Are consumers purchasing products or services from your website?
I'm often asked by my digitally savvy e-commerce clients year-over-year growth rates in e-commerce.
According to research conducted by HBR, global e-commerce sales exceeded $2 trillion in 2017, and are on pace to more than double by 2021. Yet, average online conversion rates have remained doggedly low. Fewer than 4% (this is an interesting metric; if you measure, you should measure this) of consumers arriving from desktop browsers buy, and the number is lower still for tablet and smartphone users (3% and 1%, respectively). These are a far cry from offline retail conversion rates, estimated to be 20%–40%.
Empirically, we know that trust is essential. When trust is high, people will be inclined to take risks. In traditional bricks-n-mortar trust can be easier to navigate. It is P2P or person-to-person. Online is purely a digital experience and largely faceless.
Historically, online sellers attempt to mitigate risk for buyers through strong encryption and security, privacy policies, and return guarantees.
Recent research has asked the question—"could it be that online shoppers actually commit very little explicit cognitive effort when making the decision about whether to trust a website?"
Steven Sloman, a cognitive psychologist weighs in. It is Sloman's belief that people "parallel process." Stay with me here…One system of reasoning is deliberative, rooted in symbolic structures, rules, and established patterns of logic (think algebra). The other system is associative: diffuse, approximate, and non-deliberative, based more on personal experience and intuition than on formal rules.
Regression analysis in a controlled group yielded the following results. When making decisions involving risk, such as an online purchase from a website, consumers tend to rely more on intuition than on deliberation. This is important because it challenges the established deliberative perspectives of consumer trust formation and offers an explanation as to why things like aesthetics, professionalism, and other implicit clues matter for building online trust.
Your digital strategy: Understanding that online consumers do not always engage deliberative processes, but often rely on intuition — especially when making higher-risk decisions — has profound implications for redesigning online consumer experiences. “Simple” changes (such as page layouts and choices of fonts, images, and colors) may be far more critical to associative trust-formation processes than we previously understood. Our findings suggest that what seem like merely aesthetic design choices may actually be the way your customers learn to trust you (or don’t). And that will influence whether they decide to make a purchase.