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17 Slides on:

How do online shoppers think?

Behavioral concepts any retailer should learn

Introduction

Conversino optimisation for ecommerce site.

Increase your ROI by applying behavioral
science into e-commerce. Offer targeted real-
time offers and increase sales

Online Shoppers
Behavior

By Omri Yacubovich
Head of Biz Dev & Marketing
@Commerce Sciences
Http://Startupblog.co.il
 About me
f

Hi,

My name is Omri Yacubovich. I'm an Israeli entrepreneur,

script writer and innovation leader.

I'm currently heading the Business Development and

Marketing @ Commerce Sciences –the first to apply
behavioral science into E-Commerce. We are venture
backed by Google's Chairman, Eric Schmidt, delivering
significant conversion uplift for 1000+ online retailers
including US Top 100 retailers.

Keep in touch!

Connect with me Follow me on facebook twitter.com/Omri_Yacubovich

Http://Startupblog.co.il
Introduction
Common Belief

WR
if (humans are rational) and (free to make decisions) ON
G!
then
rational decisions are made

In J. C. Penney's words

WR
If our prices are always low, ON
G !
as they would if we offer coupons,
we can dismiss coupons

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Introduction
Mathematics and Decision Making

1+1 = 2

1+1 = 11

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Introduction

“ There are some factors that affect decision

making abilities and cause people to make

irrational decisions -Wikipedia

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Introduction
How do we make decisions?

Imagine that every time you cross the road, you would have to calculate
the cars driving speed, your walking speed, the length of the road etc.

How much time would it take to cross the road? Would you be
able to cross the road at all?

A car goes from point A to point B,

at a rate of 57 mph...

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Introduction
How do we make decisions?

Instead of taking into account all the relevant data, our brain uses
heuristics in order to make a decision.

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Introduction
Heuristics
Definition

“ heuristics are simple, efficient rules which

people often use to form judgments and make
decisions” -Wikipedia

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Introduction

Heuristics usually
give reasonably good results
quickly & easily

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Introduction

But there are some hidden traps -

behavioral biases
Many of these biases affect belief formation, business
and economic decisions, and human behavior in general

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Introduction
Cognitive Bias
Definition

“ A cognitive bias is a pattern of deviation in

judgment, whereby inferences of other people and
situations may be drawn in an illogical fashion.” -Wikipedia

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Introduction
Common Cognitive Biases

Framing effect Anchoring Availability heuristic Reactance

Zero-risk bias Ownership bias Pseudo-certainty effect

Loss aversion Less-is-better effect

Confirmation bias Illusion of control Distinction bias

Duration neglect Stereotyping Bandwagon effect

Gambler's fallacy Information bias Omission bias

Introduction
Anchoring
Definition

“ the tendency to rely too heavily, or "anchor,"

on one trait or piece of information when making
decisions.” -Wikipedia

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Introduction
Anchoring
Example

According to Nobel Prize awarded economic and psychological

researches (Kahneman & Tversky) , when people have uncertainty about
the price of a product, they often look for information from surrounding
offerings and willing to pay higher prices when "anchored" by an higher
price.

Kindle offer in Amazon.com:

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Introduction
Anchoring
Example

When people receive discount they are automatically “anchored” to the

price before reduction.

What's more appealing?

Product A Product B

$26.99 $21.10 $21.10

Save 20%

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Introduction
Zero risk bias
Definition

“ a tendency to prefer the complete elimination

of a risk even when alternative options produce a
greater reduction in risk (overall).” -Wikipedia

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Introduction
Think Quickly
Choose between a FREE $20 coupon to Apple store, or a $30 coupon for eight dollars.

Which one would prefer to get?

Get Free Coupon Buy for $8

FREE
$30
$20 Or
Coupon
Coupon

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Introduction
Zero Risk Bias
Example – Soap.com homepage

The FREE offer is more valuable than offering the a few dollars discount,
equivalent to the delivery price.

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A

17 Slides on:

How do online shoppers think?

Behavioral concepts any retailer should learn

Introduction

Online Shoppers
Behavior

By Omri Yacubovich
Head of Biz Dev & Marketing
@Commerce Sciences