In the previous article "Evolution of Commerce, Part I" we walked through the most significant and driving events in the history of human trade evolution. People have come a long way started from merely exchanging things to money itself. Also, for the vast opportunities for sales and purchases around the world, we owe to the long-term development towards globalization. Thanks to all that, we can analyze people's behaviour, their real motivities and even predict which actions may work in favour of e-commerce and which may not.
Historical facts about behaviour and development show that our ancestors and we have much in common than may seem at first glance. All the differences are caused by different conditions. We know that if a human child from birth gets into the wild and grows up there, it won't be able to socialize as we do. Such humans will be identical to those who lived ten thousand years ago.
Nowadays, we can explore historical examples to draw parallels now. On MageCONF'19 in Kyiv Stephen Hill showed us what worked for people in the past and what behaves similarly for the present. Based on this information, we can learn how and what to do for the desired result in e-commerce.
If we look at scarcity in terms of evolution, it always means the theme of resources. If something becomes more difficult to obtain, its significance grows. It means not everyone will be able to get that and the competition begins. Before, there were fights for water, food, places to live. No matter what thing, if it becomes scarce - it immediately becomes incredibly valuable.
A bright example of scarcity in our time is the typical madness during Black Friday or Cyber Monday. The crowd floods the shops and disassembles the goods at best prices until it's taken away by someone else. The same thing is with online stores, and unfortunately, some of them brakes under the load of customers. Usually, such scarce isn't real but fictitious conditions due to which stores reach a high level of sales.
Not only profitable offers can be limited but also the product itself. There is an artificial or real limitation of the product. It can be explained, for example, by the complexity of production. Thus, manufacturers are trying to prove the uniqueness of the product and justify the high price for it. Due to the rarity of the product, people are prone to buy it despite the inflated price.
Everything that used to be about urgency was most likely related straightforwardly to survival. It was urgent to run away from the predator, hide from the storm or have time to make a shelter before the cold came.
Nowadays, businesses and online stores use a tendency to urgency, and it works like a charm. To miss something is always unpleasant and feels terrible. For example, if the Happy Hours in the bar lasts till nine o’clock, then visitors think it'll be better to get there at eight. No one wants to pay twice the price if possible.
In online stores, there're various popups showing information about:
- low stock, last size available or count down timers to make an order.
Also sometimes customers can see the phrase that:
- product is in someone's cart, only two sizes left, someone else in your town bought this etc.
Such popups can often be found while booking online:
- In the last ten days, the price of this place has doubled.
- Ten people are looking at this place, and three of them are looking at the same dates as you.
- Two other people are looking at this hotel right now, and there's only one room left at this price.
- There are only two seats left at this price.
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Also such emphasis as "Hurry!", "Don't wait!" or "Don't lose your chance!" etc., are used to make an urgency effect. We hate and are afraid to miss out on stuff because there can be something valuable or unique. Fear is a compelling motivator that encourages us to act radically and quickly.
Social proof is a collective opinion about something. It works all the time, both ten thousand years ago and now. Previously, if ones went with the herd or masses, this tactic was considered for survival. If everyone chose the path to the East, then in the crowd were those who already knew the places, and everyone followed the leaders. Human ten thousand years ago felt:
"If others do that, then this behaviour should work for me too".
"If others drink water in this reservoir, it's most likely safe to drink it".
Humans learn from the example of others, and it's natural. Our brain analyzes that if it's safe for someone and we see confirmation, then it's safe for everyone. It's certainly not always a true statement but in most cases, works.
Today, the tendency to trust the majority can be used for goods demand in business while the speech that Stephen Hill gave was a very successful example of creating artificial demand. If two restaurants or clubs that are located next to each other are open at the same time and only one of them is filled with people, then it's clear which one people outside choose to go to.
A straightforward way to make the visibility of social proof, in this case, is to divide the entrance corridor into two parts. If the queue to get inside will stretch to the street, then others will certainly pay attention. Moreover, they'll wonder if these people are so eager to go inside, then it's also worth trying.
In e-commerce, we can see social proof in the form of likes, comments or shares. The number and quality of reactions to a product determine the level of its value. Reviews of the product are of great importance, the more people buy and share their impressions, the better chances of increasing sales in the future this product or service have.
It isn't even necessary that the product has "5 stars" in answers. The main thing is honest reactions and feedback because different characteristics of goods are essential to different customers. For some, color is necessary, for others, material, convenience or power etc.
Amazon was perhaps the first to come up with a reaction to the reaction function. The brilliant idea is to ask people if it's a useful review or not. The fact is, people like to be "experts" and express their opinions on the Internet. Thanks to various opportunities to share their experience and teach, everyone will find the most pleasant way to do it and will have the chance to be part of the discussion.
Social proof is so necessary today that we can witness a bunch of photos that people upload to show their goods, how they wear them and use them. In this way, they become not just buyers but loyal regular customers and fans of brands. It's now possible to build a whole culture around the product, and it's worth taking advantage of.
A long time, stories were the only way to let history live. The words and drawings were carved on stones, then on boards or leather sheets. Grownups retold myths and fairy tales to their children. It's what united the tribes and helped to raise the cultures.
Today we have a TV industry and can see how successful storytelling works to get people interested in. If you take a look at the different talent competition shows we can see there 15 minutes back story about the contestant and only a few minutes of the performance itself. In this way we're forced to learn more about the person, to empathize, to support and to vote. We are drawn into the history and want to look further and further because we want to see the end of the story of the show.
Another example was about something about ten years ago was a project called The Significant Objects. On the site, they resold items from garage sales and second-hand items. They took any things cheaply and posted them at a higher price on eBay. A feature of their scheme was well-thought-out texts created by professional storytellers and copywriters. In stories, the item participated in some historical or exciting events, had extraordinary power or attracted luck. However, even with the note that these stories are fictional, people bought things because they were fascinated by history, wanted to have a part of it.
Another excellent example of using history for a brand in today's world is the Panagony company. Thanks to the exciting and inspiring story of the company's founder, people want to buy things. They want to be a part of his worldview, principles, beliefs and attitude on caring for the environment.
So, when doing online business and its development, it is not enough to change the color of the button or rearrange the categories in the menu. It's necessary to study and understand the basic motivators of customer behavior. Their purchases can be planned or spontaneous, wholesale or retail, frequent or not, but there's always an explanation for such behavior. It can be understood only through the analysis of human behavior. Let's be clever!