With E-Commerce Booming, Marketers Must Get to the Core of Consumer Responses

By Jeff Bander, Head of U.S., Eye Square

In early 2020, it would have been reasonable to argue that e-commerce was poised for rapid growth, even in industries that were historically brick-and-mortar mainstays. Amazon continued to make inroads in the grocery industry following its 2018 acquisition of Whole Foods, while other retail behemoths like Walmart and Target worked to shore up their online shopping platforms to compete on a greater scale.

Of course, the arrival of COVID-19 in mid-March turned a long-term trend into a five-alarm fire. In the year of shelter-in-place orders, mask mandates and social distancing, more consumers are turning towards online shopping than ever before. Even the most mundane day-to-day purchases have now migrated online, with services like DoorDash and Instacart bringing groceries straight to your home.

In our new shopping environment, which prioritizes distance and virtual connections to a previously-unthinkable degree, marketers are facing new challenges in assessing the efficiency of their advertisements. With every aspect of the sales cycle taking place in front of a screen, how can brands take note of customer interactions and the impact of their marketing efforts?

Shifting systems: Enter System 0

One of the most influential theories on how we understand advertising’s effectiveness is the idea of System 1 and System 2, recently made popular in Daniel Kahneman’s book, Thinking, Fast and Slow. To very briefly summarize, System 1 describes the brain’s most intuitive operations, through which decisions are made rapidly and without extensive consideration. On the other hand, System 2 is the more logical mode, through which the brain analyzes the many factors that go into making a decision.

But in a world where consumers are interacting with multiple screens at a time, ingesting hours of visual content each day, and taking less time to make purchasing decisions than ever before, we need a new system to describe what’s taking place in the mind of the consumer: System 0. In a world of instant reactions, System 0 cuts to the core of perception by analyzing pure, immediate reactions.

Research-based on System 0 depends on measuring consumer response in an authentic environment; because System 0 measures the consumer’s instant, unfiltered reaction to content, any alterations could skew the results. For this reason, advertisements must be tested and analyzed in their live environment to facilitate analysis by System 0. By testing advertisements in their authentic contexts on platforms like Amazon, YouTube and Instagram, marketers are given rich insight into the implicit responses and explicit behaviors of consumers. This information provides marketers with better prediction capabilities, empowering them to refine their advertisements for improved performance.

The insights provided by System 0 offer a more complete picture of the consumer than previous models which depended solely on Systems 1 and 2. The first impression—the moment of perception—is vital in any relationship, and it’s even more critical in an e-commerce environment comprised of clicks, swipes and glances. System 0 provides marketers with their most valuable information when conducting A/B testing, as consumer reactions can be easily quantified and analyzed using measurements of perception.

The need for live testing

As e-commerce platforms like Amazon continue to hoard market share, many online advertisers are reluctant to risk testing their collateral in a live environment, preferring to use focus groups and surveys to refine spots before releasing them into the world. With so much on the line in concentrated ad buys, any misstep could have an outsize impact on a campaign’s financial performance. However, testing based on System 0 proves that there is no replacement for live testing and that brands will be advantaged by using live A/B testing to develop truly effective advertising techniques and creative. When deployed in live environments, System 0 testing provides immediate, actionable information that has a measurable impact on marketing outcomes.

The proof is in the performance—companies that have chosen to test for perceptive responses in live advertisements have gained valuable information about where to invest their marketing budgets. For example, a recent Nike ad campaign leveraged System 0 in A/B testing to assess different perceptions when an ad was viewed on both Instagram and YouTube. The research found that consumers have a more positive immediate reaction on YouTube rather than Instagram, enabling the brand to shift their spending towards the more effective platform. As COVID forces more and more businesses to compete in the online marketplace, a well-rounded testing strategy incorporating all three Systems will be ever more important as a competitive differentiator and a key driver of success.