Dear readers,
Thank you for coming here.
The “11.11” global shopping festive has passed. In China, Tmall clocked sales of nearly 500 Billion RMB and JD 272 Billion, both smashing 2019 numbers.
The festive has also internationalized. Both Lazada and Shopee declared record sales too.
The festive is characterized by its “incredible” promotions and subsidies. But we all know the sellers and the platforms are not losing money.
So in a way, our “buying spree” is their “killing spree”.
But we certainly do not feel robbed. Instead, we are happy.
How does it happen and why cannot we stop our “buying spree” during the “11.11” festival?
I think there are two key factors:
1.The feeling of “good deals”
It is important to offer “good deals”.
It is more important to make customers feel that they are getting “good deals”.
It is even more important to make customers feel that they are getting “good deals” because they are smart enough to beat the system.
2.Lowered barrier for transactions
When we shop, we just feel that everything goes smoothly and is helping us make the buying decision. Every detail is well thought of.
Truly great user experience.
Next, I will share a few “techniques” that I observe are being used to create the two key factors above.
1.Marketing that spares no effort
Every platform and even some sellers, like Xiaomi this year, conduct heavy marketing campaigns to highlight their “Billions” subsidy programs.
It is impossible to miss them!
And JD this year even held a Talk Show, inviting probably the most popular stars in China, specially for this festival.
All this marketing conveys a cannot-be-clearer message: “Come, we are giving out money. You will lose out if you don’t”.
And it also arouses people’s expectations. We are giving it to you. It is yours. The “hate-to-lose” mindset will make it harder for people not to come.
For most people, this is almost irresistible.
2.Time limit
This festival happens once a year. Even though major promotion events come almost monthly now, this is still the biggest and it ends a few days after “11.11”.
This further reinforces the “good deal” feelings with people. It also pushes people to act.
3.Pricing strategy
Inside the same store, not all merchandize serves the same purpose.
Some merchandize will be priced low to draw customers in. And then sellers will have the opportunity to make profits on the other merchandize once enough people visit and buy in the store.
This is widely used in super markets too.
4.Bundle sales
Merchandize can be bundled with accessories. For example, when we purchase a phone, we may need a charger or an earpiece (since when this became a problem…).
Merchandize can be bundled with consumables. When we purchase a shaver, we will need blades. When we purchase an electric toothbrush, we will need exchangeable brush heads as well as toothpaste.
Merchandize can be bundled with themselves too, e.g. a twin package or a package of 5 toothbrushes.
The bundles will cost less than if we buy them separately. The price of buying separately will serve as an anchoring point. This technique again creates the feelings of “good deals”.
What’s more, we can always tell ourselves that we will need them anyway.
This technique is also used in other forms of sales. The bike rental in East Coast Park is 40 dollars for one hour and 50 dollars for two hours. How can we not pick the two-hour bundle?
5.Voucher/discount after min spend
This might be the “killer” technique that pushes people to buy things they do not really need.
You have put staff worth 480 dollars in your shopping basket and then you see the voucher “50 off every 500 spent”. Anyone will just go look for staff worth 20 or 21 dollars and secure that 50 dollars discount, because that “savings” is so certain and so close.
And the platforms make it so easy. If you are buying toothbrush, maybe they will recommend mouthwash or floss.
For most people, not those super smart and calculative ones, this is like ad-hoc. This is usually after you have bought everything you want to buy. So people most likely just make even more casual decisions to secure the “good deals”.
6.Interest-free split payments
Another genius invention.
A high price is split into monthly or weekly or daily payments to look less expensive, so that people focus on the daily small amount and neglect the high total price.
Moreover, the small daily amount can be compared to another small daily spending, such as coffee, ice cream or meals, to make people mind the price even less.
For example, “It only takes the cost of a cup of coffee a day to own this phone and experience the latest technology” (made up by me, not real).
This is also widely used in insurance sales.
7.Promotions made attractive
To make promotions more attractive, use absolute amount for expensive items and use percentages for cheap ones.
For example, for a 5 dollar item, 20% discount sounds much better than 1 dollar discount, while for a 500 dollar item, 100 dollar discount sounds more attractive than a mere 20%.
8.Shipping included
People value “complete” solution.
“Shipping included” is valued because it provides the “complete” solution.
Just like in insurance, a product covering 100% of problem A is more attractive than a product covering 50% of problem A and B, even the cost of the two products are the same.
So, most sellers will include the shipping in their offering and of course the cost in their prices. (Come to think about it, this could be another form of bundling)
9.Return guarantee (usually 7 days)
Some sellers even cover the return shipping cost.
This significantly lowers the risk for the buyers and therefore significantly lowers the barrier of transactions. This also reinforces the feelings of “good deals”.
At the same time, typical sellers wont have to worry about too much returns.
Once people have the items, the items belong to them. Unless there are serious problems with the items, buyers normally will just keep them because they do not want to lose what they already have.
Not to mention that return logistics are usually quite slow, which means wait and extra troubles.
Every “good deal” you snatch could be preciously engineered by the strong teams on the selling side.
So how can we avoid it?
I do not know the answer, but I offer 2 pieces of advice.
- Buy only what you need: My wife needed a pair of sport shoes. And New Balance was offering “buy 2 get 1 free” where we only needed to pay for the 2 most expensive pairs. My wife was scouting around to make up 3 pairs. I told her to just take the pair she liked the most, because the other two pairs would just end up gathering dusts in the shoe cabinet.
- Get better with math: even the promotions are getting more complicated. A lot of buyers complained about the complex algorithms after the “11.11” sales. If you have to buy, at least get better with math.
In the end, let me use the joke I heard to conclude this post.
“Do you still remember your original goal for going online shopping? Mine was to save money.”
No comments:
Post a Comment