TPMA Outlook: Do Shoppers Plan Their Impulse Buys?

Discussion
Mar 02, 2010
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Commentary
by Bob Houk, TPMA Executive Director

Through
a special arrangement, presented here for discussion is a summary of
an article fromTPMA Outlook, the
weekly newsletter for Trade Promotion Management Associates.

Do
shoppers plan their impulse buys? Well, maybe not exactly, but they do
in many cases budget for them. At least, that’s what we’re told by a new
research study that will be published in the Journal of Consumer
Research
this summer.

An
advance report on the study, Planning to Make Unplanned Purchases?
The Role of In-store Slack in Budget Deviation
, states that most shoppers
mentally set aside an amount for unplanned purchases when shopping, a practice
they call ‘in-store slack.’

They
asked shoppers what items they planned to purchase, how much they expected
to spend on the planned items, and how much they expected to spend on the
total trip. After shopping, participants provided their receipts and answered
questions about themselves and the experience. More than three-fourths
of the participants included room for unplanned purchases.

“Shoppers
in the study indicated that they employ this strategy both because they
anticipate ‘forgotten needs’ as well as because they realize that they
will encounter ‘unplanned wants’ — with some respondents even explicitly
indicating that they expected to make impulse purchases,” the authors write.
Consistent with prior studies, the shoppers were remarkably accurate when
predicting how much they would spend. The average budget deviation was
only $0.47.

The impact of in-store
slack on budget deviation depended on how many aisles the shopper visited
and the shoppers’ level of impulsiveness. “Less-impulsive individuals who
shop most aisles tend to spend the money available from in-store slack, but
don’t exceed their overall budgets. In contrast, in-store slack leads to
overspending for highly impulsive individuals who shop most aisles,” the
authors explain. “For the majority of consumers, having in-store slack appears
to be a rational way to use the store to cue needs and preserve self-control.”

The
fact that customers go into the store anticipating that they will make
unplanned purchases is not a totally new idea — that’s why endcaps are
so popular, and why candy, gum and People magazine are stocked in the check-out
aisle. What is new, at least to me, is that most people have a pretty good
idea of how much they are going to spend on those unplanned purchases.
The addition of this knowledge, assuming the research stands up, should
impact the way in-store promotions are planned, and affect the thinking
behind some post-event analysis.

Discussion
Questions: Are shopper marketing and other in-store programs adequately
set up to appeal to consumers who make ‘planned’ impulse buys? What
else can food retailers do at the store level to capitalize on consumers’
budgets for in-store slack?

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11 Comments on "TPMA Outlook: Do Shoppers Plan Their Impulse Buys?"


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Max Goldberg
Guest
11 years 2 months ago

Well-crafted promotions can appeal to consumers and cause unplanned in-store buys. Whether it’s switching from one brand to another or purchasing an item not on the original shopping list, promotions can have an impact. Promotions can add value, link the purchase of one product to another, allow consumers to sample a product and encourage immediate action.

Joan Treistman
Guest
11 years 2 months ago

There’s a difference between consumers setting aside or expecting unplanned expenditures and identifying the unplanned purchase in advance. Based on the article/study it would seem retailers could be conducting themselves as they currently do, thinking of unplanned purchases as moving targets, i.e. it’s all random. Drilling down into the categories related most often to unplanned purchases will provide more strategic guidelines as to what and where to display products.

However, there’s another perspective that is needed if the strategy is to be effective. Retailers have to better understand the process of making the unplanned decision. Does the display trigger the response or does the related product purchase signal an unplanned need or want?

In other words, if I buy lettuce, does it remind me that I need salad dressing? Or do I realize I need salad dressing when I pass through the aisle of salad dressings?

Ben Ball
Guest
11 years 2 months ago

While we may have just quantified this phenomenon through consumer research for the first time, it almost certainly is not new. The fact that shoppers have this mental piggy bank, or “in-store slack,” is why impulse merchandising at retail is as effective as it is today. This is the consumer gold we have been mining all along.

