Okay, so you’ve read all about the Customer Journey and you know all the stages, right? Here they are nevertheless, for quick reference:
Nowhere however, is that little gem ‘Impulse buying’ really highlighted or showcased. Until now, that is.
What is impulse buying?
Definition of impulse buying
: the buying of merchandise on impulse rather than from premeditation (Merriam Webster).
In a nutshell, it’s when you can’t help yourself, you must have it. Something you haven’t planned (or generally budgeted) for…
While a habit to overspend or generally spend beyond your means is not to be encouraged, impulse buying has a very real place in the Customer Journey and a trend that can actually benefit the retailer.
Read on and learn…
Recall that time you were browsing the internet and scanning through the offerings of an online catalogue and something in the plethora of products caught your eye? Without even considering further, you tapped in your credit card details and the item was purchased and on its way to your designated delivery address before you could say ‘sold!’. Well, that my friend, was an impulse buy.
This type of purchase is spontaneous, made without any form of premeditation or planning and, unlike the Consideration phase of the Customer Journey, the purchase is made without any type of research to compare options or find a better deal.
It’s also the reasoning behind why checkout lines or pay points are crammed with inexpensive, but often high-margin items like sweets, chewing gum, cooldrinks, chips, biltong or other small but conveniently placed items, including lighters, batteries, notebooks and more. And, the curse to any parent, small toys at ‘kid height’!
For retailer impulse buying is one of the key engines for sales, therefore good merchandising and promotion strategies can leverage these apparently innate qualities and tendencies. However, to take full advantage of this trend, a little of the psychology behind the behaviour needs to be touched on.
What is behind the impulse buy?
There are a number of reasons behind the impulse buy, the main one is based on emotions, feelings and past experiences or ‘triggers’ — with the added consideration that the deal is a good one.
When we make an impulsive purchase, we get a feeling of satisfaction and/or enjoyment from making that purchase. This is attributed to a ‘high’ caused by a surge of mood-boosting dopamine coursing through our veins.
So too, when discounted items go ‘on special,’ FOMO kicks in (fear of missing out, for the uninitiated) and therefore consumers buy on impulse as they don’t want to regret not taking advantage of the offer at a later date. Psychologists call it the ‘loss aversion’ factor.
As a rule, consumers research purchases and conduct comparisons, especially if they are expensive items in play. With the choices and variety available at the mere click of a button on the internet, making the ‘correct’ decision can nevertheless, involve inordinate amounts of time and effort, making the process frustrating — and prolonging the consideration phase.
This is where ‘perceived value’ plays a part as people prefer easier buying decisions and thereby gravitate toward something that ‘appears’ to have value when they make their choice. Retailers are aware of this, hence implementing practical applications that leverage on this concept by employing tactics that include discounts, bulk promotions, package deals and gifts with purchase. All of these strategies can increase the value of a product purchase.
You see, time is money, which has its origins in our hunter-gatherer days of old, where stock-piling essentials ensured survival! So, when items or services are marketed as time or money saving, it ‘triggers’ an impulsive buying decision, little realising we are responding on a genetic basis!
Also, as consumers we really do believe that we have ‘savvy’ and we buy goods and services that support our current self-image and belief system!
Research shows that a couple of years ago, half of the purchases made by people 18-24 years old in the United States were impulse purchases. In addition to this, in a survey conducted among American citizens by SurveyMonkey, 89% of consumers admitted to having purchased something on impulse one time or another, and this rose during the pandemic, with the average American spending about $182 monthly on impulse purchases.
So, how can retailers (both brick-and-mortar and online) benefit from impulse buying?
While it’s nigh impossible to cover every eventuality or permutation, here are three quick pointers:
- The best impulse products are simple and inexpensive. (Ferraris don’t count here… well, not for we mere mortals.) What you must focus on is creating a sense of urgency (timing, limited offer etc) or a feeling that the offer is too good to miss (valuable discounts).
- Location, location. Consider carefully where you place the products so that the customers ‘come upon them’ perchance. This could mean placing them near more popular products/ items in the same category (eg camping/outdoor) or mentioning them closer to the checkout/trolley section. They must be eye-catching though! This applies equally to both on and off-line stores.
- Keep your target audience in mind and tailor your products accordingly, from fluffy toys at eyelevel to a grasshopper or car seat organiser in the auto spares section, to a dog toy in the petfood aisle for a brick-and-mortar establishment, or as pop-ups in those categories for online stores.
So, now that you are aware of what triggers impulse buyers, what are you still doing sitting here, reading this?