Have you ever bought something because your friends bought it or because it had good reviews? Have you ever entered a restaurant because you saw that it was packed? Most of us want to believe that our purchasing choices are independent and purely based on our interest; however, this is rarely the case. Hence, ask yourself this: why do these factors make you want to buy a product or pay for a service. In this article, we will be answering this question, along with the side effects of copying other people and how companies use the psychological phenomenon of social proof to attract consumers to what they offer.
Observations of Shopping Behavior
Many people question why they, and their friends, always trust external sources, such as influencers, on what products to buy. Therefore, they judge a product’s quality based on who is promoting it, which is caused by social proof. Social proof is the habit of copying other people’s choices and opinions when faced with uncertainty.
Almost every purchase we make is influenced by external sources, and we never realise it. This tendency of relying on others to help you make decisions is called herd behavior, which is when one individual follows a herd instead of relying on their own judgment. Additionally, these external sources extend beyond just influencers and celebrities. Your friends, family, and even strangers influence your everyday choices by giving recommendations, reviews, and observing their visible behavior.
Imagine you are out on the street looking for something to grab for lunch. You pass by two different restaurants, one is Italian, your favorite; however, it’s a ghost town. Next, you pass by an Indian restaurant, not your favorite but still okay, but in this instance, the restaurant is almost full. In this example, most people would rather go to an Indian restaurant because they believe that more people equals better food. In the midst of uncertainty, you rely on the crowd’s size to decide which restaurant you are most likely to enjoy. This is known as signaling, which is when reviews or crowds act as signals that indicate quality. However, the reliance on crowds is not random; it serves an important economic and psychological purpose.
Why Copying Other People Feels Safe
Relying on crowd sizes or reviews can make you feel safer with your choices, whether it is because you believe the product is better quality, or because you would feel less guilty if the product’s quality is poor. You may not know this, but social proof has existed for centuries, only now it has evolved to where every click, like, and comment is a signal towards the right choice. This age-old human mechanism is used “to mimic the actions of others, particularly faced with uncertainty," as stated by Medium. In fact, when buyers are faced with different options and are unsure of their quality, value, or risk, which can often happen when shopping online, looking to others for guidance is common. Additionally, social proof is used to avoid your fear of missing out (FOMO) on a product that many people have and you don’t.
Unlike what some people believe, that social proof is just being lazy, it is actually a more efficient way of shopping. Social proof creates feelings of safety and confidence when purchasing in-store or online. Furthermore, it reduces the risk of regret when purchasing and wasting money, because if the product turns out to be not what you expected, you can spread the blame among the people that recommended the product. This psychological concept reduces the mental stress of making decisions, especially in a world where consumers are faced with an endless number of options; relying on social proof lowers the opportunity cost of decision-making. Since social proof is so influential among consumers, companies have learned to exploit social proof and use it in their marketing campaigns.
How Companies Leverage These Triggers to Motivate You to Shop
Due to the fact that consumer behavior is predictable when using social proof, companies deliberately design marketing around it. Research shows that 97% of consumers look at online reviews when searching for businesses, and 90% of online buyers are influenced by social proof during their consideration phase. Knowing this, brands take advantage of this psychological concept that is integrated into our everyday life by using social media (the most used source among Gen Z consumers to receive information) to promote their brand.
Companies use various effective methods to leverage social proof, each designed to demonstrate popularity and value. A few examples include posting shortened versions of case studies, which work well to show how products truly work to meet the consumer’s needs; or partnering with popular influencers, which can connect the influencer’s audience to products that align with their interests.
As a result of all these marketing tactics, many people are led to believe that an asset’s popularity correlates with its true value, which could prove to be false sometimes.
When the Product is Not Worth the Hype
As you may know from experience, sometimes the product you buy online is not what you expected, either because its quality is not up to par or the product is outright poor. As was said previously, reviews play a large role in how we perceive a product’s quality; however, many reviews can be fake, also called fake news, and can dilute the number of credible reviews. Fake reviews can be detrimental to some businesses or consumers, reducing the credibility of some businesses’ products, and misleading the consumer into thinking a product is better or worse than it actually is. From an economic perspective, this dynamic between consumer and vendor, or vice versa, is asymmetrical information, where one party possesses more information than the other.
These fake reviews can come in many forms, including companies paying people to write fake product reviews to boost popularity, or influencers promoting a product they don’t actually use. However, like most things, there are always solutions to prevent yourself from falling for these fake news traps that lead you to buy these products.
Conclusion
In a world filled with reviews, likes, and comments, relying and copying others’ behavior has become a more efficient way of shopping. Social proof is used today by consumers to facilitate decision-making, and by companies to attract consumers to their products; however, it can also distort and mislead consumers’ perceptions with asymmetric information. By understanding these economic and psychological concepts explained in this article, you can better navigate markets more critically, and buy items that you need and will enjoy.
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