Even though people tend to believe that they are in control of their lives and decisions, it is not always true. Individuals often make irrational decisions even without understanding them. Marketing experts are aware of this peculiarity and rely on specific techniques to force consumers to make particular decisions. For example, a consumer’s irrational behavior can be found when people deal with online shopping and only focus on items with free shipping. People often choose this option even if the same item with paid shipping can be purchased for lower prices. It seems that people think that free shipping is an advantage, but additional analysis is needed to discover the genuine rationale of this decision and understand how to diminish its inefficiency.
Sufficient scientific evidence can help understand why online shoppers tend to engage in this irrational behavior. Wattanacharoensil and La-Ornual (2019) stipulate that emotions, either positive or negative, control people’s decisions. Under the present conditions, when people witness a free shipping option, their mood is better because they believe that they have found a unique opportunity. In addition to that, heuristics can be used to explain the consumers’ behavior. According to Leković (2020), this term stands for intuitive methods of decision-making, which helps people save time and energy. Many individuals do not want to spend time and effort comparing identical items from different sellers. That is why they avoid making calculations to identify whether the cost of goods with a shipping fee is lower than the cost of goods with free shipping. Furthermore, one should admit that people tend to value free shipping more when they purchase low-value goods, even when fixed costs are applied (Doces & Wolaver, 2021). Even though people should value fixed costs equally, individuals consider free shipping more valuable when they are forced to spend little money.
It is possible to state that these consumers are prompted in a particular way, which makes them behave irrationally. A video by TED (2009) offers a similar example when the amount of organ donation program participants depends on how the invitation form is designed. In the video, people were asked to check the box if they did not want to participate in the program. As for the example of free shipping, people need to spend time and effort to identify the most attractive option. In both cases, it seems that the people who were in charge of developing the options have already made decisions on behalf of customers. In online shopping, a free shipping option is an effective trigger that forces individuals to choose a particular product without any doubt. This information demonstrates that the presentation of goods impacts a consumer’s decision.
In conclusion, people are subject to irrational behavior, and the present assignment comments on online shoppers. Their obsession with free shipping leads to irrational decisions when individuals voluntarily agree to pay more for a particular item when they can purchase it at a lower price. A free shipping option is considered a significant advantage that evokes positive emotions making individuals behave irrationally. Furthermore, heuristics results in the fact that people want to save time and effort, which makes them avoid comparing products and their costs. This information demonstrates that the presentation of goods in marketplaces contributes to the problem. Consequently, it is possible to highlight the total prices, including a shipping fee, to help shoppers see the difference in prices and make more reasonable decisions.
References
Doces, J. A., & Wolaver, A. (2021). Are we all predictably irrational? An experimental analysis. Political Behavior, 43(3), 1205-1226.
Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.
TED. (2009). Dan Ariely: Are we in control of our decisions? [Video]. YouTube.
Wattanacharoensil, W., & La-Ornual, D. (2019). A systematic review of cognitive biases in tourist decisions. Tourism Management, 75, 353-369.