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Study the nature of impulse buying

Literature review

Many researches have been carried out to study the nature of impulse buying and various factors that affect it. Impulse buying is influenced by a variety of economic, situational, personality, time, location and even cultural factors. Researches have also been conducted to understand the underlying motivational factors behind impulse buying. Similarly researches have been conducted to study factors that moderate impulse buying behavior. Consumers engage in impulse buying to satisfy hedonic desires for fun, novelty and variety; also impulsiveness is correlated with consumer's desires to fulfill self-esteem and self-actualization needs.

In the early stages research on impulse buying behavior was product-focused, as only products were held responsible for exciting people for unplanned purchases. The researchers directed their efforts and attention only to the type and characteristics of products and other factors associated with the availability display etc. of products in stores.

But later on, from the last few decades, the researchers focused on customers rather then products as being the cause of impulse buying. The factors like personality characteristics, income level, need to fulfill self-esteem etc. are typically responsible for impulse buying behavior.

The understanding of impulse purchasing was greatly improved through Stern's identification of four distinct classifications of impulse purchasing: planned, pure, reminder and suggestion impulse purchasing. The four categories are as follows:

  1. Pure impulse buying is a novelty or escape purchasing which breaks a normal buying pattern;
  2. Reminder impulse buying occurs when a shopper sees an item and remembers that the stock at home is exhausted or low or recalls an advertisement or other information about the item and a previous decision to buy;
  3. Suggestion impulse buying occurs when a shopper sees a product for the first time and visualizes a need for it, even though he has no previous knowledge of it; and
  4. Planned impulse buying occurs when a shopper enters the store with some specific purchases in mind, but with the expectation and intention to make purchases that depend on price specials, coupon offers, and the like.

(Francis Piron (1991), “DEFINING IMPULSE PURCHASING”, in Advances in Consumer Research Volume 18, eds. Rebecca H. Holman and Michael R. Solomon, Provo, UT : Association for Consumer Research, Pages: 509-514)

There are some factors other then product and individual characteristics that also play an important role in generating impulse purchases.

Gender Differences in Impulse buying

Several previous researches on impulse buying have paid some attention to the role gender plays in determining this behavior. These researches show that men and women's shopping behavior differs on many levels.

Kollat and Willet (1967) found that women tend to engage in more impulse buying as compared to men. It is also argued that women because of their propensity to shop more in general, make more impulsive purchases.

Tariq Jalees (2009) also found that the level of impulsiveness in reference to buying is stronger in females as compared to males.

Transaction Size affecting Impulse Buying

Kollat and Willet (1967) used two measures of transaction size: number of different products purchased and the grocery bill. They found out that the increase in size of the grocery bill and number of purchases made resulted in an increase in unplanned impulse purchases. Shopping List and Impulse buying

Studies conducted by Kollat and Willet (1967) indicated that one of the factors that affect impulse buying is the presence of a shopping list. This however only holds true if the transaction size is greater than 15. When more than 15 or 20 products are purchased, shoppers having a list make a smaller percentage of unplanned purchases. However, when less than 15 or 20 products are bought, the shopping list does not affect the percentage of unplanned purchases.

Pre-decision stage and impulse buying

The research study conducted by Muhammad Ali Tirmizi, Kashif-Ur-Rehman & M. Iqbal Saif (2009) clearly indicate that there exits a weak association between consumer lifestyle, fashion involvement and post-decision stage of consumer's purchasing behavior but Pre-decision stage of consumer's purchasing behavior established strong association with the impulse buying behavior of the consumers.

The pre-decision stage of the purchasing associate the buyers with unplanned or impulse buying because these days stores are full of variety of products and a buyer can easily get interested in purchasing a product which appeals him or her while shopping the planned list of products. (Muhammad Ali Tirmizi, Kashif-Ur-Rehman & M. Iqbal Saif 2009)

Group influence on impulse buying

Most research in consumer psychology assumes that impulsive purchasing can be best explained by factors at the individual level, in contrast a research study conducted by Xueming Luo (2005), indicates that the presence of others influences this behavior. Presence of peers increases the urge to purchase, and the presence of family members decreases it.

Visual merchandising and impulse buying

Today's retail stores are almost universal in their reliance on self-service merchandising and a high rate of impulse buying. Self-service merchandising is facilitated by store design and careful attention to traffic flow, while impulse buying is enhanced by the use of special displays.

Customers typically do not cruise the aisles aimlessly hoping to find something to buy. Most consumers are busy people and have a purpose to their shopping trip. Thus, impulse sales are created not by persuasive reasoning, but by striking an emotion that the customer can act upon quickly. There appear to be three mechanisms by which the impulse buying response can be triggered.

First, the special display cues the customer to respond to an external advertising campaign. The display creates impulse sales by reminding customers about the extensive advertising to which they have (hopefully) been exposed. Second, the display can serve to break the consumer's conditioned reflex to buy a particular product. If the consumer buys Brand A because it has become a habit, then it will be necessary for them to have a reason to break this conditioned purchase behavior. Special displays provide a way to accomplish this because the consumer is responding emotionally, not through a reasoned process. Finally, special displays create impulse sales for new or novel products by instigating the desire to “try something new!”

The salient feature to remember about impulse sales is that they are a response to an emotional appeal. A successful appeal may take many forms, but those most universal and easiest to communicate are identified by simple phrases such as: “low price,” “new,” “free,” “extra,” etc. A special display is used to get the customer's attention for each of these messages.

A research study conducted by W.M.C.B. Wanninayake & Pradeep Randiwela (2007), indicates that most of customers have given first and second priority to visual merchandising. Second and third largest amount of customers mentioned price of goods and location of the outlets. According to the literature and pilot study in Sri Lankan supermarkets, researchers recognized that lighting, design layout, product display and cleanliness are the main variables of visual merchandizing.

Price discounts and impulse buying

This factor is the most talked about when it comes to impulse buying. A lot of people say that they indulged in impulse buying just because something was on a discount. Deals and discounts contribute to impulse buying, and when we see something priced much lower than what we are used, that triggers a desire to get that thing and save money.

A large part of all purchases are attributed to impulse buying, this is undoubtedly good for retailers, but it's not as good for consumers, because a lot of impulse buys don't end up getting used at all, and one regret spending any money on them.

Price promotions come in various forms, such as buy-one-get-one-free offers, coupons, and of course price discounts. Cash reward is a new popular promotional tool used at many famous department stores, apparel retailing chains, and grocery stores. Consumers can obtain a rebate when their purchase passes a threshold set by the company, as in, purchase over $100 to get a $10 cash reward. However, distinguished from other price promotions, cash rewards provide consumers freedom to choose any products within the store rather than a specific product. Cash rewards, like the conditional discount of coupons, give rebates only to consumers achieving the purchasing threshold.

Facing free choice and the conditional-discount promotion, consumers may be attracted to buy merchandise in excesses their original shopping budget. Those consumers perceive gains from getting the cash reward if they reach the threshold and perceive losses from not taking advantage of the offer if they do not. Such perception generates an “artificial buying desire.”

Price discounts and cash rewards do increase the possibility of occurrence of unplanned purchases, especially when a consumer's shopping expenditure approaches the offer's threshold.

Hypotheses

The hypotheses formulated after review of the literature are given below:

H1: Visual merchandising has a strong influence on the impulse buying behavior of the consumers.

H2: Price discounts have a strong influence on the impulse buying behavior of the consumers.

The testing of the hypotheses is confined to the primary data collected from Karachi.

References

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