AI and behavioral economics driving optimised conversion rates

AI and behavioral economics driving optimised conversion rates

The objective

How to turn shopping carts into sales: AI-driven conversion optimisation of online store shopping carts

The number of abandoned shopping carts in online retailing is exceptionally high. Depending on the sector or branch, the share of shopping cart abandoners stands between 60 and 80 %. This phenomenon burdens conversion rates and costs retailers billions worldwide.

 

If your company is also looking for ways to prevent shopping carts from being abandoned and would like to implement conversion rate optimisation, you will find seasoned and specialised experts on our KPS User Experience Team. We perceive the user experience as a success multiplier and focus on User Driven Growth for your business success. We take a structured approach and bundle all the relevant methodological tools in the KPS UX Operating Model

Challenge

Billions lost in online retailing? A huge revenue opportunity.


Shopping carts filled and then left standing orphaned: According to statistics, online shoppers abandoning their carts accounts for global online retail losses exceeding $4 trillion in revenue in 2021. In almost 60% of the cases, visitors leave online stores empty handed, because they are only prepared to do some virtual window shopping, but are not willing to actually make a purchase. This group of shopping cart abandoners is difficult to influence. In all other cases, the reticence is due to mostly avoidable reasons why shopping carts are abandoned in the first place. Above all, this includes targeting and addressing users in a manner that is not sufficiently adapted based on context and is hardly motivating on top. Accordingly, it is worthwhile to apply the lever for conversion optimisation at this point.

Statistics of annual sales losses due to shopping basket abandonment.

The solution

How situationally adapted user targeting works.

Situationally adapted user targeting and addressing is anchored in the interaction context of the customer journey in multifaceted ways. It is derived from product features, marketing campaigns, the visitor's click behavior, and - if the customer is logged in - from existing customer information. The technological challenge is to correlate customer data in such a way that individually effective and psychological buying incentives can be deployed precisely in the context of user interaction. This is a task that is ideally cut out for AI algorithms - especially in eCommerce.

Harnessing AI and behavioral psychology in eCommerce

Conversion Rate Optimisation

Harnessing AI and behavioral psychology in eCommerce

In cooperation with its partner behamics, KPS takes account of the insights of behavioral economics in guiding user interaction and optimising conversion rates with the help of AI-driven triggers. Pivotal here is the design of a personalised customer journey that considers the fact that buying behavior in online stores is subject to social and normative influencing factors. AI enables us to draw from an extensive pool of scientifically developed triggers to deploy precisely those that have a purchase-motivating effect at a given point in the customer journey. This is a groundbreaking procedure that has already proven itself in actual KPS practice.

KPS Partner behamics

AI technologies and the principles of behavioral economics.

KPS works with its partner behamics to integrate the intelligently steered targeting and addressing of users into complex UX models. Self-learning algorithms interpret the multi-layered customer data during user interaction and draw conclusions about visitor behavior that flow back into the database. The expanding reservoir of data is related to scientific findings in behavioral economics. Based on this, the behamics AI determines the psychologically effective purchase incentive, which is deployed depending on the context so as to optimize conversion rates.

AI and behavioural economics in e-commerce

blog

Where do the orphaned shopping baskets at checkout come from?

Technologies make eCommerce easier, more personal and more profitable. How does a highly individualised customer approach improve the buying process and support customers in their purchase decision?
Joining forces for better conversion rates and sustainability | behamics

News

Joining forces for better conversion rates and sustainability

KPS and behamics have been working closely together since 16 December 2020. Together, KPS as a management consultancy and behamics as a start-up combine their expertise in the field of eCommerce and optimise the customer journey. Through their synergy, they offer their customers an all-around package that includes the expertise of KPS and the technology of behamics. This creates a transparent and risk-free offer for companies.
Scientifically based 'nudges' benefit retailers and end customers alike

News

Scientifically based 'nudges' benefit retailers and end customers alike

Management consultancy KPS AG and start-up behamics are pooling their expertise in the field of artificial intelligence in e-commerce. Together, they enable retailers to optimally be with their customers every step on the digital customer journey, increasing conversion rates in the online shop and operating more sustainably by successfully reducing returns. AI-supported forecasts and scientific findings from behavioural psychology are used for this purpose.

Practical example

Higher sales and conversion rates for a Swiss sporting goods giant.

The example of one of the largest sporting goods retailers in the DACH region demonstrates the positive impact of a comprehensive KPS UX solution in connection with integrated, behavioral economics-based AI. The company achieved gains in conversion rates of between 5 and 10%, meaning that the sporting goods retailer generated between 8 and 12% higher sales. The holistically optimised customer journey proved the decisive factor, whereby the self-learning algorithms additionally provide sales-promoting incentives. Consequently, the number of abandoned shopping carts has dropped significantly and the rising conversion rate has improved the company's competitive position.

Holistic optimised customer journey

KPS & behamics

KPS UX for stronger conversion rates

KPS designs comprehensive UX models and seamlessly integrates behamics AI into a holistically optimised customer journey. We will accompany your UX transformation individually and precisely customize the best practices of the KPS Instant Platform to your requirements. In this way, you can quickly and reliably benefit from the advantages of behaviorally psychologically controlled customer targeting and addressing. In most cases, the integration of behamics AI takes less than a week , so you will quickly experience the effects of conversion optimisation.

