What are real-time notifications?

Imagine Mike, who wants to book a double room in a hotel in Boston for a couple of nights. He finds a nice hotel at a decent cost and in a good, central location. However, he decides to return to the site later, once he has done more research and compared prices with other hotels.

What Mike doesn’t know is that at the same time he looked at that hotel, five other people were looking too and there were only two double rooms left. So by the time Mike comes back to the site, there are no rooms available anymore.

The same issue happened to Sophie, who was looking at the latest Nike running shoes. Since she was hesitant, she decided to look back at the product in a few days. But when she returned to the site size 38EU was out of stock, as when she first viewed the product there were only 5 in-stock.

But what if they did know of those things from a notification appearing during their first search?

Since the room was satisfactory for Mike’s needs and Sophie’s motivation for buying the shoes was high, they would have probably made the booking right then and there.

Why are these notifications effective?

So why would this new added information in the form of real-time notifications motivate Mike to book the hotel immediately?

These notifications are composed of three concepts that motivate customers to finalize their purchase – transparency, urgency and social proof.

Transparency

Transparency is the full disclosure of things by the company to the customer. When the customer has complete knowledge about a situation, he or she can make better, informed decisions.

While customers have full knowledge of their internal needs and decisions, in e-commerce they are often lacking external information. However, external information (i.e. inventory, other shoppers’ activity, etc) can change customers’ shopping decisions.

For this reason, the real-time notifications’ transparency allows customers to be aware of the complete situation and make a shopping decision accordingly.

Urgency

Urgency is the sense of a pressing, high priority matter that requires a quick action. The sense of urgency is extremely effective in shifting customers’ decisions towards making a purchase.

When customers sense urgency they are triggered and stimulated to make a purchase and make that decision quickly, automatically and intuitively, resulting in more conversions (see an elaborate explanation here). This same decision might be different if they were not under the impression of urgency – they were not triggered and were to take time and analyze the decision.

Urgency can be created with regards to shoppers’ activity (“x people are viewing this item”) and/or to inventory levels (“there are only two items left”).

Social proof

Social proof is the influence of other people over an individual’s decision making, which is proven to have a great effect on customers’ decision making, particularly in e-commerce (see an elaborate explanation here).

Social proof in e-commerce translates into customers believing other shoppers’ decisions are correct or optimal and let them influence their personal decision.

As a result, customers value the opinions of other shoppers more than the company’s sales efforts. Also, other shoppers’ opinions influence may change or strengthen their personal thoughts of the item or the company. The customer is particularly susceptible to this influence if his beliefs are not fully founded yet (she is still hesitant).

Real-time notifications provide social proof to shoppers, even when they don’t intentionally look for it. Social proof can be about the company (“x people are shopping right now”) or about a specific item (“x people are viewing/bought this item right now”).

Since other shoppers’ activity is not public in e-commerce, revealing this information imitates traditional retail environment and enhances social proof. Both types convey popularity, which enhances the trust and perceived value towards the company and item.This builds the customer’s confidence, which reduces hesitations and leads to more conversions.

Combining the three techniques, the notifications are extremely efficient in showing the company cares, building trust, increasing customer engagement and ultimately, increasing conversions, by as much as 8%.

Implementing the real-time notifications

Types:

There are 15 different types of notifications:

1. Social proof of company:

– “X people are shopping now”

2. Shoppers’ activity urgency & social proof of item:

– “X people are looking at this product right now”
– “X shoppers have this item in their shopping cart”
– “Last purchase of this product was from NYC 12 minutes ago”
– “This product is the number two best seller in the category”

3. Inventory urgency & social proof of item:

– Stock updates: “hurry up! Only two left in stock”

(Transparency is inherent in all).

How to implement it?

Barilliance provides such software called Live!, which allows you to create dynamic, personalized and customized real-time notifications. The software includes an automatic conversion optimization tested against a control group, to present the optimal messages to each customer. Read more about it here.