How Your Biz Can Use Impulsivity to Increase Average Purchase Size
When someone buys a house, there’s a lot of planning that goes on behind the scenes. There are important family discussions, meetings with lenders, paperwork, house showings, contracts, negotiations, and due diligence. It takes months for the entire process to play out â€“ leaving plenty of time to back out or experience a sudden change of heart.
When someone buys a McDonaldâ€™s combo meal or pair of shoes, there isnâ€™t always a high degree of thought behind the purchase. In some cases, thereâ€™s no thought. In these instances, the purchase can be tied directly to a phenomenon known as impulsivity.
Research Shows Clear Connection Between Brain and Impulsivity
According to a recent research study out of the University of Georgia, impulsivity is deeply connected to activity inside of the human brain. More specifically, researchers have discovered a specific circuit within the brain that alters food impulsivity. In other words, thereâ€™s a part of the brain thatâ€™s regulating a personâ€™s ability to say yes or no.
This may be the most recent study on brain activity and impulsivity, but itâ€™s far from the only one. Scientists and behavioral psychologists have been aware of the connection for many years.
Research has discovered that certain people are more prone to impulse purchases than others and will often exhibit predictable patterns. For example, we know that impulse buyers are more status-conscious and imagine-concerned. Whether they realize it or not, their quickness to make purchases is often about projecting a certain image.
Furthermore, we know that impulse buyers tend to be more prone to anxiety and have difficulty controlling their emotions. This makes it harder to resist emotional urges to buy something. (They also tend to struggle with happiness and view purchases as short-term mood boosters.)
It’s not all deep-seated neurology. There’s a lot of anecdotal evidence that suggests people who shop for fun are more likely to engage in impulse purchase behaviors. But if you combine a love of shopping with some of the psychological factors outlined above, the results become amplified.
Though some people are more inclined to buy on impulse, itâ€™s something we all intrinsically deal with at some level. Research reveals that:
- The average U.S. consumer spends $5,400 per year on impulse buys. That adds up three purchases a week, or $450 every month.
- Food seems to be the go-to impulse buy, with 71 percent of consumers admitting to making a spur of the moment purchase in this category. Clothing (53 percent), household items (33 percent), takeout (29 percent), and shoes (28 percent) round out the top five.
- Interestingly enough, most people tie their impulse purchase behaviors to financial savviness. Whether right or wrong, 85 percent of consumers say their impulse purchases are rooted in deals and discounts.
While plenty of impulse purchases are innocent and donâ€™t yield negative consequences, there is a shadow side to this behavior.
Dysfunctional impulsiveness is the behavior of choosing small short-term rewards instead of patiently waiting for large long-term rewards. Itâ€™s essentially a subcategory of impulsiveness and it can create problems.
Dysfunctional impulsiveness plays out when a customer sees a pair of jeans that she â€œmust have.â€ And even she only has $100 in her bank account, she charges the $150 pair of jeans to her credit card and justifies it by saying, â€œJust this one time.â€ The short-term reward is a new pair of jeans (which makes her look and feel great). The long-term consequence is credit card debt and regret. And even though she told herself that it would only be this one time, the impulse buy actually forges a pathway in the brain that makes it easier to repeat in the future.
Impulsivity can be good or bad. Itâ€™s simply another element of complex consumer psychology. And itâ€™s not just interesting from the consumer side of things. Itâ€™s arguably more intriguing from the opposite side of the cash register.
How Your Business Can Drive Impulse Purchases
The aforementioned findings have naturally leached their way into the business world over the past few decades. As a business owner, salesperson, or marketer, understanding the power of impulsivity could be catalytic in your ability to drive more purchases, increase average purchase size, and bolster top-line revenue.
Here are some simple strategies and techniques you may find helpful:
You canâ€™t motivate shoppers to make impulse purchases if they canâ€™t see the products. A huge part of driving emotional purchase decisions is making the right items visible in the appropriate places.
For physical retailers, the checkout line is the perfect place for strategically increasing impulse buys. This is why supermarkets line their queues with candy, gum, soda, magazines, and random knickknacks. Stores like T.J. Maxx and Five Below take this to an entirely new level by actually requiring customers to snake around a long checkout line thatâ€™s lined with cheap and heavily discounted items.
For online retailers, improving visibility may look like strategically placing â€œrecommended itemsâ€ on product pages. Amazon does this a lot. If a consumer puts a fishing rod in their shopping cart, the website has an algorithm that recommends other items customers frequently bundle with fishing rods â€“ like fishing line, tackle, lures, and artificial bait.
Whether you operate a physical retail store or an e-commerce shop, it’s helpful to place impulse items in close proximity to your top-selling items. This ensures they get more exposure than they otherwise would on their own.
The topic of pricing psychology deserves its own article. However, you should know that how you price certain items in relation to other products has an impact on how your customers value them.
