Ecommerce Optimization Series #2: Addressing the challenges around increasing choice and competition

By Emma Travis

The paradox of choice, a concept coined by psychologist Barry Schwartz, suggests that too much choice creates anxiety for shoppers, sometimes leading to choice paralysis.  In our industry, the ‘paradox of choice’ is commonly discussed in the context of a brand's product offering. But the paradox of choice starts much earlier in the user journey than your website when you consider 40% of online purchases begin on a search engine.

5,190,000 options, but your website isn’t one.

The Challenge 

Unless you sell a unique product with few alternatives, you face an incredible amount of competition. With an estimated 12-24 million ecommerce sites worldwide, you likely compete with ecommerce giants, bricks-and-mortar retailers, online marketplaces, and direct-to-consumer brands across the globe. 

It’s not just the volume of ecommerce options that causes a problem; user journeys and the elements that play a role in decision making are more convoluted than ever. Customers can often fall down a rabbit hole of blog recommendations, Google or social shopping options, and reviews when considering a purchase online. Consumers are overwhelmed at every stage of the buying process.

Covid-19 has resulted in consumer behaviors changing, however. During a three-month snapshot, 33% of US consumers tried a new website, 36% tried a new brand, and 40% tried a new shopping method. Now is a great time to work on being the go-to option for customers.

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The Opportunity

Here are the three main areas of opportunity to focus your efforts and overcome competition and customers’ choice paralysis. 

1. Cutting through the noise and being considered  

Rather than traditional CRO programs, where the remit is usually limited to the users’ experience once they arrive on your website until they purchase, Customer Experience Optimization (CXO) looks at the entire user journey across channels and mediums. To tackle the increase in competition, ecommerce optimization teams need to apply their methodologies to the whole customer journey, starting from how customers find and consider your brand.

Your competitors are marketing and selling through similar channels, making it hard to cut through the noise and get noticed. Optimization teams can experiment with novel media and marketing approaches. For example, you could A/B test a direct mail campaign to measure the impact of different creatives, messaging, and the channel itself. Or test the business impact of selling via social media, presenting your products when customers aren’t in “shopping mode.”

2. Experiment with ways to differentiate your brand 

If you think that offering free delivery, a range of payment options, free returns, and a great mobile experience will be enough to sway customers; you’re in for a rough ride. These are considered table stakes and offered by most ecommerce companies. So, what set’s you apart from competitors? 

Experimentation offers brands the opportunity to test big, bold strategies from different business models to pricing and propositions. E.g., what if you provided a style advisor who selects products for customers? Or a sustainable proposition where you give the option to recycle unwanted items?

There’s also the opportunity to use creativity to stand out. You might have heard the phrase “blocky-wocky websites,” referring to websites conforming to a standard look and feel. While we all want to provide the best experience for users, it doesn’t mean you have to follow the same layout, design, functionality, or content as everyone else. When websites all look and feel similar, it makes it even more difficult for customers to decide between options—so use experimentation as an opportunity to test out creative alternatives. 

We’ve written before about the nature of decision-making and how behavioral economics pioneers Daniel Kahneman and Amos Tversky discover that humans “systematically make choices that defy clear logic.” Sometimes as experimentation experts, we can get too caught up in finding logical solutions and forget about introducing magic into our ideas. 

3. Help customers in the decision-making process 

To reduce choice paralysis and help users find the “right” product, you can test product filters, quizzes, product recommendations, or technologies such as AR. The best insights to inform these elements are discovered through user research when you delve into what’s important in the decision-making process.  

Customers often have multiple tabs open, comparing your product with other retailers. One of the best opportunities is to run copy tests on product descriptions. This applies to the product descriptions on all channels where you are selling. For example, the Speero team has run experiments on Amazon product descriptions. While the experiment design might be different, the principles are the same. Product descriptions help your inventory get found and considered but more crucially, it’s the point where the customer makes a final decision. Nail your product descriptions, and you’re more likely to make a sale. 

What next?

Customer Experience Optimization (CXO) is helping companies find solutions to the most significant challenges and opportunities in ecommerce. This is the second instalment in our nine-part ecommerce optimization series, where we are providing actionable solutions and guides to optimize against these challenges.

If you have any questions about the areas discussed in the article or you'd like to learn more about our CXO and user research services, contact me via emma@speero.com I would be happy to share ourethods

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