Online Impulse Buys Depend On Speed of Delivery
The best ways and means of encouraging impulse purchases provide endless hours of discussion for retailers. According to Knowledge@Wharton the subject is just as fascinating (and challenging) for online retailers as those operating from bricks and mortar premises.
Considering shoppers' different patterns raises some intriguing issues. Katherine Milkman, author of I'll Have the Ice Cream Soon and the Vegetables Later: A Study of Online Grocery Purchases and Order Lead Time, selected online grocery shopping because "customers must typically schedule the delivery of food items for a more specific time."
While acknowledging that instant gratification isn't an option, the study demonstrates that sooner vs. later is influential. Ms. Milkman, an operations and information management professor at Wharton, along with Todd Rogers of the Analyst Institute and Max H. Bazerman of Harvard Business School, used data "partially inspired by the rise of internet shopping because that trend has created a pool of data that is both extensive and much more exact than information that could be obtained through surveys or other research methods." Conclusions were based on "North American urban online grocery operation over the course of the 2005 calendar year."
Essentially, the idea was "to study online shopping patterns to see if consumers were indeed more likely to order 'want' foods like high-calorie desserts and snacks for more immediate delivery while tending to order 'should' foods like fruits and vegetables several days in advance."
It turns out that, "in general, orders for 'want' foods are greater when delivery time is shorter" -- or closer to that need for instant gratification. In addition, for the most part, longer delays between ordering and delivery meant lower spend. "Spending decreases as we order food further in the future," she said. "But the more immediate the gratification, the more freely we spend."
As the report suggests, "retailers might try to push their customers to place more orders for the immediate future" as "more money will be spent under those conditions." Which is similar to what bricks and mortar retailers have long recognized when placing temptation near the checkout to increase spend.
Discussion Questions: How likely are consumers to make impulse purchases online? What are some ways websites can increase impulse purchases?