How FOMO Tactics Can Increase Ecommerce Revenue
The fear of missing out can harness human psychology in a way that actually benefits your business.
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Fear of missing out, or FOMO as it's commonly known, is an unusual marketing tactic that harnesses human psychology's power to gain profit. As humans, we all struggle with anxiety that stems from an assumption that others might be having better experiences than us.
According to Strategy Online, 64% of users said they had experienced FOMO, most of whom were in the age group of 18 to 30, while 60% said they had made an impulsive buy after experiencing FOMO.
Ecommerce giants like Amazon, Sephora, Flipkart and many more have taken advantage of this apprehension and employed FOMO tactics to peak sales. Likewise, small businesses, especially ecommerce portals, can also generate FOMO to amplify their brand presence through some of these time-tested strategies.
Related: How FOMO Dictates Startup Funding
Set a time limit and show scarcity
Setting a time limit or having a countdown for offers and discounts creates urgency, and people tend to make impulsive purchases under pressure. Flash sales help boost sales by offering products at huge discounts for a relatively short period.
The fear of losing a great deal persuades buyers to grab the opportunity before it's gone, even if they don't require the product at the moment. "At Crafter's Companion, a 'Birthday Week' is celebrated, which essentially features sales throughout the week," explains Antonio Wedral, co-founder of ecommerce agency NOVOS. "It exhibits multiple elements: time-sensitivity, shows scarcity and offers a discount. This always results in being their best selling time of year."
Displaying the stock levels of the products can effectively trigger FOMO. Depleting stocks can also drive sales, as the thought of someone else ordering that one last piece shall be unsettling for many. Showing the products' inventory status can also encourage users to pre-order, a tactic used by Amazon when they warn customers of the product's scarcity.
Offer limited free shipping
Shipping fees can quickly put us off from buying something online. According to a MarketingLand survey, 90% of users stated free shipping as the prime incentive in online shopping. Offering free shipping for a particular duration or only above a certain bill amount can drive the customers to go the extra mile and purchase something additional to save the delivery expenses.
Personalized offers and discounts are hard passes; customers cherish opportunities solely available to them and indulge in treating themselves with the product. These exclusive deals can be on related products previously bought by them or packaged within upselling and cross-selling opportunities. Restricting deal visibility can induce fear of missing out on users and keep them on your site for longer durations. The need to be aware of all the latest developments can cause FOMO, especially when the deal is available for a limited period and missed deals won't reappear.
Show social proof
Social proof is a marketing strategy that indicates a product's popularity through the number of people who have benefitted from it. Ecommerce plugins leverage social proof by displaying recent sales and newsletter signups from the mailing lists. People seek validation from others before making online purchases and reviews or testimonials from previous users help establish credibility.
Showing the live sales information on the website can create an impression of the credibility of the site. It can be in the form of a pop-up notification highlighting the product purchased and the buyer's name. Ecommerce platforms have plugins that show sale notification popups on the site that display real-time sales activity.
Related: What Comes Next for Ecommerce and Digital Retail?
Promote user-generated content
User-generated content such as reviews, blogs or social media posts is genuine proof of a product's quality. Results of a Local Consumer Review survey report that 82% of consumers read online reviews, and an average consumer needs to read almost 10 reviews to trust a product. Including user reviews, along with the product description, can help users make a well-informed purchase.
Seasoned Ecommerce experts consider these strategies a definitive part of conversion-rate optimization techniques. With Ecommerce giants like Amazon using these proven methods to elevate sales and revenue, employing them in the right way can bring a lot to the table.