Let's Play Shopping! Why use Gamification in eCommerce?

Gamification is the application of game principles like challenges and rewards in non-game contexts like education and shopping.  Using gamification it becomes easy to target, engage and convert your prospective buyers because of the human nature to compete, win and get fame.

The effectiveness of gamification can be attributed to the human psychology. As humans, we all are inclined to chase quick rewards and recognition. Gamification in businesses uses this fact to create an environment to challenge the end user and entices them to take the desired action by showcasing some reward. Many industries like finance, education, and e-commerce are actively using gamification to increase buyer retention and revenue by building engagement.

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Need for Gamification in e-Commerce:

According to Harvard Business School, an increase of 5% in customer retention can increase revenues by 25 to 95%. This figure plays a much more important role in e-commerce. A typical e-commerce store earns 43% of its revenue from returning customers. At the same time, according to Monetate eCommerce Quarterly research, only 1% of those customers that were acquired during the Q4 2015 holiday season returned to the same site in December 2016. Retaining existing buyers is one of the key challenges for eCommerce due to excessive competition and higher demands from customers. By leveraging gamification for increasing buyer retention, eCommerce companies can massively reduce their churn rates.

How to plan Gamification for your eCommerce store?

The gamification in a website can start with a simple “deal of the day” to complete user generated content mechanisms. In order to successively implement gamification, you need to follow the right approach as described below-

1. Identify your objectives:

You need to identify your goal before creating your game. Whether you want to build your brand’s presence on social media, ease the buying process, ignite lead flow during the off seasons, build traction during peak seasons, conduct bids, increase quick turnovers etc. - You need to identify it. One action triggering gamification should lead to only one call-to-action. This ensures clarity to the user and the web designer both, leading to better engagement.

2. Decide the challenge:

The next step to building gamification for eCommerce is deciding the way you are going to challenge your buyer. It could be a race to avail a limited period offer, a target of social media shares to earn coupons and a lot more. The challenge must align directly to your objective and should trigger the desired action.

3. Present the Reward:

No game is complete without the reward. Be sure not to crush your buyer’s expectations while giving them their prize. It is important not to lose your buyer’s trust as this will turn your strategy upside down. The reward should make them happy, encourage social sharing, lead to customer retention and meet the complexity of the challenge.

Know more about designing a complete gamification app.

Examples of gamification in eCommerce for increasing buyer retention:

1. eBay’s auctions:

eBay used gamification to ease the process of bidding in e-auctions. To simplify the process of bidding for busy buyers, eBay used gamification in its bidding process. The concept of bidding in itself is a game and with the addition of ease in the bidding process, your ability to take up the challenge is made easy. When you finally buy, you get a feeling of winning even if you pay more than expected.

2. Nike’s winter’s angry campaign:

Nike designed a game to create demand for its winter sportswear. Potential consumers were given the ability to create avatars of popular sportspersons and then take part in online versions of outdoor games after selecting their favorite Nike winter sportswear. The aim was to sell the sportswear preferred by some notable Nike athletes during the process.

3. Starbucks - My Rewards program:

Starbucks introduced a customer loyalty program to improve customer retention . Every Time a customer purchases a Starbucks coffee they receive some loyalty stars that could be redeemed for free coffee, birthday gifts, and personalized offers. This led to 26% increase in profits and 11% rise in total revenue. This also increased the usage of their mobile app for mobile purchases & payment.

4. Woot:

The online shopping site WOOT offered a deal of the day to turn their buyers into daily customers. Woot introduced a daily deal offer with a deal of the day at 12:00 AM Central Time. The deal consisted of a unique product available for a competitive price but in a very limited quantity. This brought a challenge for the buyer to rush through the checkout or miss the opportunity. This led to a lot of engagement on their site and increased the number of of returning customers.

So what are you waiting for? 

Like you may have seen, many eCommerce companies are leveraging gamification to increase their customer’s lifetime value (LTV) and reduce their churn rate. For a business generating most of its revenue from online sources, it is crucial to take a step ahead and deliver the kind of user experience that exceeds your customer’s expectations. Gamification in eCommerce offers a wide range of possibilities to improve buyer retention and stand out from competitors.

Download the complete handbook on leveraging the power of new technologies in eCommerce: