Impulse Buying Alive and Well at Retail

Discussion
Apr 07, 2009

By George Anderson

It may be that consumers are clipping coupons
and making shopping lists that they stick to more closely than ever before.
But, new research claims, it is also true that almost all shoppers go off
their lists to make unplanned purchases.

According to the research conducted by Miller
Zell, nearly two-thirds of consumers make shopping lists before going to
the store. Once in the store, roughly 90 percent make a decision to buy
something on impulse.

Curt Johnson, SVP for Miller Zell, told Marketing
Daily
, “We
were surprised. Because while we’ve been hearing so much lately about
how careful shoppers are being, making lists and doing research on purchases
beforehand, there’s still a lot of impulse buying.”

The group most likely to
make unplanned purchases is Gen Y, which is particularly drawn to advertising
messages (in-store and out) and end-caps.

“People
talk so much about this generation researching everything online before
they buy it,”
Mr. Johnson said, “but this study showed that they actually index much
higher than other age groups in terms of finding all advertising — both
in-store and outside the store — as ‘very effective’.”

“Gen
Y is, in fact, a lot more malleable inside the store than many marketers
think,” he added.

Discussion Questions: What do you take from
the Miller Zell research in terms of what retailers can be doing inside
and out of stores to drive unplanned purchases with Gen Y and other demographic
groups? What in your experience are the most effective tactics for driving
unplanned purchases in (you name the channel) stores?

Please practice The RetailWire Golden Rule when submitting your comments.

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19 Comments on "Impulse Buying Alive and Well at Retail"


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George Whalin
Guest
George Whalin
13 years 1 month ago
Research is an amazing thing. Just about the time some company comes out with a study that says consumers don’t actually buy much on impulse, another refutes that claim. All one has to do is observe consumers in stores and it’s easy to see how often they stop at a display or fixture, pick up an item and put it in their cart, basket or simply take it to the checkout. As a frequent observer of shoppers, it is today and always has been apparent that some consumers make and adhere to their shopping list. But a far greater percentage either go off their list and buy things on impulse or don’t make or adhere to a list at all. I recently watched a man enter a store, take a quick look at his list, shove it in his pocket and go through the store buying whatever caught his eye. Any retailer who isn’t investing more time and effort at improving their merchandising, featured displays, signage and the overall shopping experience is missing an important… Read more »
Robin Brown
Guest
Robin Brown
13 years 1 month ago

To be honest I am surprised Miller Zell released this.

The survey is based on recalled response to attribute statements and questions about general behaviour. To really understand impulse purchasing and the influence of point of sale communication you need to capture shopper behaviour in the store.

The full release says “And while many tout the importance of price point messaging at the shelf, Miller Zell’s analysis found that this was age-sensitive. Baby boomers, as an example, still prefer product messaging (93 percent rated this very or extremely important) to price point messaging (86 percent)”

Drawing those conclusions from those kind of responses is a little tenuous.

Max Goldberg
Guest
13 years 1 month ago

Is anything in this research surprising? No. Consumers of any age make shopping lists and then purchase something that is not on the list. The real question is, how much are people deviating from their lists? Is it one item or 50% of their cart?

Cathy Hotka
Guest
13 years 1 month ago

BE IN STOCK. Several major research projects have shown that retailers lose 20% of sales due to out of stocks. When the mom who’s shopping for kids’ cleats sees a cute cardigan but finds that it isn’t available in her size, that sale was just lost. In recent years we’ve seen very clear evidence that sales lifts are there for the taking, if retailers can organize around business intelligence and a in-stock targets.

Robin Brown
Guest
Robin Brown
13 years 1 month ago

This survey baffles me. 90% make impulse purchases? When? How often? Ever? If that’s the case then the most surprising finding is that 1 in 10 do not make impulse purchases.

This whole debate is somewhat false and is not helped by generalisations. Impulsivity varies enormously by category and channel. Of course it still exists.

Dave Allen
Guest
Dave Allen
13 years 1 month ago

It would seem to me that this is simply a study on a very old and very applicable foundational sales rule: “location, location, location” no matter what you are trying to sell.

Pradip V. Mehta, P.E.
Guest
Pradip V. Mehta, P.E.
13 years 1 month ago

The most effective technique, from consumers’ point of view, in driving unplanned purchases is offering a unique product and creating a feeling on the part of the consumers that if they do not buy that item then, it will not be available later on. Costco, H&M, and Zara have mastered this technique. No matter how many times I have decided I will not buy something that I do not need or is not on my list, every time I have gone to Costco I have ended up buying something that was on impulse!

Bill Bittner
Guest
Bill Bittner
13 years 1 month ago
There are a variety of methods for encouraging impulse purchases. Probably the most subtle would be to place your store near an interstate exit where after work shoppers are likely to stop on their way home and their hunger pangs will drive their purchasing decisions (never go into a grocery store hungry). Otherwise, end displays and front end promotions can cause unplanned purchases. Of course, easy payment methods and the acceptance of both credit and debit also help. Recalling that the buyer may not be the consumer, put candy and breakfast cereals at child eye level. And of course, that big bright produce department at the entrance can entice adults. I am not really surprised by the findings of this survey. It makes sense that lists are being used more often, if only to avoid the need to make multiple trips because something was forgotten. It also makes sense that people still make impulse purchases in a Supermarket, because most items there are a lot cheaper than a big screen TV (although they are coming… Read more »
Warren Thayer
Guest
13 years 1 month ago

Nothing much new I see here. Younger people are more likely to respond to high-tech promo innovations that are coming on strong. Personally, I like how my local Walmart has put small free-standing displays of random impulse items in the middle of high-traffic, ‘main passageway’ aisles. I’ve actually gone from seeing it as an intrusion to paying attention to each display as I go by, as so often I’ll see something not on my list, and grab it. Hot prices don’t hurt, either.

