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How Will E-Commerce Evolve to Reflect Real-World Purchasing Behavior?

  |  August 26, 2014   |  Comments   |  

Creating innovative purchasing systems to better reflect people's online behaviors can have greater influence than forcing users into a single "buy" option.

We recently had the privilege of presenting at the ClickZ Live conference in Hong Kong, where we spoke on the topic of smart analytics and how organizations can use design to make better sense and use of data.

One of our key points was around conversion rates: As marketers, we spend much of our lives trying to improve these. And often, the best we can ever hope for is an incremental improvement on an average. For all of 2013, the average conversion rate for mobile visitors to e-commerce sites across all sectors of the economy was 1.795 percent. Although ongoing, 2014 shows little sign of fundamentally changing this number.

To look at it a different way, try selling your services to a client where you deliberately and explicitly highlight that 98.205 percent of the people you direct toward your work will neither convert, refer, or return. Handshakes will be a lot harder to get.

No matter how you cut it, conversion rates for most types of e-commerce stores are abysmal. There's very little room to escape the fact that we are really terrible at influencing human behavior. Why is this so?

Where Conversion Rates Come From

Human behavior - although complex in its manifestations and motivations - tends not to change very much over time. Marketers are often charged with improving these numbers, usually through optimizations to a landing page. This often boils down to finding ways to make more people click a "buy" button.

The problem with this approach is the assumption that the behavior of users can be easily changed or manipulated toward the outcome we want them to complete. But the opposite is almost always the case: Whenever you try to change an existing behavior, you are preparing to enter a long, hard fight which you almost certainly will not win.

You Can't Change Behavior, But You Can Design for It

For e-commerce, this problem is neatly captured in the "buy" button. It is the main objective we have for every visitor we get to a page. Clicking that button is, unfortunately, also historically and behaviorally, the last thing customers are interested in doing.

"Buying" Is New, but Bartering Is Eternal

Trade is not new. It is one of the fundamental drivers of human progress throughout history, and has done more to shape the economic, political, and moral landscape of our world than any other activity in human existence.

So how did we get to a point where a force of nature has been reduced to an interaction which is, on average, 98.205 percent ineffective?

The answer comes down to understanding the difference between buying and purchasing, and how we express that in terms of an e-commerce purchase. Buying, at a discrete and fixed price, is a modern invention, and more an exception to the habits and behavior around commerce that has evolved over millennia. The department store itself - one of the institutions which caused the concept of fixed pricing to be widespread - has only existed for just more than 100 years. Rather, human behavior around commerce is geared toward negotiation and barter as the mechanism that facilitates purchasing. It is small wonder then, that most people, most of the time, do not make a purchase when visiting an e-commerce website. We are giving them a single, hard, and fast choice: buy now or leave instantly.

And given the option, we know what most people choose.

"Negotiate" Is the New "Buy Now" Button

Conversion rates - or at least the low numbers we tend to see for them - are a consequence of this dynamic. Constraining customers to the constraints of our own systems causes us to miss many opportunities.

The solution to this lies not in finding ways to modify human behavior, but in letting the systems we create more neatly reflect existing behaviors while influencing and encouraging the behaviors we want customers and users to exhibit.

It is in this context that we were recently lucky to have been introduced to a company that specializes in this type of service. And by making that change, we have seen the difference that introducing an automated negotiation mechanism to the e-commerce purchase process can make to customers and vendors.

conversion-rate-for-mobile-visitors
Image used with permission from http://www.gpcworks.com/blog

Change the Interaction to Reflect the Behavior (Don't Force People Into the Constraints of Your Product)

In the future, we expect, and will be excited to see, the evolution of interactions around e-commerce to more accurately reflect the nuances and preferences of human behavior. Ultimately, commerce and trade are ancient human traditions, and we should be aiming for much higher impact and return on behavior than the incremental improvements we are setting as the benchmark at the moment.

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ABOUT THE AUTHOR

Kristin Low

Kristin Low is founder of On-off Design & Technology, a strategic design and digital services company, based in Hong Kong. He has a background in user experience (UX) design, service design, and product management. Kristin founded the Design Thinking network in Hong Kong, which has over 500 members. He’s also an MC, mentor, and trainer, and hosts jams and hackathons. He’s passionate about blending human-centered insights with quantitative data to drive business growth and innovation.

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