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The Psychology of Free Shipping

https://medium.com/swlh/the-psychology-of-free-shipping-9746819b0e22

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The Psychology of Free Shipping
The psychology of free shipping, the decoy effect and framing can change your customer's behaviour

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Free Shipping: Shopper Psychology

Free Shipping: Shopper Psychology

A study done on online shopping behaviour showed that 70 percent of the shoppers abandon their shopping basket, leaving the app/website. The main reason for this behaviour is the unexpected costs, especially the shipping fee, which many buyers see as a sunk cost.**

Free shipping, something expected by many customers during online purchasing, works even if the cost is added to the product, due to a psychological trait of shoppers, who are made to feel as if they have got something extra.

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The Framing Effect Of Costs

Framing is a bias-inducing technique that seems to tilt buyer preferences by providing the same information in different ways. It makes people see the same data in such a way that it affects their choices.

Example: A $10 watch with $5 shipping charges may be a turn-off for buyers, but the same watch costing $15 with zero shipping charges, and FREE SHIPPING clearly labelled in bold, makes more people buy it, even though they are paying the same amount of money for the same watch.

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The Decoy Effect

Often an extra choice is given to the buyer (looking at a set of options) to tilt the purchase in favour of a particular option. The decoy option is only there to shift the mindset, and is also called the asymmetrically dominated option.

The decoy effect changes the perception of the offer in the eyes of the buyer.

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The Subscription Choice Experiment

The famous Economist subscription study showed the following set of options:

  • Option A: Online subscription Only, $59
  • Option B: Print subscription Only, $125
  • Option C: Online and Print, $125
    Subscribers were selecting Option C a whopping 84 percent of the time, due to the dominated option B (the decoy), which cost the same as option C but offered less. With Option B removed, Option C was selected just 32 percent of the time.

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SIMILAR ARTICLES & IDEAS:

The decoy effect

The decoy effect

It happens when consumers change their preference between two options when presented with a third option, or decoy.

The decoy is priced to make one of the other options much more attra...

How decoys work

When consumers are faced with many alternatives, they often experience choice overload that increases anxiety and hinders decision-making.

Consumers try to reduce this anxiety by selecting only a couple of criteria (say price and quantity) to determine the best value for money.

A decoy steers you in a particular direction while giving you the impression that you are making a rational, informed choice.

Decoy example in the market

Consider the price of drinks at a well-known juice bar: a small (350 ml) size costs $6.10; the medium (450 ml) $7.10; and the large (610 ml) $7.50. The medium is a slightly better value than the small, and the large better still. The medium is designed to be the decoy, steering you to see the biggest drink as the best value for money.

If you buy the biggest, was it because you made a sensible choice, or have you been manipulated to opt for bigger than intended?

Brand name products

You don’t have to spend money on the big brand names.

Your local grocery or drug store might have a store brand or sell a generic version. In most cases, the ingredients are pretty muc...

Basic car maintenance

You do not need a professional mechanic to sort out many of the simpler car problems.

There are all sorts of easy and helpful instruction videos available to repair or maintain your car for cheap.

Shopping when you’re hungry

We are more susceptible to buying stuff we don’t need when we are hungry. The same goes for a leisurely grocery trip. 

Make your shopping trip when you have other errands to do and a limited time to do them. You will be less likely to spend time exploring and picking up items that you did not originally plan to purchase.

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The Psychology Of Color: Research Findings

The Psychology Of Color: Research Findings
  • Up to 90% of snap judgments made about products can be based on color alone (depending on the product).
  • Colors influence how consumers view the "personality" of the brand in question.

The Psychology Of Color - Misconceptions

Elements such as personal preference, experiences, upbringing, cultural differences, context, etc., often muddy the effect individual colors have on us. So assertions on the effect of colors are often not based on scientifically sound evidence.