Are Checkout Impulse Buys a Mobile Casualty?
According to a recent Bloomberg article, sales of magazines, gum and other items typically stocked near grocery checkout counters have fallen sharply over the last year and a half. The possible culprit: smartphones occupying shoppers’ attention during wait times.
The problem of "mobile blinders is a huge factor," Marshal Cohen, an analyst at NPD Group, told Bloomberg. "Companies have to rethink the in-store experience."
The article stated that stores are already seeking alternatives to impulse buying at the checkout counter. For instance, Coke is adding single-serve drink coolers away from the front of the store. Hearst, the parent of Cosmopolitan, Good Housekeeping and Elle, is planning 20 in-store campaigns this year with Coke and L’Oreal SA, up from four in 2012.
But with much of the evidence anecdotal, some aren’t sure of mobile’s impact on impulse checkout purchases. Higher taxes, commodity prices and gasoline costs could be responsible for the recent downward trend in single-copy magazine sales, according to Mark Peterson, vice president of newsstand sales at Meredith Corp., publisher of Better Homes and Gardens and Family Circle.
Moreover, many believe e-coupons sent to mobile phones in aisles and other digital approaches will only expand impulse opportunities at checkout and across the store.
"By using location and behavior-based cues, savvy brands can reach consumers when and where it matters most," wrote Bonin Bough, VP of global media and consumer engagement at Mondelez International, in the recent article on Harvard Business Review’s blog. "This could take the form of a mobile-based deal on gum mapped to a consumer’s daily commute (a time when people are most likely to be chewing gum), or delivering a coupon for chocolate to a consumer’s phone while they’re in a long checkout line, engrossed in their phone instead of looking up at product displays."
- Shoppers’ ‘Mobile Blinders’ Force Checkout-Aisle Changes – Bloomberg News
- Four Ideas for Creating Mobile Strategy – Harvard Business Review Blog – Harvard Business Review
- ‘Mobile Blinders’ At Retail: Another Opportunity To Turn Mass Into Me Media? – Mediapost
- Mobile And Impulse Purchases: Perfect Together – Storefrontbacktalk
- Study: Self-Checkout Curtails Impulse Buys – RetailWire
Discussion Questions
What effects do you suspect smartphones are having on impulse purchases at checkouts? What merchandising adjustments may be necessary for typical checkout impulse items? Overall, will mobile devices result in more or fewer opportunities for impulse shopping across the store?
Overall, mobile will drive an increase in impulse purchases. The opportunity to send coupons and offers tied to a location or shopping list will outweigh any effects of distraction.
I’m skeptical about whether the use of smartphones has really killed demand for gum and candy in the past year, but I have a few other theories for the decline in register endcap sales:
1. How many registers are open on a consistent basis in discounters or grocery stores? Any staffing cutbacks (such as the well-publicized ones at Walmart) are going to translate into fewer open lines, and self-checkout is only speeding that process in drug and food stores.
2. Print media are in rapid decline because of the rise of online versions of magazines and newspapers. Why pay for a copy of People when you can read it online? It’s no coincidence that Time Warner is working to spin off its print division.
3. Finally, most stores depending on checkout endcaps to drive impulse sales do it in an unimaginative way. This prime real estate has been occupied by the same types of merchandise (see point #2) for as long as I can remember.
There may be other considerations such as more efficient point-of-sale, self-checkout and less wait time in the checkout line. I really have a hard time believing mobile is the main culprit.
I love the way retailers always find a way to adapt to most any challenge. Case in point is the use of in-store tech (e.g. e-coupons sent to customers in the store) so that you reach them IF they are on the smart phones.
Stepping outside the grocery world for a moment, this ‘on their smartphone’ argument heightens the need for cashiers to start to point out the featured cash counter items. We’ve always said these are the easiest add ons to make to the sale, but it requires a concerted effort from the front-end teams.
Checkout has never been fun in any shopping environment. This is particularly true in food retailing, which for the most part does not use systematic checkout queues. Customers waiting in line are forced to deal with the boredom factor and respond accordingly; text, surf, etc.
Some of the noted technology options will bring impulse back to top of mind. However, the larger issue of store checkout remains. If one solves the store checkout issue, it will go a long way to solving the boredom and the need for multi-tasking.
The Store Operations Council held its spring meeting last week, and members expressed a pronounced interest in leveraging mobile checkout for business gain. They’re re-examining everything about the store experience, as Marshal Cohen recommends; expect some pretty sophisticated cross-promotions in newer mobile POS software.
At this point, mobile checkout is relatively nascent in grocery and mass outlets, estimated at fewer than 1% of transactions. It is unlikely to have had a significant impact on impulse sales. Other factors, such as shifting magazine sales from retail to internet, have had more impact.
However, the future may hold a different story. Over half of shoppers now have smartphones and many are already using them in various stages of the shopping process.
Our studies of the checkout experience show that shoppers have embraced self checkout. In many cases, self checkout has reduced the number of impulse purchases. However, impulse sales can be recaptured by adapting the merchandising to the nature of the transaction.
Mobile checkout will undoubtedly become a factor in impulse purchases at the checkout. Like self checkout, retailers will need to study this shopping behavior and identify new merchandising practices.
