Last Updated on January 8, 2024 by Tanvi
The human mind works in mysterious ways, especially for eCommerce consumers. For every purchase people make, there is a reason for it. Human beings crave individuality and recognition which feels lacking in online stores. But one way eCommerce is unlocking these desires for consumers is through personalization.
In 2018, a study by Epsilon found that when brands personalize the shopping experience, consumers are 80% more likely to make a purchase. This just shows how personalization is becoming an important feature for online shoppers.
So how can ecommerce take advantage of the psychology behind personalization and consumer perception? In this article, I will highlight the psychological aspect of personalization and why consumers love it. Also, I will highlight how you can implement personalization for your online stores.
6 Psychological Ways Personalization Affects Consumer Perception
There are many different ways that psychology is implemented in changing consumer behavior. Even color psychology is used to influence customer decisions.
So first, let’s try to understand the psychology behind personalization and consumer perception. Here are X psychological reasons personalization influences consumer perception:
- Sense Of Control
- Cocktail Party Effect On Consumers
- Impulse Buying With Increased Browsing Time
- Anticipation And Dopamine Effect While Shopping Online
- Getting Loyal Customers With Personalization
- Easing Stress Through Personalization
Sense Of Control
As I mentioned before, humans crave recognition. This can be difficult to do for businesses that run an online store. But personalization can help unlock this recognition factor by giving consumers a sense of control over their purchases.
A simple personalization like product recommendations on your product page can do this. It does not directly give consumers control but just the sense of it is enough to make consumers have a positive perception. When customers have a positive engagement with your online store, they are more likely to buy your products.
Cocktail Party Effect On Consumers
If you were ever at a party and suddenly heard your name being called out in the crowd, you are more likely to single that out over all the other noise. This is known as the cocktail party effect. The psychology behind it is that you are more likely to notice something when the stimulus stands out for you.
So how does this relate to personalization and consumer? If your ecommerce shop can catch consumers’ attention, they are more likely to buy the product. Thanks to different personalization strategies like customized emails with customer names, this is possible. Consumers feel a more personal connection when their name is mentioned. Creating such a connection can lead to that particular customer becoming a repeat customer.
Impulse Buying With Increased Browsing Time
A study published on ScienceDirect explored the relationship between online customers’ shopping experience and impulsive buying. Customers show self-control when buying products online. But the research goes further, showing an increased likelihood of customers making purchases as they spend more time on your online store.
Think of brick-and-mortar stores with store clerks assisting customers. These clerks can make suggestions and show customers unique products that they might have otherwise missed. Customers spend more time browsing more products which increases the chances of an impulse purchase.
The same concept can be applied to online shopping with personalization. With the right personalization, you can increase browsing time for your customers. Increased browsing time will psychologically affect customers and influence them to complete purchases.
Anticipation And Dopamine Effect While Shopping Online
We talked about impulse buying by customers but why do people make them? Well, the reason is the dopamine effect while shopping. Dopamine is a chemical that is produced by the brain as you feel pleasure doing something such as shopping.
In an article published by Psychology Today, they explored how dopamine is released not when purchasing online but in the build-up to the purchase. The key psychological factor here is building up that anticipation. That is why increased browsing time increases the chances of customers making a purchase.
On your store page, you can build up anticipation by keeping customers engaged. For example, you can personalize the experience through a live chat feature on your product page. Here, your customers can talk to someone about the product. This helps build up the anticipation as they stay engaged with your online store. As a result, the anticipation and dopamine effect will slowly change customer perception. This helps increase the chances of customers completing their purchases.
Getting Loyal Customers With Personalization
When a customer has a good experience at an online store, they are more likely to become a repeat customer. A Gallup study showcases this where it said that creating an emotional connection with customers increased sales by 85%. The increased sales usually come from the repeat customers.
So how does this all connect to personalization and consumer perception? A good customer experience can be achieved through personalization. This is because personalization helps connect directly with customers.
Take post-purchase services like sending a personalized email to customers as an example. The email can be as simple as asking for feedback or letting the customer know about the delivery progress so far. It increases customer engagement and leaves a good impression on your store.
Positive interactions like these can make customers feel special and create a positive consumer perception. This leads to loyal customers who might leave a positive review for your store or refer others to your store.
Easing Stress Through Personalization
Gifts are great people are receiving them. But it can be a nightmare to buy for someone. YouGov surveyed buying gifts for Christmas in the UK. They found that 46% of British adults are stressed when buying gifts for Christmas.
