BBI of Chicago
The influence of scarcity mental trigger on e-commerce purchasing behavior
By: Priscilla Maciel Borges Ribeiro.
This paper aims to present the mental trigger of scarcity and show that knowledge and application of it can influence customer decision-making during the purchase process in online stores.
According to Daniel Kahneman, our brain has two mental systems that work together: system 1 and 2.
System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control. System 2 allocates attention to the laborious mental activities that require it, including complex calculations. System 2 operations are often associated with the subjective experience of activity, choice, and concentration. (KAHNEMAN, 2011, p. 29).
Kahneman suggests that consumers are irrational, and external factors influence them to make decisions, whether those decisions are good or bad. Some factors influence buying behavior, and the scarcity factor is one. The Perspective Theory or Prospect Theory, created in 1979 by Kahneman and Amos Tversky, states that human beings feel more loss than gain, for an irrational reason; which causes them to make hasty decisions and influence decision-making when buying digitally.
A study conducted at the University of Nebraska by DigitalCommons found that retail stores can produce psychological effects by utilizing perceived scarcity. By encouraging people to act quickly, you introduce perceived scarcity by creating a lack of product or time (FERREIRA, 2015). The author points out some strategies: sales and offers with limited time, free shipping for a limited time, an indication of limited stock number, among others. Another way is to add a discount on selected pieces for a limited time. E-commerce needs to understand how to use these strategies in a way that the customer does not feel pressured and regrets the purchase. Therefore, it is recommended to explain why that offer is being offered. Practical example: due to Mother's Day, we will offer a 20% discount on all purchases made this Sunday until 14:00. As such, there is a basis in the discount offered – the Mother's Day date is why the price is lower.
Still using the above example, the person feels encouraged to buy even if that purchase is not advantageous for them. That is because of the limited offer time (until 2:00 pm) and the attractive 20% discount on a special celebration Sunday. These factors encourage decision-making and induce the customer to buy because they understand that the offer is running out, making them feel that they will lose out if they don't buy it now. Combining mental triggers like the scarcity trigger and the social proof trigger, for example, is a very used and effective technique, as recommended by Tessman, 2016. The social proof mental trigger, popularly known as word of mouth, tricks our brains to carry out certain actions based on collective action. Examples of social proof applied in e-commerces: comments, recommendations, and ratings from other consumers, etc. (RIBEIRO, 2019).
Understanding that the human brain is under external influence allows us to develop strategies to facilitate and influence the entire purchasing process. Therefore, the suggestion is to go deeper into consumer behavior, apply the techniques mentioned here, measure the results, and adjust according to your target audience and demand to stimulate customer decision-making and increase conversion in e-commerce.
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