David Zahn
Guest
13 years 1 month ago

A definition of terms is required before any sense can be made of this “finding.” When it reports that shoppers create a “list”–is that down to the SKU level or does it simply say, “detergent?” Does it say “Dinner for Thursday” or does it say “Dole Pre-packaged salad, Campbell canned tomato soup, Perdue Chicken breasts, Green Giant Asparagus, and Breyer’s ice cream?”

Impulse purchases can be small deviations from expected or projected purchases or wholesale acquisitions that were not even considered. Which is this?

Impulse is not dead at all–but what is being purchased on impulse may be different. It may be a trade down from beef to pork to stretch the family budget, it may be purchasing a pasta sauce that had never been purchased before and was not even considered until the display next to the 10 boxes of pasta for $10 came into view.

Doron Levy
Guest
Doron Levy
13 years 1 month ago
Impulse buying in retail? Since when? I’m being sarcastic because if a merchant needs this report to see that impulse buying is alive and well and necessary, that merchant should get out of retail because they are lacking basic essentials in becoming a successful merchant. Of course impulse buying is alive. It’s human nature. We are not changing our evolution because of the recession. If it’s in a bright, shiny package at an attractive price, it has to be put up by the cash or other high traffic area. Those shopping lists that people are making consist mainly of low margin staples. How are we gonna make money off of that? Impulse has always been the way to go for retailers. It’s how you build your basket and margin. Walmart does a really good job of making money on impulse. If you look carefully at the cash lanes, you will see an optimization program working. Look at the rows and the tags. You may find a missing tag within the store but I you will… Read more »
Raymond D. Jones
Guest
Raymond D. Jones
13 years 1 month ago

This is not at all surprising. A typical shopping list focuses on key meal planning items and known replenishment needs. This is typically a list in the range of a dozen items or less. When you consider that shopping baskets often contain 20-30 items, it is apparent them many of these items were not planned.

Our Front-End Focus research on checkout purchasing further demonstrates the power of impulse. We found that about one in six shoppers buys an incremental item at the checkout after they have finished shopping the store aisles. This conversion number is higher the longer they were shopping in the store and the more they have in their basket already.

Many retailers do not have a strong impulse merchandising program and fail to realize their full potential in impulse sales.

Ted Hurlbut
Guest
Ted Hurlbut
13 years 1 month ago

To me, the key point for smaller retailers is that regardless of the state of business, customers will make impulse purchases once in a store. In a downturn, those unplanned purchases may be more practical than in better times, but there remain opportunities to add to the basket.

The key for smaller retailers is to distinguish between impulse items, and maintain compelling assortments of them, and tangential items or programs, where demand may fall off significantly in a downturn, and which need to be scaled back accordingly.

John Crossman
Guest
John Crossman
13 years 1 month ago

This is all about knowing your customer. If you do, you can provide the right opportunity for them. Publix does a great job at this with the items that appeal to families.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
13 years 1 month ago

The opportunity is for retailers to work closely with CPG manufacturers and create programs that drive consumers with shopping lists to their store. At the same time, strategically place savings programs in each department so the consumer can have the opportunity to impulse buy as they shop the store.

The real interesting question to ask is how many impulse dollars does an average consumer have? At some point, regardless of the deals, the consumer is going to walk away. Knowing this could help retailers plan better and optimize their savings programs throughout the week or month.

Ron Larson
Guest
13 years 1 month ago

A useful finding from this study is the list-making may have increased with the current economic troubles. Marketers need to think of ways to get on the lists.

Edward Herrera
Guest
Edward Herrera
13 years 1 month ago

As America weans itself off the credit crack, they have a moment of clarity and realize things have to change. I think some customers are still in denial about their purchase behaviors so I don’t believe we have seen the true complexity of buying patterns.

This article fosters more questions than answers. How much disposable income do my customers really have? To the first point, are there now limits to the amount of impulse that can be purchased per trip? Are there fewer unplanned trips to retailers as recreation and entertainment vs. need? Of the 90% impulse, how does the customer arrive at those decisions and why? What are the triggers? Etc….

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
13 years 1 month ago

Did we really need “new research” to understand that “almost all shoppers go off their lists to make unplanned purchases?” Who believes that we are currently, or ever have been, a nation of list-shoppers?

The most effective impulse shopping strategies are “surprise shopping” (Costco, Sam’s Club, Waccamaw Pottery, etc.), product demonstrations & sampling (Costco again, Home Depot, supermarkets, etc.), unadvertised specials, and displays. These would be tactics, except that to these retailers and others they are integral, long-term, essential components of their marketing plans with specific ROI figures attached to them. So, they’re usually strategies.

Bruce D. Sanders, Ph.D.
Guest
Bruce D. Sanders, Ph.D.
12 years 11 months ago
I agree with Ron’s comment that list making may have increased with the current economic troubles. A couple of years ago, findings from a study by Yuval Rottenstreich (Duke University), Sanjay Sood (UCLA), and Lyle Brenner (University of Florida) indicated that making out a shopping list at home in itself increases the probability of impulse purchases once we arrive at the store. Their explanation was that creating the shopping list requires remembering what’s available on the shelves and racks, so this consumes mental resources which are then not available to head off “Ah, what the heck” choices when we walk the aisles. But here’s another explanation that I think is more fun: Those of us not accustomed to making out a shopping list feel truly righteous when we do it, so we allow ourselves some devilish mischief while we’re checking off the list at the store. This fits in with the observation that the current generation of indulgence-accustomed shoppers is looking for inexpensive comforts during this economic downturn. And indeed, the Duke-UCLA-University of Florida researchers… Read more »
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