We’ve all been there. You have your eyes on a pair of sunglasses online. The store tells you there are only 3 pairs left. You are also presented with some shoes that would go well with the pair of sunnies – 50 pairs of those shoes have already been sold. This is where FOMO kicks in.
Ever wondered why there are only 3 seats left on the airplane when booking an airfare? Or why 4 other people are watching the same item you just looked up in the online store? Online retailers are using these ‘live’ cues to sway our purchasing decisions. Learn what’s happening behind the scenes when using FOMO and how you can apply the same techniques to your online business.
These ‘live’ cues are often not live but a create scarcity by telling shoppers there are only a few items left. New research from Monash University has now proven that real-time cues can lead up to 34% lift in sales! The paper, ‘See How Much We’ve Sold Already! Effects Of Displaying Sales and Stock Level Information on Consumers’ Online Product Choices’ analysis popular online retailers such as Ebay and Ozsales and the psychological sale techniques they are using.
Because online consumers can’t touch or see the real product, they often feel uncertain about the value and / or the reliability of the desired item. Therefore, showing external cues on popularity or availability are important. The Monash study found out that if you display two products to the consumer, the one with the lower stock level will be more popular. It can be assumed that the perceived quality of that item is higher as more people are buying it. Out-of-stock creates a sense of urgency and in fact can accelerate purchases.
It can be concluded that stock level information can be used to stimulate sales therefore limiting sales information can have a positive effect on your eCommerce store. However, the better the consumer gets to know your store, the less effective this technique becomes.
“Offline retailers should therefore also consider whether and how to make sales and stock level information available, and can benefit from insights gained in this study as to how to influence consumers’ product perceptions and potentially boost patronage and accelerate merchandise turnover.” Says Dr He and Professor Oppewal from Monash University.