Doron Levy
Guest
Doron Levy
11 years 2 months ago
I was always taught that there are 3 components required for a successful impulse display. The first 2 are very simple: – you need a lot of stock of the item to make the display; – the display needs a huge sign; The third piece of the puzzle is not so simple. You need velocity. The first 2 things can enhance a product’s velocity but merchants need to know how fast a certain product can move before displaying it as an impulse item. Chocolate bars priced at 99 cents in a dump bin by the cash register is a great high-velocity impulse item. Pallet stacked air conditioners priced at $599.99 right at the front entrance is not a high velocity impulse item. Windshield washer fluid and road salt: yes. 46″ LCD TVs and BluRay players: no. Do you see where I’m going with this? Freshness also plays a factor in impulse items. These displays should be changed frequently with a deeper margin strategy for higher traffic times. Just because you have 500 of something, doesn’t… Read more »
Bill Emerson
Guest
Bill Emerson
11 years 2 months ago
Food retailers, like all retailers, can improve their impulse sales and average ticket by approaching their features, endcaps, and other visual power points as “solution” (vs. key item) sites. Solution sites would be defined as multiple items that are consistent with the primary category and are part of an overall process. I am continuously puzzled in food stores by the locations of impulse items. In the soda aisle, there is a hook strip with garlic presses (???). In the snack aisle are spatulas (???). It’s terrific that they are cross-merchandising proven pick-up items around the store, but it seems there is an opportunity to improve the velocity if they take an extra minute to site these items as logical extensions of the primary category. So, for instance, put the garlic press next to, say, the garlic bin, along with a garlic peeler and a flexible cutting sheet. If you really want to see a master at this solution selling, go to any Bed, Bath, and Beyond, where this solution merchandising is an integral part of… Read more »
Ben Sprecher
Guest
Ben Sprecher
11 years 2 months ago
Measuring something changes it. The fact that consumers were asked at the beginning of a trip about their budgets and about how much they had set aside for “impulse buys” made the shoppers that much more conscious of their budgets and of their slack. I don’t know about most of you, but when I set foot in a grocery store, unless I’m explicitly questioned about my budget, I’m generally thinking about work, other errands, my shopping list, and how to get through the store as quickly as possible–anything except the anticipated level of my impulse buying. That said, people make impulse buys, and they do so for a variety of different reasons. Joan is exactly right–we need to do a lot more work understanding *why* they make in-store decisions, and we need to build different promotional programs, using different tactics, to address each of the different shopper motivations. To build on her example, for those shoppers who think of salad dressing because they see it in the dressing aisle, there’s opportunity to convert them with… Read more »
Kevin Graff
Guest
11 years 2 months ago

Doron’s comments above are spot on. Want to crank up the results even more at the POS? Put your cashiers on a program to sell the impulse items. Give them each a target, track their performance, coach them, and provide a small reward. Then, watch your results with impulse items at the cash take off!

Michael L. Howatt
Guest
Michael L. Howatt
11 years 2 months ago

Lettuce and salad dressing aside, impulse purchases really need a new name. I’m not convinced how impulsive they really are in today’s world. I know candy, gum and mints are near the front checkout so when I go to the store with the idea of “picking one out that strikes my fancy,” is that really an impulse?

I know there are cookies in the cookie aisle so if I don’t want to be tempted, I won’t walk down the aisle. People shop the same stores regularly so the become intimately familiar with the layout in order to provide speed and comfort. They can walk by a display without a glance if the know there is a particular category always on special at that end of the aisle.

The real reason stores are not more successful in creating these unplanned or extra purchases my be that they really don’t exist.

James Tenser
Guest
11 years 2 months ago
I love the smell of a good oxymoron in the morning. Planned impulse smells like … reality. Contrary to the oft-published statistic, it’s self-evident that 100% of purchase decisions are made in the store. It’s also quite clear that 100% of purchase decisions are influenced in some way outside of the store. Even “impulse” purchases like candy bars at the check stand are subject to pre-existing shopper preference. If I hate toffee but love dark chocolate, no quantity of display pizazz is going to influence me to buy a Heath’s and not a Special Dark. At times, the not-so-hidden persuaders in store may sway me to try a new-to-me product or to re-purchase a non-staple item. But when I make that choice, I take a dollar from my all-too-finite wallet that might have been spent on something else. For the retailer, then, the real questions about impulse items are approximately as follows: (1) Are they incremental with respect to my share of the shopper’s wallet or the size of her basket, or am I just… Read more »
Vincent Young
Guest
Vincent Young
11 years 2 months ago

A key to driving impulse sales is to give the consumer a rational justification for a want, thus positioning it as a need. If consumers are budgeting for and anticipating “forgotten needs,” then food retailers should prod the consumer to purchase more impulse items by simply providing “Don’t Forget” lists at the check-out lane. Imagine the frequency with which shoppers would blur the mental line between wants and needs if they were exposed to lists of the most popular “Oft Forgotten” items grouped by occasion or segment. Lists would include, for example:

– “Don’t Forget” Items for “Kitchen Pantry Safety Stock”
– “Don’t Forget” Items for “Home Entertainers”
– “Don’t Forget” Items for “Tailgaters”
– “Don’t Forget” Items for “Travelers/Commuting/Road Trips”-
“Don’t Forget” Items for “Baby/Child Care”

Each list would, of course, feature time-sensitive coupons that create both a sense of value and urgency for the consumer to add forgotten items to their shopping cart.

Joel Warady
Guest
Joel Warady
11 years 2 months ago

Retailing is theater. Impulse buys will increase if the performance within the store is stellar, the stories being told are compelling, and emotion-drive and execution is on target. If retailers get this (some do; Apple, Trader Joes, Costco) they will have huge success at driving impulse sales.

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