5 things you need to know if you shop online

Corporate office equipment.

There are many reasons why you might prefer to shop online; price, convenience, maybe even discretion… but what you may not realise is that there are also plenty of other reasons to be weary of this brave new world. If you are an online shopper then you need to be aware of some of the tools and tricks smart digital marketers are using on you every day. If you’re a marketer and you haven’t experimented with any of these devices yet, you need to get on board ASAP.

Here are 5 common internet shopping scenarios that demonstrate how easy it is to be manipulated in the digital world. Use this information to save money the next time you shop online.

1. Dynamic pricing:
What you pay is different from what others do

Scenario: You are looking to buy a plane ticket for your holiday but decide to see what prices other airlines have to offer before making your purchase.

Airline Tickets - Dynamic Pricing comparison.

Have you ever noticed that prices on airline websites update at an unusually quick frequency? This is because they are using complicated algorithms that dictate what price to show you. Airline websites are one of the best examples of how dynamic pricing works online: the price can change as time gets closer to take off, whenever another seat is purchased by a passenger or when you leave, and then return to the website. Yes, that’s right… if you visit the website and then return at a later time, you may find a different price irrespective of whether or not tickets are purchased.

Using something called ‘cookies’, marketers can monitor your activity on a website, and then use this information to tailor your experience the next time you visit the same website. Marketers have realised a returning customer who has already been exposed to the brand is more likely to make a purchase, so in some cases will try and charge you more for the same product. A cookie, for those that don’t know, is a small piece of data downloaded to your computer to help your computer and the website communicate. Today cookies can be used for so many things from session tracking, to enhancing the user experience, to even, in cases such as this, displaying an alternate price.

The latest technological improvement on the cookie is the single-sign-on – one login you use across all your devices. Big brands like Apple, Facebook and Google have realised that users are moving away from internet consumption on just one device (your PC) to a range of platforms including mobile, tablet and desktops so they are encouraging users to have one account as they move between all their devices. Just think, how often are you logged into a Google app or Facebook account while you browse the internet? Now the single-sign-on is more powerful than the cookie as it effectively saves a history of your actions, movements and purchases for all time, and this is valuable information that digital marketers use to target you with.

2. Comparing deals:
Are you really getting the best one?

Scenario: You are about to travel overseas and have left buying insurance to the last minute, you visit a few websites before deciding to purchase off the company offering the best deal.

Comparison of Airline ticket deals.

Large brands often amass a series of websites and digital assets online. This means that in many cases, instead of choosing between competitors you are really comparing different value propositions from the same company giving you the illusion of choice. This is a common occurrence in the insurance, home loan and banking industries amongst many others.

Alternatively, you may have come across a ‘comparison website’ in your online travels. Comparison sites are those that amalgamate information on products or services into one website (think InfoChoice, iSelect, Webjet, etc.) making it easy for shoppers to compare deals. While it may be quicker to get an overview on a range of products, these comparison sites often have secondary motives, so at the very least make sure to visit the actual brand’s website yourself to ensure the deal on the comparison site is the same being offered there. Do not do this by clicking a link on the comparison site as this will most likely result in you being tracked and presented with an alternative offer.

3. Split testing:
You’re just a guinea pig

Scenario: You and your friend shop at the same online store but you see a different offer on the page to the one they saw last night.

Split testing example using web page.

Firstly you’re not going crazy, it’s actually very hard to notice this trick, and more often than not it’s played down as a computer glitch, but I can assure you (or maybe not assure you…) that this is very much real. Split testing is a common tactic employed online, it means that instead of showing two people the same page, we show one person the original version, and the other a new version to discover which offer performs better.

On a micro-level this can be done to anything from buttons, to copy and images – see for example when Microsoft changed the colour of their button to a precise shade of blue resulting in $80 million in extra revenue. Facebook were recently caught out split testing their users but instead of having the goal to increase sales, they were conducting a psychological study to examine how emotions can be spread on social media.

Split testing or ‘A/B testing’ as it is also known as, is used to optimise websites so that they perform better. It is commonly used in ecommerce because it is easy to define performance as a correlation to sale. We want you to spend more money on our client’s websites, and these tests are designed to make you do so.

4. Remarketing:
Do you ever feel like you’re being followed?

Scenario: You’ve spent the last couple of hours browsing through online fashion stores but everything was too expensive to buy. Days later you see an ad online of the same jeans you wanted but at a discounted price.

Facebook comments talking about Remarketing.

Remarketing is a relatively new advertising initiative which allows marketers to display a targeted ad to a user that has previously visited your website as they browse elsewhere on the internet. In other words, now that you have visited the S1T2 Workshop page I have identified you as a potential client, and could effectively follow you around the internet by showing you advertisements that said ‘hey we’ve posted a new blog article’ as you visit other sites – check out this story of a guy pranking his flatmate using targeted ads on Facebook.

How effective is this you ask? Apart from the numerous case studies on remarketing, using the above scenario as an example I can illustrate how likely you are to make a purchase when confronted with remarketing. Let’s say you find some jeans you want to buy online that retail for $100, and the profit margin on these jeans is 400% (the cost of making the jeans is $20). You’ve already visited the product page of the website which triggered the remarketing, but you didn’t buy the jeans at that time. A couple days later I show you an ad that says the jeans are on sale for 50% off and you decide to take advantage of this offer by purchasing the jeans. In your eyes this is a bargain but to the marketer who’s just sold a product it represents a purchase that otherwise would not have been made – they’ve sold the jeans by merely reducing their margins.

By placing an ad in front of an audience you know is interested in your product you can greatly increase the chances of a sale. In this case, the shopper may not have realised it but they were identified and targeted as they traversed the internet, ensuring the brand and product stayed on their minds at all times.

5. Behavioural learning:
The true value of data

Scenario: Every week you buy groceries online and there are certain items that you tend to buy at certain times of the year, for example ice cream in summer. When summer comes, you start to see advertisements for a new ice cream brand as you browse the internet which prompts you to make a purchase.

Behavioural Learning graph of facebook data.

Everything you do online is tracked and recorded. It’s a scary statement but one that’s true nonetheless. While other organisations such as governments are motivated by political reasons, us marketers really only care about data for one reason – it helps us to sell you stuff. If we know your interests, passions and behaviour it’s easy to present you with a like-minded service or product.

As consumers we marvel at the smarts of algorithms such as Amazon’s recommended products, Pandora’s next music track, or Google search but the reality is that the reason why these predictions are so accurate is that they are simply analysing the data we’ve given them. Every time you interact on Facebook or Google your actions and interactivity is being saved in the from of metadata and analytics. This is the true value of data in the digital world – it can be used to anticipate your habits, beliefs and actions. And if you think you’re one of those people who play it safe and don’t provide details online, think again! You only have to look as far as the research on Facebook’s ‘like’ to realise what you give away by simply engaging – see my post on Google vs Facebook for more information on this topic.

While it may be unrealistic to expect anyone to abstain from using the internet entirely, you can at the very least, understand and be more aware of the potential pitfalls. For those that can be bothered, one solution that works to some extent is to make sure the next time you purchase from an online store use incognito or private browsing, and try to remain logged out of any social platforms. You may not be able to change the fact that your data is monitored and saved, but at the very least you can help yourself to better deals on the clothes, holiday plans, insurance deals and home loans you buy online. The next time you shop online do so with guilty pleasure, but also remember that every move you make is a word written in the virtual biography that is you.

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