Has your finger ever been hovering over a ‘buy now’ button when a message popped up saying ‘only two left at this price’? Maybe you’d been thinking you could get a better deal elsewhere but then worried you might miss this offer if you didn’t snap it up?
You’re not alone. This technique, known as nudging, is a mainstay of the online retail world and is just one of a myriad of psychological and behavioural tools employed to get consumers to spend as much as possible as quickly as possible.
Other tactics used to separate consumers from their cash include displaying time-dependent discounts, suggesting products based on prior purchases, unlocking free shipping at certain spend points and enabling friction-free one-click checkouts.
Figuring out just how and why consumers decided to buy one thing over another is as much of an art as a science, but there is a growing trend for retailers to leave as little of the process to chance as they can.
In a new documentary streaming on Netflix Buy Now: The Shopping Conspiracy, Maren Costa, former principal user experience designer at Amazon, says that all aspects of the buying process on that site are carefully studied. “You’re being 100% played, and it’s a science,” she says.
Costa worked with Amazon for 15 years, helping the company test various ways of structuring web pages to see what was most effective in getting consumers to buy.
“The system was being built and optimised to help you buy everything you would ever need and more of it than you ever thought you needed,” she says.
Today, Costa campaigns against climate change and to raise awareness of the importance of ethical AI. But back when she worked for Amazon, she says marketers used testing and data to determine everything down to which colours on the ‘click to buy’ and ‘free shipping’ buttons would make the most money.
“It’s a science, an intentional, complex, highly refined science to get you to buy stuff. It’s not just Amazon, most of the big corporations are doing it, and every trick in the book is being used to hide what’s really going on.”
Everyone knows that a big discount serves as a powerful incentive to buy and there is no bigger discount event than Black Friday.
Originally an American tradition marking the start of the Christmas retail season, it occurs on the first Friday following Thanksgiving.
In recent years, it has expanded internationally to become a global orgy of consumer spending
The ‘black’ part of the name comes from the way it tends to move retailers’ balance sheets from being ‘in the red’ to ‘in the black’.
In the UK, it’s increasingly observed by major online and offline retailers and it’s not hard to see why.
An Ofcom report this week found 88% (41.5m) of UK online adults visited Amazon in May 2024, consistent with the same period in the previous two years (May 2022, 88%, and May 2023, 87%).
It was the third most visited website in Northern Ireland, behind Google’s parent company Alphabet and Meta, which owns platforms such as Facebook, Instagram and WhatsApp.
Marketeers have long known that human behaviour is complex and people often aren’t fully aware of just why they make the decisions they do. The British advertising executive, Rory Sutherland, is vice-chairman of the Ogilvy & Mather group of companies and has gone viral several times in recent months on TikTok discussing how behavioural economics can influence buying decisions.
In his book Alchemy, he refers to the “$300m button” — a change to a US retailer’s online checkout process that increased annual turnover by that amount thanks to a 45% rise in the number of shoppers completing transactions.
Initially, they had been asked to register and provide personal details. One shopper told researchers: “I’m not here to enter into a relationship. I just want to buy something.” Others feared their data would be used for nefarious purposes.
By adding the option to “continue as guest”, the retailer — believed to be Best Buy — made it that much easier for shoppers to commit. And some 90% of users who did this would subsequently choose to register anyway when told that doing so would speed up their next process.
“Typing your address in order to confirm where your new washing machine should be delivered feels like a good use of your time; performing the same task when all you seem to be doing is adding your details to a customer database feels like a waste of your time,” Sutherland writes.
“The same thing in a different context can be pleasant or annoying.”
There are many other examples. In consumer electronics, a classic technique employed by many companies is the ‘good, better, best’ technique, which leverages what’s known as the Goldilocks principle.
What this means is that when consumers are presented with a choice between three options, they will often choose the middle one as a compromise between quality and cost.
Using this principle, companies can subtly encourage shoppers to spend more than they were planning to. Take Apple’s iPad.
This is offered in three versions: the entry-level iPad costs £329, a mid-level iPad Air starts at £599 and an iPad Pro starts at £999.