Sharp price contrasts are especially effective in getting shoppers to make impulse purchases. For example, placing a $2 item alongside a $14 item will make it seem more appealing than if it were mixed in with $3 and $4 products. Thereâ€™s something about seeing a significant contrast that makes people feel like theyâ€™re getting a good deal.
If customers assume they can come back and purchase the item later, many will exhibit enough restraint to avoid putting the item in their shopping cart. However, if it feels like the deal is temporary, theyâ€™ll be more likely to buy it now.
Urgency is one of the fundamental elements of impulsivity. When people feel like they have to act now, thereâ€™s a higher chance that they will. You can communicate urgency in a variety of ways. Including:
- If you want to sell something fast, time is your best tactic. Simply creating a 24-hour flash sale where you discount an item by 20 percent can help you push out some inventory that otherwise would have sat.
- You might not even have to discount the item or run a limited-time promotion. Sometimes all it takes is mentioning that you have limited quantities. A care dealership, for example, can benefit from mentioning that they only have three 2019 Toyota Siennas remaining. Just mentioning the number communicates a greater sense of urgency (even if all other factors have remained the same).
- All it takes is strategic wording to move some customers to action. For an e-commerce website, changing a button from “buy” to “buy now” can communicate a feeling of urgency. Or instead of saying â€œadd to cart,â€ a CTA that reads â€œreserve my item nowâ€ can result in higher conversion rates.
Limited-time offers are a great way to spur people on and move them from the consideration to the purchase phase. It may take some time to home in on exactly how you can communicate urgency and remain authentic in your branding, but it’s something worth pursuing.
The more you draw attention to an item, the more likely it is that people will buy it on impulse. Highly stimulating environments are especially effective. They work by attracting crowds and ramping up excitement. This (a) encourages people within the crowd to buy, and (b) serves as a symbol of social proof that magnetizes new customers to the crowd.
Online, you can draw attention by strategically placing impulse products on highly visible areas of your website. In store, it may look like using physical signage or promotions to direct people to the items you want them to buy.
Offer Samples and Demos
For retailers and other brick and mortar businesses, in-person product demos and samples can go a long way towards convincing customers to buy a product.
According to one study, 74 percent of respondents report making impulse purchases after sampling a product in a store. Physical proximity to these items makes cravings stronger. There’s also an element of reciprocity involved. (If a nice lady at the counter is willing to give a customer a free donut, the customer may feel obligated to buy a dozen.)
The same goes for demos. Having someone show customers how a product works makes it seem more desirable. It also has a way of overcoming ambiguity and uncertainty.
Know Your Audience
Sometimes you can actually increase revenue by introducing new products into your mix â€“ specifically ones that are designed exclusively to be impulse purchases.
For example, letâ€™s say you own a high-end home furnishings store. You know that your average shopper is a female homeowner between the ages of 30 and 40. You also know that she tends to have young children (and often brings them into the store with her). Through observation, you notice that theyâ€™re often bored and that the mother would do anything to have her kids behave.
In this example, you could introduce a simple little kidâ€™s corner in your store. The corner could be filled with toys and games. This allows them to play while the mom shops. Naturally, the kids connect with the toys and the customer is happy. You can then capitalize on this by featuring the same toys as products in your checkout line. The mom notices that the kids loved the toy so much that she may feel inclined to buy it.
Train Your Team
Itâ€™s not all about marketing, promotions, pricing, and product placement. If you have a brick and mortar store where your customers interact with employees during the shopping process, you can actually train your team to help you drive impulse buys. More specifically, you should train them in the art of suggestive selling.
Suggestive selling is basically a sales approach or technique by which staff members prompt customers to make additional purchases through upselling, cross-selling, or add-ons. Typically suggestive selling involves adding simple, low-priced items at the last minute. (Using the example of buying a car, a salesperson would encourage a customer to purchase laser-cut car mats to protect the interior of their new investment.)
If youâ€™re going to train your team in the art of suggestive selling, you have to do so with care and nuance. If theyâ€™re too aggressive, theyâ€™ll come across as pushy and actually have the inverse effect. They must begin by establishing trust and communicating their desire to provide the customer with the best value possible.
If you really want to take suggestive selling to the next level, give your employees some autonomy in pricing. For example, let your salesperson mark an item down from a $20 sticker price to $10. When one of your employees offers this discount, it seems more exclusive and personal than when itâ€™s simply discounted on the sticker.
Knowing Where to Draw the Line
When it comes to impulse purchase behaviors, there will always be a discussion regarding the morality of certain marketing and advertising tactics. And while thereâ€™s certainly an ethical line that exists, most brands know where to draw that line.
As you look to increase impulse purchases among your own customers, youâ€™ll have to think through how you leverage the various techniques outlined in this article and what you can do to ensure you care for your customers and stay committed to adding value.
As long as youâ€™re truly adding value through your products and services, thereâ€™s an argument to be made that youâ€™re actually doing your customers a favor. The key is to stay focused and to be thoughtful in how you approach this aspect of sales and marketing.