9 Ways Online Retailers Get You to Spend More Money
Each year, more and more consumers turn to online shopping. It is estimated that within the next few years, over 2 billion people worldwide will purchase goods or services online annually. And according to a 2016 Pew Research survey, 79 percent of Americans currently shop online, up from 22 percent in 2000.
Brick-and-mortar retailers are very strategic in the tactics they use to get customers to part with their money. As consumers, we aren’t always aware of those strategies, but we succumb to them daily. (Have you ever bought a candy bar in the checkout line?)
It is the same with online shopping. Although the methods are different, they are equally effective. And taking note of them will take you from unsuspecting consumer to being an aware one.
Here are nine strategies online retailers use to get you to spend more money:
- Free Shipping: As convenient as online shopping is, it does come with a few drawbacks—one of them being that you have to pay to have your items shipped to you.
Online retailers counter this inconvenience with offers of free shipping (or flat shipping rates). But those offers usually come with a caveat—you must spend a minimum amount of money.
This strategy is incredibly profitable for retailers, as most consumers will increase their spending on merchandise just to avoid paying for shipping.
- Convenient Checkout: Another inconvenience of online shopping is having to enter your payment and shipping details when checking out.
Companies leverage this annoyance to their advantage by saving your information and offering you the ability to checkout quickly. Many websites even offer “express checkout” where you can pay in seconds with only one or two clicks—making shopping from any device a breeze.
When consumers associate a retailer's checkout experience as fast, easy, and convenient, they are more likely to purchase from that company—and buy more often.
- Welcome Discounts: The first time you pop onto a retailer's website, you are often greeted with an offer or discount—usually a percentage off your first purchase.
This tactic not only is an incentive to buy, but it also encourages you to spend more money since you’re shopping with a discount.
Additionally, by providing your email in exchange for the discount, you will be targeted by the retailer’s future marketing efforts.
- Recommended Items: Many retailers employ strategies to get you to purchase additional products related to what you are currently buying or have bought in the past.
They accomplish this in a variety of ways including suggesting items that “go well with” what you’re purchasing, showing you similar products, presenting add-on items that complement what you’re buying, or by showing you what other customers who have browsed the same products ultimately purchase.
Furthermore, some retailers tailor your view of their website to include items related to your previous browsing history. This technique of upselling results in more profitable transactions.
- Free Returns: Retailers that offer free returns aren’t being generous; they are being strategic. Online shoppers are at a bit of a disadvantage—they don’t have the luxury of seeing, touching, holding, or trying on items. And as a result, online consumers take a risk with every purchase they make.
Retailers attempt to remove that risk by offering free returns or the ability to return to a company’s brick-and-mortar stores. Shoppers are more likely to make a purchase—even if they are unsure of an item or want to compare multiple products—if they know they can return at no cost to them.
Many retailers reduce the hassle of returning by including prepaid and pre-printed shipping labels leaving nothing for the consumer to do than pack up and drop off their return at the nearest post office or delivery company.
A convenient return policy can also sway those shoppers who would otherwise skip buying online.
- Discounts Based on Amount of Purchase: Everyone loves getting coupons and discounts from their favorite stores. But they often come with a catch—the discount is only offered if you spend above a specific dollar amount. And in many cases, the more you spend, the greater the percentage off you receive.
Like free shipping, this tactic gets consumers to shell out more money than they initially intended to—just to meet the threshold for the discount.
- Loyalty or Membership Programs: Many retailers offer “insider” or loyalty programs to their customers. Benefits can include free shipping on all orders, early notification of sales, exclusive product, special discounts, and rewards for making purchases.
These perks promote brand loyalty and, of course, tempt shoppers to spend. In some cases, the programs themselves bring in revenue if consumers are charged a fee to participate.
- Emails: Once you opt-in to a retailer's emails (usually by accepting their welcome discount), you become a part of a very effective marketing strategy. Companies use emails to market their products to you consistently and to raise your awareness of their brand.
From reminding you that you left items in your shopping cart to offering special discounts and coupons to alerting you of new merchandise, each email you receive is an invitation to spend more of your money.
Many retailers tailor their correspondence to you based on your shopping preferences, what you clicked on in previous emails, and even whether or not you opened past emails. This invasion of your inbox provides numerous opportunities for retailers to entice you to spend.
- Targeted Ads: Have you ever noticed that after you search for a specific item, you suddenly see ads for that exact item anytime you browse the internet? It seems to follow you wherever you go, just begging you to take another look and, of course, buy.
It’s not a coincidence. Retailers target you with ads based on your browsing, as they know the reminder has a chance of resulting in a purchase.
Be a Wise Consumer
Naturally, retailers are in the business of profit and are strategic in going about it. As a consumer, it is to your benefit to be aware of the multiple strategies used on you so you can be intentional and wise in your spending.