13 November 2017 - Two weeks today Black Friday 2017 will be past and Cyber Monday will be in full swing. It’s a retail period which means “Set the alarm clock early, we’re going shopping for bargains,” if you’re a consumer and, “Are we ready? Please don’t let our systems fall over. Have we got enough Hatchimals?’ if you’re a retailer.
Humour aside, the eCommerce opportunity is huge both in terms of sales and in trying new technology innovations to turn the clamour into cash. Black Friday is an established calendar date, but China’s equivalent, Singles Day, which happened last weekend, saw the the country’s consumers spend more in 13 hours on Alibaba than the national GDP of 106 sovereign nations. To put it in perspective, Alibaba reported revenue of $25.3 billion from Singles’ Day, a 40 percent increase from 2016 - and that’s before pre-Singles Day promotions are added. US sales by contrast, from Thanksgiving to Cyber Monday, made a total of just $12.8 billion last year.
Taggstar provides social proof product messaging to a list of leading eCommerce brands in online retail including Shop Direct, Argos, N Brown, JD Sports and Missguided , some of which gave us the mandate that social proof had to be live on their sites in time for Black Friday 2016 to see the maximum improvement in their online sales conversions. A long list more will see the effects during the 2017 Golden Quarters, with many other eTailers starting their promotions and flash sales earlier than Black Friday in a bid to beat the rush, and to capitalise on consumers who’re already in spending mode.
Shopping online on Black Friday is different to a regular browsing session because of the time and stock limits put on special offers. The frenzied nature of buying also amplifies some of our worst online habits such as changing our mind and returning unwanted gifts for friends and family, or buying our office party dress in three colours and different sizes before returning our least favourite. With the cost of fit or quality-related returns already an issue for eTailers, a spike in returns over the festive season is an unwanted gift for any business. That’s where the potential for using social proof messaging to improve the eCommerce experience from browsing to post-checkout, becomes interesting.
The messages harness the concept that as humans, however unconsciously, we follow the crowd by basing our behaviour on the actions of people similar to us. Because we know that people are influenced by their peers, social proof messaging takes real-time behavioural trends from the pack of other eCommerce shoppers, and displays those to other consumers.
Because we know that influence increases the more we have in common with our contemporaries, the buying trends of others tell us that we’re right to choose that item. In this way, social proof messages reinforce our decisions by showing real-time recommendations, ratings and sales from other buyers about the popularity and quality of every item, so that shoppers are more confident to click ‘Buy Now.’
Apply that to Singles Day, Black Friday, Cyber Monday and the whole Golden Quarter. It’s fast moving, offers have a limited lifespan, but also that it can be overwhelming, with shoppers flooded with choice. The same adrenaline-filled excitement that makes people spend is also problematic once it comes to making online shopping choices.
Taggstar applies social proof messaging to support retailers and consumers throughout with the full sales cycle. From browsing, to checkout, to helping to reduce returns by bringing fit or quality reviews to the surface, we’re helping to maintain margins, improve engagement, revenue and reduce basket. Abandonment. Here are five problems that eCommerce retailers have asked Taggstar to tackle with social proof:
1. Black Friday Cart Abandonment is High
It’s the scourge of eCommerce retailers everywhere, but cart abandonment rates actually rose over Black Friday and Cyber Monday 2016 to a whopping 68% - and 78% on mobile.
We know there’s a mix of factors at play including non-mobile optimised pages, consumers that use the basket as a calculator to pick and sort their shopping and frustration with fiddly webforms, but there’s also a high proportion who, plain and simple, change their minds. The story behind the statistic is our fear of making the wrong choice (alongside the annoyance of last minute hidden costs). We’d rather abandon our sale altogether, rather than risk choosing the wrong thing.
Before we reach abandonment, there’s a pattern of shopper indecision. It’s usual for customers to visit a page several times, prolonging the window between research and sale. Online product choice can be overwhelming. Even the most self-controlled shopper, who thinks they know what they’re looking for, can be thrown off course once they’re inundated with choices.
We find that when customers have seen social proof messages when selecting their cart, abandonment rates are lower and final checkout totals are higher. Social proof messages are used to influence the sale by giving customers maximum product information, helping them to distinguish between the huge catalogue of choices available.
