Buy It Now! Research on Impulse Buying and Ecommerce

This is a summary of articles found during cursory Internet searches regarding impulse buying and ecommerce.

A more attractive printable version is posted here at Docstoc.

Most of these are “newbie” articles because I lack marketing experience. This list has been filtered in based on quality. Star ratings ranging from 1 to 3 indicate perceived quality.

Most articles found were user-generated content, and focused on the topic of “how to avoid impulse buying.” They severely outnumbered explanations of how to induce impulsive shopping, so it appears that the retailers are winning, and the consumers feel relatively unable to resist. Only one of this type of is included as an example.

Impulse buying is defined as anything from a purchase that wasn't planned, to a purchase that someone felt compelled to buy, but felt regret or guilt about later. Impulse buying accounts for a significant fraction of sales, both in brick-and-mortar and online retail, ranging from around 20% to 40% of all purchases.

Impulse buying in brick-and-mortar stores is different from impulse buying online, as expected, but what they both have in common is “browsing”. Impulse purchases are made when a product is displayed to the shopper. While it is obvious that a shopper won't buy something he cannot see, both traditional and online stores often fail to design the floorplan or web-page to let the customer see more products as they look for what's on their shopping list. The “take away” point is that browsing environments must be created, planned, and maintained to encourage impulse buys.

Additional factors affect impulse shopping, but ecommerce web-sites are still relatively primitive, and they aren't all browseable yet.

Articles summaries and a list of articles follows.

How to Prevent Online Impulse Shopping *

  • Know your priorities.
  • Don't be distracted by sales.
  • Never use credit cards unless necessary.
  • Don't rationalize purchases.
  • Make a budget.
  • Don't be swayed by advertisements.
  • Get support – don't shop when you're down.

This article was kind of lame. How do you avoid using credit cards online? Also, online is actually not that good for impulse buys because there's no “there” there. I include it here only to give an example of a typical article trying to help people deal with impulsive shopping.

My tips for reducing online impulse shopping.

  • Keep bookmarks for online vendors who don't try to up-sell you with too many “related items”.
  • On Ebay, Etsy, Half, Buy and Amazon, keep lists of favorite vendors in your bookmarks. (They try to make this a challenge.)
  • Research purchases. This consumes time, and can feel good. The trade off is that you'll end up buying something eventually.
  • Feel happy before going shopping.

The Impulse Buy ***

Everyone feels guilty after an impulse buy, but people who are less likely to buy impulsively feel guilty about it twice as long. Impulse buyers felt guilt, but by the next day, felt good. The more prudent buyers were more likely to follow up their impulse with a practical decision. This decision is not conscious.

How Retailers Lure You to Shop and Buy **

Describes some psychological things stores do to lull you into shopping: music, aroma, entrance, flow (a maze of products). Refers to Paco Underhill's Why We Buy.

Why People Buy Green ***

“Light green” shoppers, who make up 89% of the market, buy green items out of curiosity. “Dark green” make up only 9%, and do research before purchasing. 39% of light greens made the purchase decision at the store, versus 20% of dark greens. 15% of light greens were motivated by learning about the product, versus 29% of dark greens. (The writing in the article is convoluted.)

Do You Buy on Impulse? **

40% of video games buyers purchased a game on impulse in the past six months. Impulse buys are purchased more often by the younger and older buyers, and they pay $27 for the game (compared to $42 for planned purchases). 43% of buyers said they paid $10 to $20 for the game. Lower prices induce impulse shopping.

How to Use Impulse Buying Behavior to Boost Your Bottom Line ***

  • Emphasize needs versus wants

  • Highlight good economy

  • Create confusing environment where they lose control

  • Provide flexible payment methods

  • Avoid making customer wait to purchase

  • Tell them to act now

  • Stress the emotional aspect of owning the product

This article seems to be good. It's by Chintan Bharwada, author of the Loyalty & Customers blog.

Impulse Toy Purchases *

This is a funny article worth reading for entertainment value. He says, “they play on our parental insecurities and they know that cost is not going to prevent us from purchasing our children’s happiness...” I suspect what they also get parents to purchase toys that they would want for themselves.

3 “Impulse Buy” Tactics for Membership Websites to Use in the Holiday Season *

  • Give the customer something to print out. This is something a person can gift to someone else.

  • Set a price for the gift-giver, not the recipient. It's the only time you can drop membership costs without upsetting existing members.

  • Make the website look nice – it reflects on the gift giver. Web visitors judge a site in the first 10 seconds.

12 Factors of Impulse – Natural Powers to Ignite Sales **

Status, curiosity, sense of urgency, fear of loss, sympathy factor (helping a cause), indifference factor (act indifferent), greed factor (competitive shopping), desire to gain, superiority factor, obligatory factor, limiting factor (limit number to purchase and people will buy more), “now factor” or getting things delivered quickly.

Brain-based triggers of impulse buying **

A neurological analysis of an impulse buy. Factors: loss aversion, immediate rewards, pleasure, diminished of willpower, beating scarcity and gaining the stamp of approval. Even if you understand the factors, you are still subject to their effects.

Impulse Buying Report **

A student group report from Pakistan, where private consumption expenditures have grown by 7.4% per year. (The average income during this report was only $925 per year per person.) Classifies types of impulse purchases. Notes effect of transaction size and shopping lists. Limited sample size, but results: > 20% impulse buy, women make more impulse purchases, larger shopping bill correlates with less impulse purchases. Snacks and frozen foods were popular impulse purchases.

Impulse purchase and e-commerce – Online Consumer Behaviors ***

This is an older paper from 2001 or 2002. 40% of online purchases are unplanned. 75% of buyers stated that the purchase was price-driven. Analysis uses the Consumption Impulse Formation and Enactment model (CIFE) by Utpal M. Daholakia, a model to understand impulse purchases. To create the ideal environment: category links, simple checkout, recommendation system, virtual checkout, product exposure, highlight feature products, bundles.

On the Negative Effects of E-Commerce: A Sociocognitive Exploration of Unregulated On-line Buying ***

An older paper from around 2001 by Dr. Robert LaRose, who specializes in media and telecommunications. This doesn't discuss ecommerce as much as psychological factors like addiction, compulsive behavior, and shopping. The ecommerce part seems dated.

See also: Media Now: Understading Media, Culture, and Technology

What causes customers to buy on impulse? **

2002 paper by User Interface Engineering. I think it's results are distorted by the fact the participants were given money. Shoppers think of things to buy as they shop. 87% of money spent on impulse purchases resulted from category navigation. The other 13% were from using search. Site searches narrow focus too much. Well designed navigation exposes customers to more products, resulting in more impulse buys. 2% conversion rate * has achieved a 2% conversion rate (meaning that 2% of people who click to that site via a paid ad purchase something). Industry average is 1%.

Some other pages and papers I haven't had time to read and summarize (this looks difficult, but has lots of data) (a presentation)