Online Impulse Buys Depend On Speed of Delivery
By Bernice Hurst, Contributing Editor, RetailWire
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.
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
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?
- Hold the Vegetables: How ‘Now vs. Later’ Affects Customer Choice – Knowledge@Wharton
have the ice cream soon and the vegetables later: A study of online grocery
purchases and order lead time – SpringerLink