How To Drive Impulse Buying On The Web

There’s a certain competing psychology behind impulse shopping. Retailers build their storefronts and in-store displays to maximize those opportunities, while consumers are increasingly being reminded how and why to resist the urge to purchase those high-margin items nestled near the checkout lane. Still, retailers tend to have the edge — at least in physical stores.

Online shopping and the concept of impulse buying paints a different picture, especially in 2014. As research shows, roughly one-third of consumers make an impulse purchase every week, according to a study by Marketing Support, Inc. and Leo J. Shapiro and Associates. And while that may be true, there’s competing evidence that shows that margins are vastly different when consumers impulse buy in-store versus online.

“Forty percent of consumers spend more money than they had planned in stores, while only 25 percent reported online impulse shopping,” the study concluded. Looks like the odds of impulse shopping are good for retailers, just not so great when they want to replicate that same experience online.

With e-Commerce on the rise and brick-and-mortar stores rushing to shift their focus online as foot traffic drops, is the concept of impulse shopping (and the margins that go with it) a thing of the past? Major online retailers aren’t throwing in that towel. Particularly this holiday season, physical store merchants have already adapted a new style of impulse-driven tactics that tap into the same psychology seen in stores, but with a virtual edge.

According to National Retail Federation chairman Stephen Sadove, technology innovations are key to impulse buying thriving on the Web. That concept is being generated through new linkable technologies that turn browsers and readers into shoppers.

“One [example] I’ve seen where you’re on a website, or magazine and you’ll be able to click on the editorial, get the features of what the dress might be and you’ll be able to buy it that day,” Sadove says.“If one comes from Saks, one comes from Neiman [Marcus], you can pay for it all on one shopping cart.”

Calling the shopping feature “store agnostic,” Sadove explained that retailers are incorporating “click-and-buy” features into editorial fashion content that drives its most interested consumers directly to the store’s website. That, in turn, creates a new version of impulse shopping. He also noted that advertising on editorial websites are offering shoppers the option to add the item directly to a shopping cart without even venturing to the retailer’s website.

That’s just one example of how mainstream media has teamed up with the retail market to drive its readership onto retail websites through ad technology that benefits both parties. It’s the perfect synergy and turns readers into instant-click impulse shoppers.

Then there’s other, more traditional tactics that are evolving on the Web from physical retailers. Take a look at retailers like Wal-Mart, Target, Macy’s and Best Buy — just to name a few — who’ve pushed every year to offer more “deals of the day.” It’s the modern-day impulse shopping; consumers put an item they didn’t even know they needed in their virtual basket, driven by the deal, with the hope of course that saving money on that deal prompts consumers to spend “what they saved” on other merchandise.

At least that’s the hope.

A Wall-Street Journal article suggests the Web has “made consumers more intentional [and] smarter.” So the deals and offers to bring consumers in, even though the economy is improving, may not actually deliver the increased basket size and impulse buys that they had hoped. Consumers may actually have changed their buying habits entirely thanks to the financial crisis.

“The shift of attention toward the Web and lingering frugality after the trauma of the financial crisis are the underpinnings of the problem,” the article also reported. “And the symptoms of the industry’s malaise are clear enough: extended declines in shopper traffic, weak sales growth, and a discount-driven race to the bottom that is sapping pricing power.”

“Consumers are now conditioned to shop for specific items and it’s not just affecting online consumer psyche but offline consumer psyche as well,” Joel Bines, a managing director at retail consultancy AlixPartners, told Wall-Street Journal.

“A new intentionality has taken hold of shopping. Many Americans have the money and the will to spend. But they are time-pressed and deal savvy, visiting stores only when they run out of items like cereal or toilet paper and after doing extensive research on purchases online and with friends. They buy what they came for—and then leave,” WSJ reported.

That hasn’t stopped retailers from pushing for bigger basket buys. There’s also retail innovations from retailers like Nordstrom and Net-A-Porter, which highlight its “complete the look” feature that pairs complementary items to encourage patrons to pick outfits instead of simply an item. Convincing consumers they need more than they came for, whether it be online or in-store, is impulse buying 101 for retailers. They thrive on that to drive ticket prices up and increase basket size. Just like items are found in a store, online retailers are pairing items together and suggesting related items as consumers navigate their purchase. Navigating consumers through their purchases blends the in-store experience onto the Web.

“Encouraging shoppers to snatch up those extra items is key for retailers, said Kantar Retail’s Anne Zybowski, particularly as the industry becomes synonymous with price slashing. As such, companies are investing in strategies that encourage shoppers to spend more each time they visit,” a CNBC article reported.

But for the most part, retailers may be investing in stores at a stronger rate than online. There’s still a gap in providing that same customer experience found in stores that drives up impulse buying. Physical retailers are already lagging in their online efforts behind eCommerce giant Amazon, which refuses to be outsold and has even embraced the daily deal. Its “12 days of deals” pushes out new products every day on its homepage in the days leading up to Christmas. For Amazon, impulse spending online doesn’t usually come at checkout, it starts the minute a consumer hits the site.

“Very few retailers make that level of an investment in such deep recommendations,” Forrester Research analyst Sucharita Mulpuru said in a CNBC article.

While retailers work to keep shoppers online longer, there is also a growing push to provide shoppers the convenience of the buy-online, pick-up-in-store option. It’s not a new concept, but widespread adoption is getting more popular as retailers have realized they can’t bank solely on in-store or online shopping as their only bread and butter; it’s about creating a mix of both. The feature helps consumers avoid shipping fees and it gets their foot in the door. This increases the chance they’ll impulse shop while there. After all, it’s hard to push impulse products if there aren’t as many shoppers’ eyes on them.

Mulpuru said this is another widely-used trick in the industry and it’s a way online retailers can push for online sales and still drive traffic to stores to encourage additional purchases. Because most stores don’t offer free shipping without hitting a minimum price threshold, there’s opportunity to convince consumers they are getting a deal by stopping in the store. And it gets those feet through the door.

“[Buy-online, pick-up-in-store is a] maneuver that, on the surface, makes consumers think they’re saving money by eliminating shipping costs. Similar to giving shoppers the option to make returns in-store, it’s a way retailers can snag the online sale, while driving traffic to their stores and encouraging further purchases,”Mulpuru told CNBC. Looks like retailers still have a few tricks up their sleeve to encourage impulse shopping.

Sure, consumer habits are changing, but the same is true about technology and commerce trends. Retailers adapt, because it’s their only choice. An increase in online shopping doesn’t necessarily mean the end to impulse shopping; it means retailers must tap into more technologies to connect with consumers with impulse opportunities.

After all, shopping habits may have changed thanks to technology — but has human nature?