So how does that connect to the psychology behind personalization and consumer perception? Personalization can make buying gifts a lot easier. For example, let’s say your online store uses a product personalizer that lets customers design the product they want to buy as a gift. The customer can design the product with the person’s name to make a personalized gift.
Personalization like this can help ease customers’ stress when buying gifts. In return, you get a happy customer whose pain point you have resolved with the help of personalization.
3 Personalization You Can Add For Your Shopify Stores
So far, we looked at how personalization can affect consumer perception. But the real question you might be asking is: how do I give customers a personalized shopping experience on my Shopify store? I have briefly mentioned the types of personalization you can do for your online store. So here, I want to explain personalization and how it can help your Shopify store.
- Using A Product Personalizer
- Automated Product Recommendation
- Live Chat On Store Page
Using A Product Personalizer
If you are a Shopify store owner, then adding a product personalizer to your store is a great way to enhance your customer experience. Take this example of a Shopify store that provides personalized embroidery on t-shirts using a third-party product personalizer app:
As you can see, you can upload an image for the t-shirt and add graphics as you please. You can also browse through the design ideas that the store owner has put in the product personalizer. Additionally, you can also add customized texts which makes for a great gift. These types of product personalizers can give customers direct control over the design that they want on the product. It feeds into the human psychological need and helps improve consumer perception.
So why add a product personalizer to your store? A KickFlip study saw that customers spending more than 50 seconds on a store page are more likely to complete the purchase. With a product personalizer, your customers are likely to spend longer than 50 seconds designing their product.
With the right product personalizer, you perceive your store positively and the customer is happy.
Automated Product Recommendations
As a store owner on Shopify, you can provide your customers with automated product recommendations. This is as easy as checking a few boxes on your Shopify admin panel. This will allow your customers to see products that they otherwise would have not seen.
An Invesp study found that customers who interact with product recommendations are twice as likely to come back to your store. As Invesp put it, this might be only 7% of your traffic to your store but can account for up to a 26% increase in revenue.
Just seeing a product they might be interested in the product recommendation can influence them to go look at the product. That is when the anticipation and dopamine effect takes place and makes the customer go through with the purchase.
Live Chat On Store Page
Customer experience is very important for an online store. A bad customer experience can lead to 52% of customers going to a direct competitor, as reported in Zendesk 2023 Customer Experience Trends. A simple bad interaction with your store page is enough to account for this.
That makes it all the more important that every engagement with customers is meaningful and leaves behind a good impression. Since online stores have limited interactions with customers, adding Shopify’s live chat feature can enable more customer engagement.
The live chat feature allows customers to talk to someone about any issues or questions they might have with the product. This builds trust in your store and helps customers with any problems or questions they might have.
Additionally, it is also a great way to gather feedback from your customers. If many customers are using live chat to complain about something specific, then you can make those adjustments for your store. This type of personalized interaction is not just helpful for customers, but for your store as well.
Why Personalization Is Important For Ecommerce
I have highlighted all the points on how personalization can help consumer perception for psychological reasons. Here, I will talk about why personalization is important in eccommerce.
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- A McKinsey & Company study saw if personalization is implemented correctly, it can generate 40% more revenue. Being able to unlock the selective attention of consumers through personalization is vital for ecommerce success.
- Personalization creates greater engagement between your store page and customers. We saw previously how a bad customer experience can lead them to look at competitors. But with personalization, you can curate an experience that they won’t find anywhere else.
- A good customer experience through personalization will give customers a positive shopping experience. And this is how you gain loyal customers for your store. Loyal customers are often the minority of your customer base. However, they are the most important customers for any ecommerce they spend more time interacting with your store and buying products than a one-time customer would.
- Personalization also helps tailor the experience to each individual customer. The personalization that you get or get to do will be different from others. This uniqueness is what draws customers to your store and helps you generate sales.
- Personalization adds a uniqueness to your store. As the ecommerce business keeps growing, there will be more and more competition. Personalization can help differentiate you from the competition.
- Personalization can also help your ecommerce business to get better customer insight. The data that you obtain from your customers can help make personalization like product recommendations easier.
- Personalization can ease navigating your website. If your customers aren’t able to see the product page, then they won’t be able to interact with it. But with personalization like product recommendations, your store becomes more accessible to customers. They get to see the different products, spend more time browsing, and are more likely to purchase as a result.
Bottom Line
The need for personalization in eCommerce is becoming less optional and more of a necessity. Businesses cannot succeed without proper personalization or they risk lagging behind competitors. Customers want to feel like humans instead of being a statistic for businesses. With personalization, this perception change is possible and the overall customer experience is enhanced.