 35. FOR $27* YOU CAN BUY 250 1000 5000 likes followers views *boostlikes.com (2014)
  36. 36. TOP 10 ONLINE RETAILERS in UK, according to D&W (2014)
  37. 37. Value of goods sold in the last quarter of 2012 $150 bln + $160 bln kbcb.com (2013)
  38. 38. physical retail! is very alive! and kicking retaileconomics.co.uk (2014)
  39. 39. CONVERSION RATES FROM GOING TO REAL STORE TO BUYING SOMETHING 20% in fashion 50% in electronics 95% in groceries Experian (2014)
  40. 40. CONVERSION RATES FROM GOING TO WEBSITE TO BUYING SOMETHING 1-5% Experian (2014)
  41. 41. AVERAGE NUMBER OF ONLINE CUSTOMERS WHO ABANDON THEIR SHOPPING CART 68% Experian (2014)
  42. 42. online/offline split! no longer matters
  43. 43. online experience in offline retail Apple
  44. 44. online experience in offline retail Burberry
  45. 45. digital payment models
  46. 46. The amount it costs the United States Mint to produce 1 cent coin 1.6 cents US Mint (2014)
  47. 47. wearable technology! augmented reality blippar.com
  48. 48. wearable technology! augmented reality blippar.com
  49. 49. new delivery models DHL
  50. 50. consumer “data science”
  51. 51. other innovations! augmented packaging! intelligent displays and shelves! radical transparency! online viral advertising! consumer-driven advertising! crowdfunding
  52. 52. examples of persuasive messages! in campus ! or on your favourite websites! twit image and description to @motioninsocial or e-mail to lukasz.piwek@uwe.ac.uk
  53. 53. online! persuasion ! strategies with examples related to! Cialdini’s social influence! Fogg’s persuasive technology
  54. 54. judgement heuristics! are mental shortcuts! we employ in making! our everyday judgements Kahneman et al (1982)
  55. 55. scarcity a perceived limitation of resources will generate demand scarce items are perceived as ! higher in value! and more attractive ! especially if we compete for them Ashmore et al (1971) Worchel (1992) Cialdini (2001)
  56. 56. metro.co.uk
  57. 57. ibtimes.co.uk
  58. 58. scarcity a perceived limitation of resources Ashmore et al (1971) Worchel (1992) will generate demand example! nightclub queue! “deadline tactic”
  59. 59. scarcity a perceived limitation of resources will generate demand
  60. 60. reciprocity people tend to return a favour we may feel in debt ! by getting uninvited favour ! small initial favour ! can produce obligation to agree ! to much larger return favour Pease & Gilin (2000)
  61. 61. reciprocity people tend to return a favour examples! mail appeal for donation:! 18% success - mail only! 35% success - mail + gift! free sample in supermarket Cialdini (2001) Wasko et al (2005)
  62. 62. reciprocity people tend to return a favour
  63. 63. Amount Twitter makes each time you look at your feed $0.0008
  64. 64. reciprocity people tend to return a favour
  65. 65. commitment! consistency people don’t like to be self-contradictory example! “throwing a low-ball” in car sales! by adding “surprise” costs ! at the end of transaction ! after initial agreements,! and test drives Cialdini (2001)
  66. 66. commitment! consistency people don’t like to be self-contradictory
  67. 67. social proof people will be more open to things example! “canned laughter” in a comedy! makes audience ! laugh longer and more often,! rate material as funnier! especially effective for poor jokes! bystander effect Provine (2000) they see others doing Nosanchuk & Lightstone (1974) Darley & Lantane (1968)
  68. 68. social proof people will be more open to things they see others doing
  69. 69. Average industry profit per commercial-flight passenger $4
  70. 70. liking people are more easily swayed by people they like attractiveness! attractive individuals are perceived as talented, kind, honest, intelligent! similarity! even small similarities! produce positive impression! compliments! good cop/bad cop Langlois et al (2000) Berscheider & Walster (1978)
  71. 71. liking people are more easily swayed by people they like
  72. 72. personalised & timed suggestions
  73. 73. personalised & timed suggestions
  74. 74. personalised & timed suggestions scarcity
  75. 75. one-click choice easy commitment! reduction & simplifying! higher motivation to engage! reduced cognitive effort! quicker goal achievement ! & quick decision ! can be rewarding! (but also regrettable) Fogg (1998) Bandura (1997) Desphande et al (1983)
  76. 76. thank you lukasz.piwek@uwe.ac.uk @motioninsocial get those slides on motioninsocial.com/consumer

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