Why Comparing Apples to Apples Online Leads To More Fruitful Sales

 
 
The items displayed next to a product in online marketing displays may determine whether customers buy that product, according to a new study by Uma R. Karmarkar.
 
 
by Dina Gerdeman
Online, consumers are more likely to buy when a product grouping
display contains like items. Source: Mik22

In online retail displays, items pictured next to your product may make or break a decision to buy that product, according to results of a new study by Uma R. Karmarkar.

A retail website has the best chance of ringing in a sale if the considered product is surrounded by related items in the same category, rather than a mishmash of random, unrelated items, Karmarkar says. In other words, if a consumer clicks on the Bananagrams game on Amazon.com, it would be best for the retailer to display Apples to Apples and other board games, rather than attempting a cross-promotion with, say, Halloween costumes.

The study results are outlined in a forthcoming Journal of Behavioral Decision Making article, The Impact of “Display-Set” Options on Decision-Making, written by Karmarkar, an assistant professor in the Marketing Unit at Harvard Business School and an affiliate of Harvard’s Center for Brain Sciences, who studies the neural and psychological factors that underlie consumer decision-making.

“The more similar the target item is to the display items, the more purchase likelihood increases”

Grouping products into a category shows people the way to make clear judgments about how to spend their money, Karmarkar says. Seeing similar options seems to reinforce the idea that the consumer is on the right track by purchasing this kind of item, and can provide the psychological nudge the shopper needs to buy it.

If the retailer veers off topic and displays something unrelated to the target item, the shiny new objects could distract the consumer enough to abandon the initial product.

“The retailer is implying that yes, Bananagrams is great, but look at the other things we have in the store,” Karmarkar says. “For a lot of shoppers, who only have a certain amount of money to spend and have the awareness that they can’t buy everything, it could distract them from their focus.”

In one experiment Karmarkar conducted, more than 200 online participants were asked to decide whether they would purchase a target item in the center of their screens. The participants were divided into three groups: an alone condition, where they viewed only target items without any other items; a matched condition, where they viewed targets along with two display items from the same retail product category—for example, Bananagrams was shown with the Apples to Apples and Catch Phrase games; and a mismatched condition, where they viewed targets with two display items from different categories, such as Bananagrams with a vanilla-scented candle and a Swiss Army knife.

The results demonstrated that a “shopper’s” purchase intent when the display items were matched was significantly higher than the person’s purchase intent for mismatched products.

In another experiment, participants were asked to make a purchase decision around a set of bath towels and were randomly assigned to three levels of display-target similarity—one with low similarity that displayed a watch and computer mouse; another with moderate similarity that pictured other bathroom accessories; and a third with high similarity that showed other towels. The results demonstrated that the more similar the items were, the greater the purchase intent.

“The items don’t have to be exactly the same. You could have computer mice with other computer peripherals,” Karmarkar says. “But the more similar the target item is to the display items, the more purchase likelihood increases.”

Karmarkar was surprised to find that the similar items didn’t seem to act as competing alternatives to the buyer. Instead, a cohesive display provided a general frame for the decision, keeping the buyer fixated on the question of whether to buy something in that product category.

More research is needed to know whether in-store sales might get a boost similar to the kick provided in virtual stores by grouping similar products together, Karmarkar says. But other research has shown that the relative position of products on a store shelf can have a big impact on purchase decisions. And items that are placed closer to each other can be perceived as more similar.

Karmarkar says online retailers are likely to be just as surprised as she was about how strongly the category makeup of online displays affects sales.

“I’ve already gotten some good feedback from people in the industry as well as academics,” she says. “They’re not shocked, but they are surprised by the effects of these decision settings. I think it is useful for online retailers to know that there can be benefits to showing same-category options on a specific product page.”

Related Reading:

Neuroeconomics: Eyes, Brain, Business
Creating Online Ads We Want to Watch

About the Author

Dina Gerdeman is a senior writer for Harvard Business School Working Knowledge

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