Depending on what you’re selling different messaging may techniques work. For on-trend fashion item, messages about the quantity left in stock, or how many people have bought it in the last hour are proven to boost consumer confidence. Or if you’re selling a practical four-slice toaster, use reviews and ratings as an effective way to nudge consumers to complete the sale.
We also effectively apply it to stress urgency when inventory levels are shown. This reduces procrastination as consumers recognise that they need to make a decision, or potentially lose the item - which is absolutely what will happen in the case of limited Black Friday promotions.
2. Big Ticket Items Aren’t Moving
It might be holiday season, but consumers are still very careful with their cash, with year-on-year growth in the quantity bought for retail sales at 0.9%. That’s the lowest growth on the year since April 2013 (UK Office of National Statistics, May 2017).
This is unhelpful to retailers with specialist Xmas stock to sell, and the more expensive the item, the longer the decision time, and sadly, the longer the decision time, the more likely the customer is to abandon. However, it is Christmas and shoppers don’t want to be cheap. They want quality over quantity, which is why it’s important to give consumers maximum information and incentive to buy when they’re on-site to help influence the sale.
Social proof messaging is designed to give the consumer as much product detail as possible. It markets big ticket items effectively, gives customers more reasons about why they’re right to choose the big ticket item, and why the quality and the price is right. We do this by using third party rating and review data like ‘51 people give this item 4 stars,’ to give shoppers the extra on-site support and third party reassurance they need to justify buying a major item.
3. You’re Competing for Attention (understatement of the year klaxon)!
A 2016 study shows that our online behaviour has changed. A joint paper called "The Empirical Economics of Online Attention" (University of California, Harvard Business School and Indiana University, 2016), said that we devote more or less the same time to online activity each week, but if something new comes along, we don’t extend our online time, but we shift our attention to the new site at the expense of old sites.
So where a consumer might go to their favourite websites to begin a session, a social media promotion or remarketing ad banner might turn their head and loyalty goes out of the window. On Black Friday and Cyber Monday this happens a hundred-fold as eCommerce sites are dangling every carrot on a stick that they can in front of consumers.
In these short windows of attention, social proof messaging gives e-tailers the ability to deliver product information directly to customers to engage them before they jump offline.
It’s very important that the messages are customer-focused, which is why we test hundreds of message combinations to understand what works best for a retailer to reduce buy time and to increase overall conversions.
4. Post-Christmas Returns are Killing Your Margins
We’ve all done it. Smiled sweetly and said thank you as we unwrap a hideous dress from our nearest and dearest, only to be first in line at the post office to send it back in the new year. Or, when the boot is on the other foot, we’ve all bought a gift only to get a text to ask if we’ve still got the receipt a few days later.
Fit-related and quality-related returns cost retailers millions to retailers every year. Figures for UK shoppers alone found that the average online shopper has unwanted but unreturned goods worth £66 at home at any given time, amounting to £3.2bn for all UK shoppers (source: Retail logistics firm Stuart, 2017).
New reports show that there are plans afoot to make it easier for online shoppers to return goods instore (source: Daily Telegraph, 5 Nov 2017), but returning anything is an anticlimax for everyone when you have to return a gift given with good intentions.
Taggstar uses social proof product messaging through partnerships with software provider like BazaarVoice, to reduce returns at source. We display powerful credible, crowd-sourced information like quality reviews, fit reviews, ratings and purchase history to help the purchaser who is wavering to decide if it’s right for their intended in terms of fit, colour and quality.
5. You’ve Got Long tail Stock to Sell Too
We know that selling must-have holiday gifts while they’re in the news or fall out of favour is important to your results. We also know that there’s another 363 days that aren’t Black Friday and Cyber Monday where you need to sell your wider product catalogue rather than be forced to discount.
We work with retailers who attach social proof messaging to everyday items like light bulbs, vacuum cleaners, dining tables and suitcases. Some tag everything, using social proof to increase their chance of conversion, whereas we equally work with retailers’ marketing teams to tag, merchandise and promote a specific item, category or campaign because of a business or seasonal need.
What happens next?
On Black Friday 2016, Taggstar tracked conversion rate uplifts of up to 3.75%. Even in ‘normal’ online shopping conditions the brands we work with see an average increase of 2.7% in their sales conversions when our messages are shown (in A/B tests against product pages that don’t display the information). We don’t need to asterisk or footnote that. We can statistically-prove it.
Find out more how Taggstar could support your eCommerce business during Black Friday and beyond, and ask about our free trial. Contact us here.