KPS Operating Model Optimize

KPS UX Operating Model

KPS UX Operating Model: The framework for structured UX activities

The KPS UX Operating Model is a framework that comprehensively structures the UX optimisation process. The focus is on precisely tailored UX management. Starting from the business idea, this leads to the desired business goal in iterative steps. Four dimensions of action that complement and build on each other drive continuous transformation.

In order to effectively transform shopping cart abandoners to customers and optimize conversion rates, the full potential of incentive framing must be realized. In the process, we ensure unique synergy effects with our KPS Optimize Track by integrating services such as: 

  • Definition of KPIs to be increased from a business perspective
  • Definition of the most important funnels to optimize
  • Qualitative analysis of the status quo based on heuristic evaluations, usability testing & user feedbacks in order to derive optimization measures
  • Quantitative analysis based on web analytics data (customer browsing behavior)
  • Hypothesis generation for A/B and multivariate testing
  • Personalization design and implementation

Your advantages

Your decisive conversion advantages with KPS

The AI-driven and automated behamics solution is part of the conversion optimization within the KPS User Experience portfolio. The integration of behamics algorithms into your customer journey takes place by way of structured transformation, which is tailored precisely to your requirements on the basis of the KPS UX Operating Model. Your benefits:

Pictogram with stopwatch| Fast setup

Fast setup

A quick and straightforward setup that takes less than a week and entails a minimum of burdens on your internal human resources.
Pictogram with Artificial Intelligence | Smart algorithms

Smart algorithms

Self-learning algorithms continuously optimise their decision-making basis themselves, thereby dispensing with controlling interventions on your part.
Pictogram with magnifying glass | Transparency and control

Transparency and control

A dashboard enables you to track the success of the program and the uplifts generated by different triggers in different contexts.
Pictogram with pyramid | Personalised conversion optimisation

Conversion optimisation

A personalized approach with situation-dependent effects instead of the traditional test-driven conversion optimisation along the lines of "one solution size fits all".
Pictogram with database | Efficient database

Efficient database

A database comprising scientifically defined triggers that minimizes personalisation efforts as well as the time-to-market.
Pictogram with networked brain structures | Automated solution

Automated solution

An advanced, leading-edge solution that is still growing and evolving.
Pictogram with stopwatch| Fast setup

Fast setup

A quick and straightforward setup that takes less than a week and entails a minimum of burdens on your internal human resources.
Pictogram with Artificial Intelligence | Smart algorithms

Smart algorithms

Self-learning algorithms continuously optimise their decision-making basis themselves, thereby dispensing with controlling interventions on your part.
Pictogram with magnifying glass | Transparency and control

Transparency and control

A dashboard enables you to track the success of the program and the uplifts generated by different triggers in different contexts.
Pictogram with pyramid | Personalised conversion optimisation

Conversion optimisation

A personalized approach with situation-dependent effects instead of the traditional test-driven conversion optimisation along the lines of "one solution size fits all".
Pictogram with database | Efficient database

Efficient database

A database comprising scientifically defined triggers that minimizes personalisation efforts as well as the time-to-market.
Pictogram with networked brain structures | Automated solution

Automated solution

An advanced, leading-edge solution that is still growing and evolving.

Whitepaper Download

AI and behavioral economics: Advanced, up to the minute technologies for personalised marketing

Well informed, digital-savvy customers surfing the markets with considerable self-confidence are not easily won over by products and services. Nothing less than duly informative, relevant, personal and confidence-inspiring targeting and addressing are called for to convince customers and prospects of the relevant offerings. Companies will only be able to meet these high expectations if they succeed in using the personalisation tools with genuine confidence. 

But how can personalised targeting and addressing succeed and what are the characteristics of a convincing customer journey? We have summarised the latest strategies and technologies for optimising user interaction in a whitepaper.

AI and behavioral economics: Advanced, up to the minute technologies for personalized marketing

Find out more in our whitepaper:

  • why increasing conversion rates and reducing abandoned shopping carts is business-critical for your company,
  • which insights from behavioral economics help to leverage psychologically effective purchase incentives addressing the right users at the right time,
  • how to integrate AI algorithms into your marketing processes in a targeted manner in order to analyse consumer behavior and guide it in a purchase-motivating way - and in connection with situationally adapted incentive framing,
  • why transforming your marketing processes can be faster and smoother than you might think.

Contact

Get in touch and learn more about AI-based conversion rate optimisation!

With a current team of 25 experts, at least 100 different focus points in addition to the basic UX expertise and the combined experience of around 300 years in the digital sector, the KPS UX team is always at hand with consulting approaches, sound methodological setups, workshop formats as well as innovative ideas and concepts. So let's talk about your users - and multiply your business success!

Alisa Ziegenfuß

Alisa Ziegenfuß, Associate Partner

Expertin für User Experience und Requirements Engineering, Schwerpunkt eCommerce
Hamid Gazestani, Senior Manager

Hamid Gazestani, Senior Manager

Experte für User Experience und Design, Schwerpunkt ECommerce und Design Leadership

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