What makes you buy something on Amazon or eBay late at night? And what makes 98% of people who land on e-commerce sites leave without making a purchase?
Israeli startup Commerce Sciences endeavors to answer these questions. The goal is to open Web users’ wallets and buoy e-commerce sites’ sales.
The company, which has 1,000 e-commerce sites as customers, was established in 2011 by CEO Aviv Revach and Eyal Brosh, the chief operating officer and vice president for research and development.
In short, Commerce Sciences applies psychology and behavioral economics to the world of online shopping. Using methods developed by professors like Dan Ariely, the company enables site owners to tailor their products to encourage Web users to take out their credit cards.
“When we started we discovered that 98% of people who land at an e-commerce website don’t make a purchase, and 75% of them put items in their shopping carts but don’t buy them,” says Revach. “We tried to understand why this was happening and discovered that there wasn’t a single explanation.”
Some people forget their passwords, others worry whether the site is secure.
“Website owners are aware of users’ concerns, but it’s a one-size-fits-all experience,” says Revach. “They try to personalize the experience, but this is usually limited to a box of personalized recommendations. That’s nice – it’s good for users and improves sales – but it’s only the tip of the iceberg in terms of what can be changed on the website.”
So Commerce Sciences analyses users according to 40 parameters; for example, the sites they arrived from, the words they typed into the search engine and even the time of day. It turns out that nighttime users are thinking more about security features than daytime users. And some people want proof from other users before they make a purchase.
The user information is held anonymously. The company, which has 10 employees in Israel, built a profile of tens of millions of shoppers within six months of the product’s official launch.
As part of the behavioral-economics approach, Commerce Sciences can direct users with loaded shopping carts to checkout, while the personal toolbar on offer also offers relevant vouchers. The amount of code needed for such features is minuscule, but the results are impressive. According to Revach, Commerce Sciences increases sales by 10% to 30% and reduces the number of abandoned shopping carts by 20%.
The startup has raised $1.8 million from Eric Schmidt’s Innovation Endeavors fund and Israeli fund Genesis Partners. A raft of private investors have also invested in the company like Joe Lonsdale, the co-founder of Palantir Technologies and Addepar.