The ongoing Pandemic has impacted not only the health of millions but also the retail sector resulting in a drastic change in consumer behavior. People are cautiously stepping into supermarkets and malls only to buy essentials under constant fear of getting infected by the virus. Technology has come to our rescue by not just being the hands and legs but the backbone of businesses thereby largely displacing conventional retail sector practices and consequently, consumer behavior.
15% of all consumer spending comes from a special type of consumer behavior namely – “impulsive buying behavior”. How is this behavior going to change as a result of the pandemic?
So, what is impulse buying?
Impulse buying is a category of unplanned purchases triggered by a sudden irresistible urge on confrontation with a suitable stimulus and powered by an inclination towards instant gratification (adapted from Rook, 1987).
Physical retail stores have for long leveraged their shop windows and in-store spaces as well as locational advantages to induce impulsive buying as soon as customers enter the store. Impulse buying constitutes between one third to two-thirds of consumer departmental store purchases. 80% of all shopping trips demonstrate impulsive buying behavior which definitely leads to an additional increase in sales.
In the new digital shopping reality, a majority of customers will shift to digital shopping. Will the consumer be equally susceptible to impulsive buying behavior in a digital world? What are the chances that mere visual cues would be enough to trigger impulsive purchases? Would touch, feel, sound, taste, texture, etc., all play a subordinate or unimportant role henceforth?
In pandemic times the “sudden irresistible urge on confrontation with a suitable stimulus, powered by an inclination towards instant gratification” which constitutes impulsive buying behavior would be naturally dampened. Since impulsive buying behavior offered so much more in sales to businesses, online retailers cannot afford to let it go unaddressed.
Retail stores will have to fill this gap between triggers of impulsive buying behavior that were/are available in a physical setting and the absence of those cues in a digital setting. Possibly, one way of filling the gap would be by offering value-loaded and price-light offerings. This could still trigger impulse buying behavior in a world of declining purchasing power and over-cautious sentiments of customers.
Rational strategies can be employed to mitigate buyers’ anxiety through well thought out planogramming (product display strategy), improved suggestions for related products, more nuanced usage of showrooming and we brooming techniques leveraging experiential marketing, immersive experiences, omnichannel retailing – being wherever the customer is – click and collect options. These might be effective in increasing the chances of creating a perfect environment for digital impulsive buying behavior.
From Real to Virtual
As a large number of businesses move online, they are exploring various measures to induce impulsive buying behavior virtually and rationally. Marketers are strategizing to trigger the same which can only be achieved with meticulous planning and remunerative strategies offering exceptional consumer experience.
Change of strategies from one to many, to one to one through product demonstrations with more visual elements than written descriptions, live streaming shopping, deploying an online consultant for the live shopping experience, offer based free trials, relevant complementary product suggestions and reminders depending on time zones should be augmented. Product- promotion pairing can be accentuated based on the shopper’s propensity to buy impulsively through analysis using AI and ML by keeping a track of the items added to the cart while checking out. Cross-selling through impulse buying can also be strategically built around household items like toilet paper and hand-wash by suggesting them as additional products for free shipping with relatable products in the cart.
From the right product, place, and time to the right purpose, performance, and personalization – there has been a dramatic shift in consumer demand mindset. Emotion is the key now and the connection between people and brands will play a crucial role. Fashion becomes an emotional treat causing a release in a time of distress like a pandemic. So, people who shop for entertainment, positioning of products like mild cosmetics to look good online should be deeply rooted in psychology and driven by emotions. Online group purchases can be the new blueprint to hit the right chord of human psychology where FOMO (fear of missing out) will lead to more impulse buying among friends and relatives.
Since impulsive buying is uniquely attributed with instant gratification, it can be achieved by the following ways among others:
1) Robust offer management can be reinforced through “Phygital” stores – Physical stores with digital experiences where a consumer can experience numerous outfit combinations digitally, especially when trial room usage is being discouraged due to the chance of infections.
2) Encourage Buy Online and Pick up In-Store (BOPIS) to reduce the risk of buying impulsively, by offering customers the opportunity to physically touch and feel the impulsively bought products online.
3) Use geofencing tools tactically to entice customers in the vicinity of physical stores to indulge in impulse buying with a combination of physical and digital cues.
Consumption never stops. It fluctuates and this fluctuation creates a different pipeline which has to be decided ahead of time. Facebook Jio deal can be a good platform to encourage impulse buying in the present scenario as compared to Amazon, where people primarily go for planned purchases. Facebook shops too are focused on low involvement products and are designed to help a visitor wander around without any specific buying intention – the perfect environment for impulse buying.
The recession might be a perfect time to grow market share for some brands since most other brands will be stagnating. They should place ‘people’ above ‘profits’, spread optimism, and adopt an omnichannel presence in these times for better revival.
But the question arises: will it affect offline retail and impact impulse buying behavior?
According to research, consumers still prefer F2F (face-to-face) and touch and feel buying modes, after consulting with retail store assistants. Therefore, the digital shift will not be all-encompassing but maybe a majority of the online shoppers would like to go back to their old ways once the pandemic recedes – but “when” remains a mystery yet.
What do you think? Will consumption now be just necessity-based or anxiety will drive customers to spend more? Will impulse buying behavior suffer in the absence of physical cues or will marketers find a solution and continue to woo the “urge-driven” impulse behavior in Covid times?
Authored by: Shakshi Agarwal and Aayush Goel, Great Lakes Institute of Management, Gurgaon.