Merchandising Know-How: Buying on Impulse

Impulse buying generates more than $4 billion in annual sales volume in the United States, according to reports. Because impulsive purchases are associated with irrationality and emotion, people are more likely to make a purchase if they can visualize a need for it. A cross-merchandised display complete with signage that suggests how the products can be used is highly effective. Products featured in displays are more likely to lead to impulse purchases.
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“An impulse purchase is an unplanned or otherwise spontaneous purchase. One who tends to make such purchases is referred to as an impulse buyer.” --Wikipedia

Impulse buying generates more than $4 billion in annual sales volume in the United States, according to reports. Is buying on impulse the need for instant gratification, or is it clever manipulation by savvy marketers? It would be nice to have the answers, but there is a lot of speculation about exactly what is meant by and what motivates an impulse purchase. In an effort to define the term, researchers have identified some product-related characteristics that influence the chance of a product being bought on impulse.

Because impulsive purchases are associated with irrationality and emotion, people are more likely to make a purchase if they can visualize a need for it. A cross-merchandised display complete with signage that suggests how the products can be used is highly effective. Products featured in displays are more likely to lead to impulse purchases.

The price and size of a product is also a factor. Smaller products are more likely to be bought impulsively, and lower-priced items are popular impulse buys because customers feel they are taking a smaller risk by buying them.

There are basically four categories or behaviors that lead to unplanned purchases.

Reminder impulse buying – This occurs when a consumer in a store sees a product and is reminded of a previous experience or recall, like a friend’s recommendation or a TV or print ad. Direct mail and advertising efforts pay off with buyers in this category. Coordination of in-store signage with advertising creates a subtle reminder.

Pure impulse buying – Happens where there has been no preplanning involved in the purchase. Many factors can influence this category of buying, like price reductions and special sales. Products placed near or adjacent to the cash/wrap counter are "candy" to an impulsive shopper. Sales of those products can sell up to 262 percent more than product placed elsewhere in the store.

Suggestion impulse buying – Takes place when shoppers are introduced to a product that they have no previous experience with, by some form of in-store promotion. This is where in-store and window displays and product benefit signage can influence decisions.

Planned impulse buying – It occurs when shoppers plan to buy a product, but their final decision is dependent on price or brand. Brand shops, price-point spreads and the persuasiveness of salespeople can influence the planned purchase.

How many times have you heard a customer say, "Just browsing?" Instead of it being a portent of no sale, browsing is actually when most unplanned purchases occur. So tune up your displays, place them in highly trafficked areas of the store, plan special offers and create signage that informs and persuades.

Sharon Leicham is the author of "Merchandising Your Way to Success" and "How to Sell to Women" and is a regular columnist for SNEWS® and GearTrends® magazines writing on merchandising and marketing topics. You can access all of her columns by going to www.snewsnet.com/merchandising, where you will find tons of information targeted at the needs of the independent specialty retailer. You can email Sharon with questions and comments at sharon@merchandisinghub.com.

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