While shopping, consumers are uncertain about many things, and often associate the purchasing process or choosing a product and vendor with various risks.
Let’s have a look at the 5 types of perceived risk online customers face at the time of purchase, and how online businesses can deal with them.
The perceived risk of buying a product that doesn’t perform well or fails to meet its expectations exists in the brick-and-mortar setting as well, but it’s somewhat more disconcerting when you’re shopping online.
Online customers often aren’t sure if a particular product will look and work as advertised. Since they cannot touch and test the products prior to the purchase, they’re unsure about the performance at the moment of purchase. They have no reliable methods for testing quality, or durability until the package arrives at their doorstep and they can try the product themselves.
To safeguard against the risk of bad purchases and the dissatisfaction this entails, shoppers resort to online reviews to educate themselves on the benefits or disadvantages of the product before every purchase.61% of customers read online reviews before purchase @Econsultancy #custexp Click To Tweet
These stats should be encouraging enough for you to integrate product reviews and increase your shopper’s purchase confidence.
Am I paying the right price, or am I being ripped off? Should I spend more on another product to get a better quality? Will paying more convert directly into quality? Should I share my credit card information with this online store?
These concerns are only natural. You would never disclose your credit card details to a seller in the street, so why would an online shop suddenly be more trustworthy?
The financial risk and the potential loss that a purchase entails is especially big when the transaction involves heavy price tags and target customers with relatively low-income levels.25% of shoppers don't purchase if they can't pay how they want @businessinsider #custexp Click To Tweet
Your online shop should cover at least the most popular preferred payment options such as payment via credit card, invoice, and PayPal.
“We buy things we don’t need, with money we don’t have, to impress people we don’t like” – Dave Ramsey
What will my wife think of this dress? How will my kids react to this gift? What will my friends think of my new haircut? Is the tie suitable for my job interview?
These are all social risks. Consumers are concerned about fitting in, and about opinions of their friends, family, or colleagues, whether it’s a purchase for themselves or gifts for others.61% of female social media users seek beauty product advice @StatistaCharts #custexp Click To Tweet
To encourage shoppers and reduce their insecurities, your online shop should integrate personal expert product advice functionalities.
Time loss risk
What if the product isn’t up to my expectations? Will I have to start my search all over again? What about the time that will be wasted in the return and refunding process? How will I be able to go to the post office and send the product back when I work 9AM-5PM?
Even if an online store offers an instant money back guarantee, consumers will still risk losing the time that they have invested in reaching the purchase decision.58% want a hassle-free “no questions asked” return policy @comScore #custexp Click To Tweet
Online stores have to offset and address this perceived risk with convenient delivery options and a customer-friendly product return policy.
Increasing the shopper’s confidence
The higher the price, the greater the perceived risk for the shopper. The greater the perceived risk, the more desperate online customers will be for “more information” and “recommendations” from friends or product experts.
As a business, you need to provide them with ample amount of the required information and personalized recommendations and make them easily available in your store. By doing so, you will be saving people the need to research products on other sites and reduce the risk of losing the sale in the process.
When we say “more information”, we’re specifically talking about the right information. Consumers will be paying a lot more attention when the information is relevant, and when it is coming from an expert on the subject.
Smart sellers use interactive content to learn more about customers’ preferences first, and follow-up with relevant information and product recommendations. The furniture store Raymour & Flanigan uses an engaging online quiz to improve their shopper’s confidence and narrows down available choices to a manageable few.
Based on the analysis of answers to a series of questions like preferred location or style, the product advisors on the realtor website will learn the customer’s taste needs and come up with recommendations for the most suitable furniture and follow it up with relevant detailed recommendations.
Guided Selling plays a crucial role in reducing perceived risks and replacing uncertainty with relevant knowledge and product information
1. it minimizes functional risk by ensuring that customers are buying the right product for a particular purpose and that the product will meet their individual needs and requirements.
2. it addresses financial risk by highlighting the benefits of products, making sure that the customer doesn’t pay extra for features they will never find useful.
3. it decreases social risk by equipping customers with the right level of knowledge (and confidence) to minimize their perceived risk of buying unwanted presents or products not matching particular person’s style or dress code. Guided Selling will guide the shopper through the whole decision-making process like an experienced salesperson and, using several easy-to-answer questions, can help customers to buy even the most specialized, technically advanced or style-sensitive gifts.
4. it diminishes the time loss risk by giving fast, expert advice right when it’s needed, and making sure that customers are buying the right product for the intended purpose
As you can see, Guided Selling brings multiple benefits to help you deal with the various kinds of risk that online shoppers experience, with the concerns of the first-time visitors in particular. Once they have experienced making a purchase, and they are happy with the results, most of these risks will eventually fade out.