The mobile shopper can receive messages and offers as they shop which can result in extra purchases when they check out. If properly implemented, mobile will enhance the opportunities for incremental impulse sales rather than reduce them.
Technology promoters are way ahead of consumers’ actual use of smartphones for shopping, especially in food. The decline in front-end impulse purchases can be summed up like this: “it’s the economy.” Last month another .2% of the population stopped looking for work. Consumers that have jobs have not gotten raises to cover inflation. Except for some breakout purchases like auto, the consumer is still in a recession state of mind.
I agree with Dick. There are more reasons than smartphones for the decline in impuplse purchases. Online versions of the newspapers is a principal reason for their decline. Why buy when you can read most of what you want for free?
Mobile will eventually increase impulse shopping opportunities. The sky is the limit on how many ways to interact with shoppers all through their experiences inside and outside the physical store.
How can moblile phones be the culprit here? They didn’t just appear on the scene. Sure, their use needs to be a factor to consider for in-store merchandising, but maybe it’s the recent hits on the consumer pocketbook affecting checkstand sales. Look at the comments by Mark Peterson above (add health concerns about the confectionary category) and then consider that this discretionary stuff is merchandised right near the place that is soon going to suck down the shopper’s meager cash.
Impulse shopping always exists, it happens everywhere in the store rather than focused at the checkout. The checkout line just happens to be a slow moving target for retailers to promote products (amazon.com does it too, called basket fillers). The issue is that the consumers will distract themselves on their phone if they have to wait. It would be an interesting study to see how many seconds people stand in line before they whip out their cell phone to distract themselves.
If you can shorten the time and offer impulse items during the transaction, I think there is still room for impulse purchases. What consumers are not doing is wading through 10 feet of impulse items while waiting, when they can check their mobile device.
This is all about the digital activity addiction.
On impulse items or any area where a shopper or human goes “idle,” the issue digital transitioning lifts its ugly head. The shopper steps from the reality of where they are (in a store around humans) to their twitter/texting/or mobile chatter life. They leave the physical space and go digital. Same with drivers.
When a moment of time is available, they shift to fill that moment with digital activity. We have all seen this in shopping, driving, at the movies—everywhere!
The adjustments to make in retail? Add “SCAN HERE for A DEAL” signage on the impulse items. They will scan, get a coupon, and buy the stuff. As long as they can go digital, they will buy it.
Tom…fed up with mobile (at times)….
Smartphone as scapegoat, that’s a new one. Could it also be that people don’t want to buy what’s “merchandised” there anymore? Seems like its time for some new thinking at checkout vs new scapegoats.
Check out Hy-Vee, the innovative grocer from Iowa (!) that successfully tested ‘healthier’ options at their check outs and is now rolling those out to all stores. That’s in Iowa, center of the belle curve, where we all can live.
Like most everyone else here, I think this is a story in search of a reality. I can’t recall actually ever seeing anyone on a phone at a checkout line, and a one year decline in gum sales doesn’t seem like much in the way of “evidence.” Magazine sales have been in free fall for years. Online, yes…smartphones (specifically), no.
I would echo the sentiments of Dick Seesel’s comments related to merchandising at checkout. The POP configurations and lack of change in the product mixes may have led to a “wallpaper” effect, meaning the shopper just sees the impulse setups as a blur or visual noise.
I do think smartphones have some impact on impulse buys, and another possibility is the general sense of distraction and anticipation created by the “what’s next” mentality of our times. Maybe by the time they’ve reached checkout they’ve already checked out with their minds?
It’s difficult to take this anecdotal information and tie it to the decline in impulse purchases made in the checkout line. All sorts of other potential factors.
That said, the smartphone offers incredible opportunities for retailers to connect with their shoppers in-store – in ways that were not possible until recently. Plus there’s a lot of real data to be collected that will only help improve the effectiveness of marketing to shoppers. Lots of upside in the mobile opportunity. Much more than the potential decrease in checkout magazine and gum sales.
While correlation is not causality, it does seem like the checkout lanes would be an ideal place to go into the “digital zone” for many shoppers. However, it is also the place where many shoppers reflect on the shopping trip to make sure they didn’t forget anything. Having the items there that might have been forgotten still makes sense. And having a “digital option” for coupons on certain items also could have appeal.
I’d like to add a UK perspective here. Like Dick, I agree that the reduction in open checkout lanes, and the growth in self-checkout (around 5% in UK supermarkets now) is more likely to hit impulse sales at checkout than mobile phones.
Also, in the UK, phone signal and 3G coverage is poor in stores—one of the reasons why you see so few people using a smartphone in store.
A number of retailers here no longer merchandise confectionery at the checkout, as it is regarded by shoppers as a negative impact on children, putting temptation and ‘pester power’ where it isn’t needed. So delivering a coupon for chocolate to a consumer in a long queue would be VERY poorly received!!
From a CX perspective, it’s better to do what Tesco did in 2001—use heat-sensors to monitor incoming footfall to then predict the number of checkout lanes needed an hour later—it was very successful.
It’s common for the shoppers to be attending smartphones when they are waiting. This cannot be changed. The prudent retailer has to devise some strategy to engage the shopper through his own smartphone while he/she waits at POS.