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(C) Karolina Grabowska on Pexels

How digital design changes customer decisions

Sector: Charity, Financial

Team: Ruth, Sechele, Owain

Partner: Citizens Advice

Literature review

Simulation experiment



How digital design changes customer decisions

We created a product simulation experiment to test how different designs of online checkouts influence the payment methods chosen by customers, looking in particular at Buy Now, Pay Later.

The Challenge

Online shopping offers customers a smooth, simple way of making a purchase. But Citizens Advice, the charity that offers confidential financial advice to millions of people every year, is concerned that some firms are designing online platforms in ways that act against the interests of customers. Citizens Advice therefore commissioned CogCo, working with Paul Adams, to devise an experiment that tested what the effect of different aspects of digital design had upon the choices and comprehension of customers. They were especially interested in the effect of different digital designs upon consumers’ decisions to choose to pay using ‘Buy Now, Pay Later’ products. These products enable customers to delay payments into the future and now account for 6% of all online purchases in the UK.

The Approach

We started by conducting research to enable us to understand existing product designs, and the cognitive biases that might affect consumers’ decisions in online environments. This included a literature review; a review of typical 'Buy Now, Pay Later' product design features; and expert interviews. We used this research to design a study in which we tested the effect of different design features upon customers’ propensity to pay with Buy Now, Pay Later products, rather than a debit or credit card.

The study took the form of an online randomised controlled trial in which we set 2,000 participants a hypothetical shopping task. This required them to purchase a pair of trainers using their preferred method of payment (debit or credit card versus 'Buy Now, Pay Later'). Our participants were randomly assigned to one of the four different prototypes of an online retail app, each of which was configured with slightly different features. This would enable us to see whether the different design elements changed the payment choices that people made along the way; and had an influence upon their comprehension of the different payment options.

The first version of the app was as close as possible to what you would typically find in an online checkout. It included brightly coloured branding for a fictitious 'Buy Now, Pay Later' product, which was accompanied by in-app marketing. This became our ‘Control’ condition (see below).

Figure 1: Screenshots from the control

(C) CogCo

The next of our four prototypes included more information about ‘Buy Now, Pay Later’ terms and conditions (‘Disclosures’). The third had the same extra information, but displayed it as a pop-up at the point of purchase (‘Pop Up’), which it was felt was more likely to be noticed by participants. The final version (‘Combined+’) included all the extra information from the Disclosures and Pop Up conditions. But it also removed the colourful branding and in-app marketing (see the comparison in Figure 2 below, which shows the payment screens of the Combined+ and the Control conditions).

Figure 2: Comparison of Combined+ (left) and Control (right) conditions on payment screen

After the participants had completed the task, we asked them a set of comprehension questions, to ascertain whether they had understood the terms and conditions that they were signing up for.

The Result

We found that the design of the prototypes did indeed have an impact, but in different ways. The Disclosure, Pop Up and Combined+ conditions all helped to improve participants’ comprehension of what they were signing up to. Participants were more likely to correctly answer questions about the nature of the product, and whether late fees would be applied if payments were missed.

Figure 3: Proportion of participants choosing to pay by 'Buy Now, Pay Later'

(C) CogCo

But it was only the Combined+ condition, in which the extra branding and in-app marketing had been removed, that affected the proportion of participants choosing to check out with buy now pay later products. And here, the effect was quite substantial: a 35% reduction. The results of the study have been used by Citizens Advice in their report on digital design, helping them to demonstrate that ‘design isn’t neutral - the way choices are presented to consumers … has a significant impact on what choices they make’.

“Our extensive experimental research has demonstrated that bad designs can be replaced with better, more consumer-focused design features which help people to make fully-informed decisions when using Buy Now, Pay Later”

-Citizens Advice

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