The Psychology of Impulse Buying and its Tangible Benefits: Part 1 in a Series
The following is the first in a series of blog posts about impulse purchasing and how to leverage Gilbarco Veeder-Root’s Impulse countertop merchandising system to increase c-store retail sales, profitability, customer insights and customer loyalty.
Let’s start with some basics that help us to understand consumers. Retailers of all kinds have understood the phenomena of impulse purchasing for decades. It’s why checkout lines or counters are stuffed with inexpensive, but often high-margin items like candy, gum, beverages, as well as other goods like lighters, tobacco products, tape, batteries and more. While point-of-purchase (POP) displays have been around since the 14th century in the form of market stalls displaying food and clothing, it wasn’t until the 50’s and 60’s, with the advent of color printing technologies, that POP grew explosively, including its ability to enhance impulse buying. Similarly, Gilbarco’s Impulse countertop merchandising system leverages the human “impulse purchase” tendencies, albeit with sophisticated electronics and a colorful, full-motion, touch-screen display.
Why do people buy on impulse? According to Psychology Today, the spontaneous urge to spend money is ingrained in our DNA. In short, here are several reasons cited by the magazine:
1. We get a feeling of satisfaction and/or enjoyment from buying which psychologists ascribe to a “high,” caused by dopamine which boosts our mood.
2. With discounted or items “on special,” consumers buy on impulse due to a fear of missing out — they don’t want to miss the deal and regret it later. Psychologists call it the “loss aversion” factor.
3. If you’re like me, I research purchases, especially if they are expensive ones. With all the brand and feature choices we have, making the “correct” decision for ourselves can be time consuming and just plain hard. Psychology Today opines that as a result, people enjoy easier buying decisions and thereby gravitate toward “perceived value” in making choices. Practical applications that leverage this concept include tactics like discounts, bulk promotions, package deals and gifts with purchase. All of the former can increase the value of a product purchase.
4. The drive to save time and money is genetic. It hearkens back to our hunter-gatherer days when hoarding daily essentials helped guarantee survival. Thus, when retailers market their products or services as time and/or money savers, it “triggers” a buying decision that (on the surface) seems impulsive.
5. People are hard-wired to believe they are “better than average” and buy accordingly. In effect, we buy goods and services to support an idealized, future image of ourselves or to support our current self-image.
Whether you can appreciate the connections to impulse buying described by the psychologists, it’s fairly clear that impulse buying exists and that good merchandising and promotion can leverage these apparently innate qualities and tendencies.
The next blog post will focus on how to leverage impulse buying in the c-store environment using Gilbarco’s Impulse countertop merchandising system to increase impulse sales, while providing concrete evidence of its power to upsell.
The final blogs will discuss the value of customer insights and loyalty and how Gilbarco’s Impulse can help shape and enhance the “experience” at your operation as well as participation in your loyalty programs.