What do FOMO and marketing have in common?
A lot actually. Scroll through any social platform, email inbox, or website today and you will find brands leveraging FOMO as a reason to make a purchase. But why does this tactic work?
FOMO stands for “fear of missing out”, a feeling that most people can relate to and one that can be applied to almost anything. At the most basic level, using FOMO in marketing comes down to leveraging psychology to drive a desired action, namely, make a purchase. It is also linked closely to another psychological phenomenon: loss aversion.
What Is Loss Aversion?
Loss aversion is the concept that humans feel losses more strongly than they do gains, and that they are more likely to take action to avoid a loss than they are to make a gain. For marketers, this means that in some cases, framing the product in terms of what the customer will miss from not purchasing may be more impactful than the actual benefit of the product.
Think of an advertisement from a music festival or concert and consider how often these types of advertisements include the phrase “don’t miss.”
“Don’t miss the biggest party of the year”
“Don’t miss this artist’s newest hits”
Don’t miss out.
For physical products, loss aversion can come in many forms. Brands can leverage scarcity (limited quantities available), timeliness (get it first), product price (limited time sales), or universal desire (everybody wants one or has one). They may also facilitate loss aversion by activating the endowment effect.
How the Endowment Effect and Loss Aversion Drives Sales
We recently explored the impact of the endowment effect on commerce, which is driven heavily by loss aversion as buyers are unwilling to give up something that they have made a connection to. That connection can be formed by simply engaging with a product and imagining how the product will add to their life, or by allowing customers to have an experience in which they actively design the product, therefore making it their creation.
Once a customer has that sense of ownership, they are likely to place a higher value on the product, which means that if they were to give up the chance to purchase the item, the loss that they would feel would be even greater than if they were to walk away from a product that they had no connection to. Even though not purchasing the product gives the customer the gain of not parting with money, there is a strong chance that the positive feelings associated with that gain do not outweigh the disappointment felt from the non purchase.
Creating that sense of ownership is a tactic that has long been employed in retail settings. Car dealerships encourage longer test drives to give buyers a feel of owning the car, while sales associates at boutiques assemble full outfits to allow a shopper to imagine how they will wear a piece and how it will complement the rest of their wardrobe. The more time someone spends engaging with a product, the more likely that a sense of ownership is created, and the opportunity for loss aversion to come into play.
But what about online shopping? How can brands drive more engagement with their products to create a sense of ownership? By providing an immersive experience that engages a buyer’s attention and their imagination.
How 3D Commerce Drives More Sales
The most engaging online experiences are generally those that allow for product customization, where the shopper is helping to create the final product by making selections that fit their needs and wants. For products that offer this type of customization, 3D visual configuration drives higher engagement on the site by putting the shopper in the driver’s seat to explore options, compare designs, and make purchase decisions. 3D visual configurators allow shoppers to engage with and explore the product in many of the same ways as they would in store, as well as selecting the options and add ons that generate the most value for their needs. As they engage and design the product to their liking, the item in their cart becomes less like a stock product off the shelf and more like their own personal creation - and there is the sense of ownership we were looking for. An option as simple as viewing and choosing a color can initiate this feeling, and encourages shoppers to spend more time exploring and engaging with the brand.
What about products that don’t allow for customization? A product visualizer delivers the same immersive 360 experience that drives increased engagement and ability to view the product in detail as a 3D configurator, but does not require the same investment in building the configuration options. The most important aspect of leveraging 3D commerce is allowing the buyer to fully engage with the product and appreciate the details that would be missed by using other ecommerce tools. Both 3D configurators and product visualizations can be used in tandem with augmented reality to complete the highly engaged shopping experience.
Using 3D to Sell More
3D commerce drives higher engagement, increased customer satisfaction, and more conversions than traditional photography and videography by optimizing the shopping experience for creating a sense of ownership and portraying the product as a must have item.
Buyers don’t want to miss out on their perfect fit, so it is time to show them just how to find it.
Ready to try out visual configuration? Check out our 3D configuration demos below.