Switch Thinking About Switching Costs

We’d like to minimize costs to shoppers who want to switch from another store to shopping with you. We’d like to maximize costs to shoppers who want to switch from your store to another.
     That second one is more difficult to achieve with your customers who shop at your online store than with those who shop only at your bricks-and-mortar (B&M) store. Researchers at Yonsei University in Korea and Shri Shankaracarya Institute of Technology and Management in India note the ease of comparison shopping on the internet. If your customer finds a better online deal at another merchant, he might drag his B&M business to that merchant, too. The ecommerce brain homes in on information filtering shortcuts, and a nice shortcut is to deal with fewer merchants.
     Yes, there are individual differences in ecommerce brains. Some differences are related to age. Younger consumers’ brains are more likely than older consumers’ to enjoy multitasking and so are more likely to stay with your B&M operations even if changing their online supplier.
     For all your customers, and especially for those of older ages, recognize questions related to switching costs:

• “How difficult will it be for me to master skills necessary to carry out the new behavior?”
• “If I’m to shop at another store instead of yours, what time will I spend deciding how to fit that into my schedule?”
• “What social costs would I need to pay? If the other store doesn’t carry the prestige of your shopping place, will I want to hide from my friends what I‘m doing?”

     The Korea/India research findings about switching costs support something called “status quo bias theory,” which says that there are many levers to motivate people to say with their current behavior. Here are some relevant to store patronage:

• Risk avoidance. Staying with the familiar carries known disadvantages. Switching to something different chances unknown disadvantages.
• Responsibility for change. If making the change impacts others, the consumer might be held accountable when anything goes wrong. Blame is less likely if staying with the status quo causes problems, as long as there’s been a history of good outcomes.
• Saving mental energy. There are many important choices to be made every day. Devote thinking to those choices and put off thoughts of changing retailers for now.

     Switch your shoppers’ thinking, and your own thinking, about switching costs in order to achieve what is best all around.

Click below for more:
Minimize Switching Costs
Design Store Operations for Ecommerce Brains