Product turnover is defined by the frequency at which a company can sell products. The rate that brand is able to perform turnover signifies how popular a product is or isn’t. This data can illuminate a number of insights, such as:
- Product pricing updates
- Necessary changes to manufacturing volumes
- Whether promotions should be used to sell off overstocked items
For the majority of brands, as few as 20% of their products are responsible for 80% of the product turnover. The leftovers are commonly known as long-tail inventory. While the most attention will be given to your top-selling products, items outside of this group can have a greater fate than that of collecting dust. By leveraging social proof, they can actually be profitable.
Social proof, powered by Session AI’s in-session marketing, enables visitors to discover more of the product catalog by combining best sellers with other inventory that is similar, complimentary, or bought by those who also purchased the popular item. Retailers are dealing with overstocked inventory as consumer behavior recently shifted from goods to experiences — turning previously in-demand items into stagnant stock.
“There’s probably 20% of inventory if you could just wish away and make it disappear, you would.”
John Furner, CEO and president of Walmart U.S.
Even those consumers who are looking to purchase products are doing so at a lesser rate due to inflation and price increases. Social proof can nudge these cautious consumers to checkout by creating confidence in their purchase through reviews, fear of missing out with limited inventory warnings, popular item messaging, view counts, and more.
What is social proof?
Consumers read 10 online reviews before making a purchase decision. In essence, social proof is highlighting these reviews so that shoppers can make informed decisions based on the buying behaviors of others.
“When you say it, it’s marketing. When they say it, it’s social proof”
Andy Crestodina, co-founder of Orbit Media
Social proof can lead to ecommerce visitors jumping on trends, buying products, and discovering items they may not have otherwise. That’s because social proof gets consumers to adopt different behaviors than normal by using the influence of others to shape their purchase decisions.
More than reviews, social proof also includes real-time shopping behavior, pricing comparisons, and urgency messaging.
Why is social proof effective?
Social proof builds trust, credibility, and authority as consumers see that what’s being marketed on the ecommerce site is the same that’s being delivered to other buyers. This equity is more valuable than anything a brand can create internally. According to Econsultancy, customers find product reviews 12 times more reliable than vendor product descriptions. And Popupsmart found that online product reviews can increase sales conversions by 270%.
Social proof isn’t limited to popular inventory. Messaging can also be used to shift attention to overstocked items. When executed on a holistic level, social proof is able to shine a spotlight on both the in-demand and slow moving inventory — without relying on margin-draining discounts.
Social proof strategies
In his book, Influence: The Psychology of Persuasion, Robert Cialdini said, “we view a behavior as more correct in a given situation to the degree that we see others performing it”. This is the overall ideology behind social proof.
While the idea behind social proof is simple, many ecommerce sites are not fully able to realize its benefits due to technological limitations.
Here are the more complex variations of social proof that require real-time automation to effectively execute.
By popular demand: Number of PDP views
Seeing the number of views a product description page (PDP) has collected within a certain timeframe helps visitors quickly identify which products are trending. More than providing the social proof that the item is coveted by many, the number of PDP views can trigger a reaction in the consumer to purchase now as the item may soon be out of stock.
You’ve got great taste: Products added to cart
In a real-time world brands need to offer real-time social proof. Using in-session marketing enables ecommerce sites to display the number of people who purchased a particular item within a designated period.
This can be done either at a local or national level to provide social influence that others are buying this product, so the current visitor should consider doing the same.
Selling fast: Products checked out
People looking at an item or the number of items sold is an example of ‘popularity’ messaging. This plays on the consumer’s desire to stay trendy or get validation for their purchase by selecting items that other people also like.
Not enough to go around: Product scarcity
Fear of missing out extends beyond experiences as the urgency of seeing a limited number of products in stock has been shown to dramatically improve conversion rates. However, if done without real-time data, leveraging product scarcity as social proof can backfire as brands with static urgency messaging come off as untrustworthy to consumers.
You’re getting a great deal: Lowest price
Price sensitivity has increased among consumers, making the lowest price a major factor in deciding what brands they shop from. Showing that the product is at its lowest price in a specified timeframe empowers the consumer to more confidently complete checkout knowing that today’s purchase is the best buy.
Can’t Be Beat: Competitive pricing
Consumers are more likely to make a purchase if they can readily see that it’s competitively priced. Brands can scrape a competitor’s website and pass that SKU price along to Session AI’s in-session marketing platform to create a dynamic comparison.
Every brand is dealing with the same struggle of having too much inventory after a period of unexpectedly high consumer demand. Now that the purchasing power of customers is limited due to rising inflation and uncertain economic conditions, retailers are exploring new methods to move products.