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Just One More Dress, I Promise!

By Devika Mathur, Edited By Niyanta Desai

Source: 3 Behavioral Economics Principles Every Online Shop Must Master. (n.d) INC.

Have you ever purchased a pair of sneakers just because your favorite influencer wore them? Or a dress just because their social media feed was too aesthetic? Well, you are certainly not the only one!

According to a GlobalWebIndex study conducted in 2018, 54% of social media users browse social media to research products before making a buying decision. This brings us to introspect this question urgently: To what extent does social media influence and often, manipulate consumer behavior?

What is consumer behavior, you ask? Consumer behavior refers to “the mental and emotional processes and the observable behavior of consumers during searching for, purchasing and post consumption of a product or service (Engel, Blackwell & Miniard, 1990).

Before examining the broader topic of social media, and consumer behavior, it is imperative that one understands the process by which a consumer reaches the decision of purchasing a good.

The first step is need recognition. It involves the consumer recognizing a substantial discrepancy in their current state of satisfaction and observing the need for a certain product.

The second step is information search, wherein the consumer researches about the various relevant products that could potentially satisfy the need aroused.

This is usually followed by an evaluation of alternatives. When the consumer has generated their interest in a certain product they then proceed to evaluate various alternatives for the same. This can be based on two types:

Cognitive evaluation: When the consumer uses objective choice criteria.

Affective evaluation: When the consumer uses emotional reasons for evaluating the alternatives.

The fourth stage is the purchase decision. Once all the above factors are taken into consideration, the consumer makes the purchase decision. It could be either no buying, buying now, or buying later, depending on factors like motivation, personal and economic situation, the attitude of others, anticipated situations in the coming future, and unanticipated present-day situations.

The buying doesn't end here, and now comes the stage of post-purchase behavior. This is the stage where the consumer decides whether they are satisfied, delighted, or dissatisfied.

While the process of making a purchase consists of various steps, social media has successfully penetrated into most of these, impacting how consumers behave.

Talking of the first stage where the consumer is still recognizing their needs, various companies have evolved their marketing strategies in a way that helps the consumers recognize potential needs or re-evaluate an existing need. They nudge them to recognize needs they didn't even know they possessed, or in a more serious situation, generate false needs. Moving on to the next stage, this is the part where extensive advertising, blogs, and social media handles come to play. As the consumer reaches the third stage where they are evaluating alternatives, social media ads, reviews, influencers and social media handles of the companies direct the consumer. The fourth stage is when the motivation and buzz that organizations have created influences the consumer heavily. As a consumer reaches the fifth stage they are able to contribute to the socials of the company by providing apt reviews, driving in the right kind of audience.

Data suggests that the top 8 social networks drove more than 31% of overall traffic to sites

(Perilli, 2019). Now that we know that companies majorly benefit from the dominance of social media on a consumer’s behavior, let's know how smart marketers have been able to channel the brilliant minds of behavioral theorists to successfully incentivize consumers to buy products, and switch brand allegiances.

Hyperbolic discounting and creating (small) incentives

64% of online consumers wait to buy things until they go for sale! (Clootrack, 2020). Companies very cleverly curate their content in a way that suggests to potential buyers that there is no better time than to buy it.

Establishing social norms (FOMO)

The sudden urge to purchase something because it's trendy or because everyone has it is the exact emotion that brands play on. Around 49% of consumers seek guidance from social media influencers before making a buying decision (Clootrack, 2020).

Creating ads that don't feel like ads

A meme, or trendy post that has the tendency to communicate the complete details of the product, is more likely to catch your attention in comparison to a conventional ad.

NAVIGATING THE NEW DIGITAL DIVIDE: Capitalizing on digital influence in retail, a report by Deloitte Digital, released in 2014 reveals that consumers who are influenced by social media are four times more likely to spend more on purchases. In addition to this, the report states that shoppers are 29 percent more likely to make a purchase the same day when using social media to help shop before or during a trip to the store.

But what exactly compels the consumer to behave that way? The New Economics Foundation outlined some principles that helped us dive deep into the subject of behavioral economics. Of those, these are some of the principles that aptly explain the situation of social media’s influence on consumer behavior:

Other people’s opinion matters:

Our tendency to care about how we are being perceived in the eyes of others suggests that social media has a profound impact on our buying decisions.

We are creatures of habit:

The fact that social media has now become a part of our daily routines, it’s really unlikely that we miss the activity on these brands' handles.

We want to do the right thing:

A good social deed spreads on social media in no time, whereas, the consequences of any wrong-doing have been immense. This has compelled organizations and users to adhere to norms.

We act according to our self-image:

Almost all of us have a self-image that is reflected upon our social media handles, which are often ideal versions of ourselves, and that we wish to share with our near and dear ones.

We are more loss-averse than gain interested:

We are scared to lose an amazing, once-in-a-lifetime kind of opportunity. This is the same perception that brands aim to create in our minds for a certain product or campaign.

We are not very good with data:

Any commodity that seems to be on a heavy discount generates in us a willingness to buy the same. We fail to analyze if we actually require it, or whether it is economically valuable. Rather, we are driven by the ‘heavy discount’ and how many people have already availed the same.

We need to feel empowered to take action:

Despite the internet being a very crowded place, containing all kinds of commodities, artificial intelligence has helped numerous people feel empowered by analyzing their buying behavior and serving them with the products that they are most likely to view or buy.

All these help us in nearing the conclusion that this kind of behavior has existed for years and shall continue for years to come. However, it won't be wrong to state that social media catalyzes consumer decisions.


Beer, C. (2021, March 30). Social Browsers Engage with Brands. GWI.

Deloitte. (2014). NAVIGATING THE NEW DIGITAL DIVIDE: Capitalizing on digital influence in retail. Deloitte Digital.

Dragan, M.M. (2012, August). Behavioral Economics and Social Media. Netonomy.

Engel, J.F., Blackwell, R.D., & Miniard, P.W. (1990). Consumer Behaviour. Chicago: Dryden, ©1990.

Hickey, K. F. (2018, October 17). Behavioral Economics, Social Media, and You. EveryoneSocial.

New Economics Foundation. (2020, January 27). Behavioural economics.

Perilli, R. M. (2019, August 7). 50 online search and SEO stats to blow your mind. GoDaddy Blog.

Singh, R. (2020). Social Media and Consumer buying Behaviour: Issues & Challenges. International Journal of Engineering Research & Technology (IJERT).


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