What influences a consumer to buy from an online retailer or direct from the manufacturer’s website? Is consumer decision-making online always driven by price? Sian Davies and Dipesh Mistry of The Behavioural Architects, and Pablo Perez and Sarah Ashley of Google share practical insights from new research exploring the impact of behavioural science on purchasing decisions.

Decoding Decisions is a research programme that addresses a key question for marketers: how do people decide what to buy? In 2020, the report “Making sense of the messy middle” showcased the power of behavioural science to drive brand preference as consumers explore and evaluate purchase decisions. Since then, Google and The Behavioural Architects have continued to collaborate and explore ways for marketers to activate and win in the messy middle.

Navigating the messy middle isn’t only about deciding what product to buy, consumers also have to decide where to buy from. Just as the internet age has seen a rapid increase in available products, the number of sellers has risen in tandem. This entanglement between products and points of sale invites several interesting questions:

  • Is it easier to encourage consumers to change what they buy or where they buy it from?
  • Can retailers use behavioural science to drive consumer choice?
  • What can brands do to encourage consumers to buy directly from them?
  • How can marketers build propositions that inspire confidence without relying exclusively on brand or pricing?

To answer these questions, we ran experiments in nine categories: trainers, dog food, whisky, laptops, face moisturiser, second-hand cars, flights, hotels, and mobile SIM cards (Each category was tested with a minimum of 800 in-market shoppers). The experiments explored decision-making in two point of sale contexts: product brands sold via retailer websites and the same brands available to buy directly from manufacturer websites.

Participants in the experiments were asked their first and second choice brands for both products and retailers and then shown simulated shopping scenarios of their preferred product brands available to buy on their preferred retailer websites or also direct from the manufacturer. Different expressions of behavioural science principles supported the product and retailer brand propositions and participants were asked to choose which option they preferred. To simulate new entrants to the marketplace, we invented nine fictional product brands and nine fictional retailer brands and introduced these as options alongside participants’ preferred brands and retailers (Figure 1).

Figure 1: First-choice trainer brand on first-choice retailer website vs. fictional trainer brand on fictional retailer website

The results of our experiments were powerful, replicable, and sometimes surprising, challenging conventional wisdom.

First, we explored the relative “stickiness” of brand preferences. When shoppers were shown their first-choice retailer offering both their first- and second-choice product brands, 27% switched brand preference to their second choice. However, when shoppers were asked to choose between buying their preferred product brand from their first- or second-choice retailer, 48% were willing to switch. All things being equal, product preference appears significantly more durable than retailer preference.

Next, we ‘supercharged’ product propositions with behavioural science executions of social proof (star ratings), authority bias (recommendations from trusted third-parties parties) and category heuristics (mental shortcuts that help us make decisions within a given category e.g. ‘durable and lightweight’ for trainers). The retailer brands in our experiment were ‘supercharged’ with power of free (a free gift with the purchase ) and delivery friction (how slowly or quickly consumers receive the item). And to measure the importance of value to purchase decision making, we added price and promotion as a variable for the retailer, testing products at full price as well as with discounts of 10% and 15%.

Figure 2: Behavioural science principles applied to product and retailer brands:

The “stickiness” of brand preference was amplified when we applied these behavioural science executions. Supercharging product propositions shifted even more preference away from first to second-choice product brands, and even to fictional new entrant brands. Overall, across the nine categories we explored, around a third of shoppers were prepared to switch from their first choice to an invented product brand, but more than eight out of ten switched to an invented retailer brand (figure 3).

Figure 3: Brand preference after supercharging invented brands with behavioural science

Source: Google commissioned U.K. research conducted by The Behavioural Architects. n=1000 in-market online shoppers of trainers, U.K., ages 18-75, June 2022

The economic pros and cons of launching a D2C channel are beyond the remit of this research. But there was one important question we wanted to answer: do consumers respond differently to D2C compared to any other retailer? Based on our experiments, the short answer is no. Our results suggest that manufacturers going D2C are likely to achieve preference shares similar to those of average category retailers, providing they are present during the decision-making process to give consumers a choice. In a variant of our product/retailer experiment that included a D2C option, the results were roughly in line with those of second-choice or challenger retailers. When price and proposition were kept the same, on average 42% of shoppers across categories chose the D2C option over their preferred retailer, compared to an average of 47% for their second-choice retailer. When supercharged, the average was 73% compared to 77%, respectively.

Finally, we explored the impact of promotions at the point of sale. For brands and retailers, it isn’t always desirable to pull the discounts lever and our results offer cause for optimism. 70% of decision-making in our experiments was driven by factors other than price (figure 4).

Figure 4: 70% of decision-making in our experiments was driven by factors other than price

Source: Google commissioned U.K. research conducted by The Behavioural Architects. n=844-1000 in-market online shoppers per category, U.K., ages 18-75, 2022.

We also found the cumulative effect of behavioural science can match that of discounting. When we supercharged propositions with the strongest expressions of the BeSci principles, they had more impact on shopper choice than a 10% discount in three of our nine categories. There were no categories where the relative impact of behavioural science wouldn’t make a difference in situations where margin or other considerations prevent discounting. So, while promotional activity clearly plays a key role in decision making, supercharging propositions with the best expressions of relevant behavioural science principles can have as much, if not more, impact on what people choose.

For product and retailer brands alike these findings demonstrate the power of behavioural science to enhance the appeal of your proposition. Providing consumers with relevant information and options can support their decision-making and drive preference towards your brands. As ever with behavioural science, the relative impact of different levers depends on the context and the effectiveness of each execution, so running experiments to test and evaluate impacts for your specific categories and brands is vital.

Download the full report on Think with Google here.