While a certain number of people will always opt for the most expensive option, and a certain number for the no-frills entry level model, the existence of both serves to encourage more people to buy the middle option than otherwise would.
The existence of the higher priced iPad Pro makes the mid and entry-level devices seems significantly cheaper. The end result is higher overall sales for Apple, and it’s no coincidence that it’s one of the most profitable companies in the world.
Seán Higgins, managing director of Future Proof Insights, says: “Shopping of all kinds, including online, is rewarding at a deep evolutionary level. When you buy products, you experience a reward. The process triggers a dopamine reaction that reinforces future decision-making and that’s why a lot of our shopping lists are so habitual, because we experience these rewards.
“It can seem that a lot of the techniques discussed [in the Netflix documentary] are manipulative in nature, and while it is true that there are underlying mechanisms driving us, and these companies are looking to play into these, I think the effects are a little bit overstated.”
Higgins makes the point that a lot of the measures employed by the online retail giants are only really effective at scale and aren’t aimed at the individual shopper.
Corporations such as Amazon deal with such large volumes of transactions that even little changes can turn into big effects. But this isn’t necessarily about manipulating the individual.
“If you think about the volume of traffic that Amazon is dealing with, what they’re looking for are incremental gains at scale. They’re not looking to manipulate the individual, they’re looking to impact the market, but it’s not a perfect science,” Higgins says.
“For example, in the documentary, they discuss testing nine different coloured fonts for a particular on-screen button.
“Amazon is big enough that it can test that at scale, and look at the statistics on how people respond.
“But discovering that one colour or another works better on average doesn’t guarantee that it will work on any given individual shopper. To know that, you’d need to run truly huge studies controlling for endless variables to make it an actual scientific finding.”
Future Proof Insights is an Irish consumer neuroscience research agency that specialises in combining consumer research with neuroscience to provide scientific explanations for how consumers make decisions and how this affects their actual behaviour.
“We measure and test things like this all the time on behalf of our clients and I can tell you that the idea that just anyone can be manipulated into doing what you want them to is quite overstated. These companies do their best to reduce friction and make it as easy as possible to complete a transaction, but they can’t make anyone buy anything they don’t want to buy,” Higgins says.
“People are fascinated by these sorts of techniques though, because they tell us something about ourselves that isn’t always obvious. We make the decisions we do for lots and lots of reasons.”
While many of these online retail techniques are quite legal and ethical, not every Black Friday offer is quite what it might seem.
If a big screen TV is offered for, say, £1,000, with a ‘Black Friday’ discount of £1,000, it implies it’s been discounted from £2,000.
But how long was it on sale for £2,000, and how long ago? Is it an obsolete model from a year or two back? Is the price being referenced off that, rather than a day or two before the sale? Buyer beware.
Consumer watchdog groups encourage buyers to compare historic prices before making purchases where there are discounts that seem too good to be true. In particular, they encourage shoppers to check the exact make and model of whatever they’re thinking of buying to see what other retailers are selling it for and what it’s available for online.
In the UK, the consumer magazine Which? found that 92% of Black Friday ‘deals’ in 2023 were cheaper or the same price at other times of the year. It found that in six out of 10 deals, the higher price had been in place less than half the time the product was available in the year before the promotion, suggesting it was common for the product to be discounted.
The magazine also found 14 ‘deals’ where the higher price had not been charged once at that retailer in the previous 12 months.
“When looking to make a purchase, it’s worth comparing the price at multiple retailers,” said Which? editor Harry Rose. “That way you’ll know a good deal when you see one,” he said.
Sarah Johnson, director of merchandise consultancy Flourish Retail, warned consumers against such antics earlier this week.
“It’s only a deal if it’s something you genuinely wanted or needed before seeing the discount,” she told the BBC.
She recommends making a list and budget to stick to in order to avoid impulse buys.
“Make the deals work for you by using Black Friday to save on products you already planned to buy,” she said.
“If you stick to your list and stay within your budget, you’ll maximise your savings without unnecessary splurges.