How People Really Buy, Not How We Think They Buy
Introduction (Via Bill Abbott, Alex Mannella, Kyle McNamara, and Amaresh Tripathy)
The Internet has a huge influence on consumer behavior worldwide. Millions of customers use the Web, as well as cell phones and in-store kiosks, to compare, contrast, and purchase products. Once a nascent “marketspace,” the Internet is now an established shopping environment in which even the smallest features can cause shifts in buyer behavior.
In spite of the new opportunity arising from online channels, most companies do not test their e-commerce interfaces for revenue maximization. Those that do, often fail to leverage the science of behavioral economics, which documents how people really think, as opposed to how they are supposed to think (as suggested by rational economic theory). Companies that deploy behavioral economics to improve their e-commerce interfaces can garner short-term profits and long-term competitive advantage, because they are in a position to learn faster than their competition about what really works.