Global e-commerce sales exceeded $2 trillion in 2017, and are on pace to more than double by 2021. Yet average online conversion rates have remained doggedly low: Fewer than 4% of consumers arriving from desktop browsers buy, and the number is lower still for tablet and smartphone users (3% and 1%, respectively). These are a far cry from offline retail conversion rates, estimated to be 20%–40%.

Question is, why do so few online shoppers convert to purchasers?

Consumer behaviour research suggests that trust is essential to forming an intention to purchase. When trust is high, people are much more likely to take risks and engage in trade. In traditional business contexts, trust emerges and evolves in a physical space, and between two or more people interacting in person. But in the e-commerce setting, a prospective customer usually does not have any such contact, and so they must rely entirely on the digital experience. So, how exactly does
consumer trust emerge online?

Our teams of experts have tried to provide an exact answer to this question, one rooted in deliberative cognitive processes. They use decision models to describe sets of logical factors related to the formation of purchase intentions, such as an individual’s preexisting disposition to trust or a website’s structural assurances, such as indicators of strong encryption and security, privacy policies, and return guarantees. Deliberative processes assume strong causal relationships, hard constraints, and that people expend explicit cognitive effort as they make their trust assessments.

While the notion of deliberative models is appealing, it does not explain research showing that many visitors ignore “hard” factors such as privacy and security policies, while being influenced by seemingly insignificant factors such as font styles
and colours. Thus we were curious: Is it possible that online consumers also rely on less deliberative, “fuzzy,” instinctual processes, such as those commonly used in interpersonal trust situations? Could it be that online shoppers actually commit very
little explicit cognitive effort when making the decision about whether to trust a website?

One system of reasoning is deliberative, rooted in symbolic structures, rules, and established patterns of logic. The other system is associative: diffuse, approximate, and no deliberative, based more on personal experience and intuition than on formal rules. The associative system is not irrational per se, but it may not be consistent with formal rational logic.

At IrisLogic, a longitudinal logistic regression analysis study was conducted to fully understand the trust differences across various groups, and this revealed two major findings. First, when faced with the hypothetical, zero-risk decision, our subjects relied on deliberative (rule-based, logical, rational) processes. Second, when faced with an actual, and therefore riskier, decision, many of our online shopping subjects turned to associative (intuitive, diffuse, approximate) processes. When making decisions involving risk, such as an online purchase from a website, consumers tend to rely more on intuition than on deliberation. This is important because it challenges the established deliberative perspectives of consumer trust formation
and offers an explanation as to why things like aesthetics, professionalism, and other implicit clues matter for building online trust.

Understanding that online consumers do not always engage deliberative processes, but often rely on intuition — especially when making higher-risk decisions — has profound implications for redesigning online consumer experiences. “Simple”
changes (such as page layouts and choices of fonts, images, and colours) may be far more critical to associative trust-formation processes than we previously understood. Our findings suggest that what seem like merely aesthetic design choices may actually be the way your customers learn to trust you (or don’t). And that will influence whether they decide to make a purchase.

At IrisLogic, we continuously work with our technology partner to develop strategies and development platforms catered towards e-commerce and adoption. We help our customers understand what it necessitates to have a higher click through’s transformed to real business through mobile and web platforms. We provide e-commerce analytics that helps our customers understand business cycles.

Whether its integrating secure payment engines or using crypto currency enablement, we can help businesses identify critical aspects and plan for the future. Real-time alerts and feedbacks of inventory, supply chain, merchandise, check out,
and security is not only important but gives confidence to the customer to shop at your virtual location! Contact us to explore how IrisLogic can help you grow your intuitive click through.