Impulse/Unplanned Purchasing

Impulse buying is defined as a sudden strong tendency to buy products which the customer had not planned to buy and has bought them without deep contemplation (Tifferet and Herstein 2012).

The action of impulse buying is not to be confused with compulsive buying, in which consumers “feel a tendency for extreme buying of goods and services which they do not need and even sometimes cannot afford”, particularly to counter negative feelings (Tustin 2011).

Here’s a little video that explains the difference between typical impulse buyers, and slow buyers.

There are endless multitudes of stimuli and techniques that encourage impulse buying in both in store and online contexts, a couple of the main ones will be discussed here, including sales promotion, ease of transaction and stimulating purchase desire (Lo 2016).

Sales Promotion

With economic uncertainty a constant fixture in society these days, people are paying more attention to where their money goes, so making purchases have utilitarian benefits for consumers makes impulse buying easier to stomach for consumers. Sales promotions such as buy one get one free, price reductions, reward schemes and free gifts with a purchase add extra value to products purchased (Lo 2016).

In addition to this, a sense of urgency is created in consumers when promotions such as limited time only sales, group-buying promotions which only apply for the first x amount of people to purchase, and limited products for sale are initiated.

These types of sales promotions can apply in online and in store contexts.

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Ease of Transaction

When it comes to impulse buying, the easier the process, the more likely a consumer will go through with the purchase.

Online stores tend to utilise free and fast shipping in addition to the option of multiple payment methods, home deliveries, an easy registration process, and fully electronic purchase process which both in store and online stores have the option to use (Lo 2016). In addition to these methods, the option to Paypass most carded payments in recent years means that in store purchases have become significantly quicker, leaving less time for the impulse to buy to simmer down and disappear.

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Stimulating Purchase Desire

Consumers’ purchase impulses can be triggered by certain visual elements, such as emotions caused by certain colour combinations in displays and in eye-catching large titles on sales promotion announcements (Lo 2016).

In addition, pre-purchase uncertainty is reduced by the addition of product reviews and fitting rooms into the buying process, the latter of which can be applicable in the online shopping scene in addition to an in store context in the form of virtual fitting rooms. Sampling, demonstrations, and testing all assist in easing pre-purchase uncertainty and help consumers visualize themselves using the products in everyday scenarios (Lo 2016).

Promotional information and catalogues also attract impulse buying consumers when distributed (Lo 2016).

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These techniques are necessary to increase impulse/unplanned purchases, but there has been some debate as to if online shopping has made it more difficult to capture those sales from impulse buying. The general consensus is that there are some extra steps brands have to take to maintain impulse purchases online, such as developing partnerships with other brands i.e. Pizza Hut and Hulu, and identifying impulse shoppers using platforms such as Facebook in order to make the process easier for those people (Taylor 2015).

References

Lo, L 2016, ‘Motivation for online impulse buying: A two-factor theory perspective’, International Journal of Information Management, vol. 36, no. 5, October, pp. 759-772

Taylor, K 2015, ‘The ‘impulse buy’ is dying — here’s how companies are trying to revive it’, Business Insider Australia, 14 November, viewed 7 May 2017, <https://www.businessinsider.com.au/e-commerce-impulse-buy-category-2015-11&gt;

Tifferet, S, and Herstein, R 2012, ‘Gender differences in brand commitment, impulse buying, and hedonic consumption’, Journal of Product & Brand Management, vol. 21 no. 3, pp. 176-182

Tustin, D 2011, ‘The prevalence of impulsive, compulsive and innovative shopping behaviour in the economic retail hub of South Africa: A marketing segmentation approach’, African Journal of Business Management, vol. 5 no. 14, pp. 5424-5434.

 

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Exploring the ‘Veblen Effect’

The Veblen Effect – we’ve all experienced this social phenomena yet most of us are unaware that it even has a name.

Pepell Lynne describes the Veblen Effect in his economic journals as the purchase of “brand name products that are functionally equivalent to cheaper products but confer a social status valued by the consumer” (Pepall 2016).

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It is further described as the “setting of canons of taste on the part of the wealthy leisure classes, which members of lower classes seek to emulate” and has previously been associated with the ‘bandwagon effect’ and the ‘snob effect’. The ‘bandwagon effect’ states that a positive externality occurs more people own the same product and the ‘snob effect’ states the opposite, as a negative externality occurs with increasing ownership (Kuwashima 2017; Veal 2016).

At this point, I must stress that there is a significant difference between cheap goods, quality goods, and luxury goods. The Veblen Effect focuses on quality vs luxury goods as opposed to cheap vs quality or cheap vs luxury items. For example, the $15 purse from Kmart that falls apart after a month vs the $50 purse that holds its own for years vs the $2000 purse you bought because it holds its own for years and has the Gucci logo on the side (Miller 2017).

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So and so has found that there are four characteristics that influence consumers to purchase luxury goods, these being need-for-uniqueness, vanity, status-seeking, and susceptibility to interpersonal influence (Kastinakas 2011).

Luxury brands attempt to appeal to these aspects of consumer’s personalities in advertisements such as this one for Gucci Premiere perfume.

Gucci’s marketing team has used celebrity endorsement to appeal to consumers’ sucseptibility to interpersonal influence, and the colour gold to appeal to the status-seeking behaviour of consumers. In addition to this, vanity and need-for-uniqueness have also been touched upon by the use of visual cameras and lights that suggest a photoshoot environment, hence making people who purchase the Gucci perfume feel like celebrities.

Other sources have pinpointed that self-esteem is the main reason that when people do splurge on luxury goods, they have to splurge on the genuine article as opposed to an almost identical cheaper knock-off, and this relates to obtaining a sense of belonging and giving in to hedonistic values. (Page 2017)

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Veblen himself “saw this process as unjust, invidious and wasteful”, and similar to the vulturous marketing teams at Gucci and other luxury brand names “he did not explore wider implications for personal well-being” (Pepall 2016).

Consumer debt in the world has reached an all-time high, yet consumers still find themselves sucked into the illusion that they need to wear $5,000 shoes to feel good about themselves. Why?

The pricing and promotion of these goods has been meticulously orchestrated by marketers. What qualifies these goods to be sold at such a high price? Are they made of unicorn dust? Do they have a map to the fountain of youth stitched into their soles?

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Marketers at luxury brands make consumers believe that they will instantly feel like celebrities if they purchase their products, when in reality they might feel satisfied for a few days before they realise they’ve maxed out their credit card on a misplaced sense of self-worth. I firmly agree with Veblen in his distaste for the process, however hypocritical that might be.

References

Kastinakas, M, Balabanis, G 2011, ‘Bandwagon, Snob and Veblen Effects in Luxury Consumption’, Advances in Consumer Research, vol. 38, pp. 609-610

Kuwashima, Y 2015, ‘Structural Equivalence and Cohesion Can Explain Bandwagon and Snob Effect’, Annals of Business Administrative Science, vol. 15, November, pp. ??

Miller, G.E. 2017, ‘Cheap Vs. Quality & Quality Vs. Luxury’, 20somethingfinance, Weblog post 13 February 2017, <https://20somethingfinance.com/cheap-vs-quality-vs-luxury/&gt;.

Page, V 2017, ‘The Psychology Behind Why People Buy Luxury Goods’, Investopedia, March 15, viewed May 7 2017, <http://www.investopedia.com/articles/personal-finance/091115/psychology-behind-why-people-buy-luxury-goods.asp&gt;

Pepall, L 2016, ‘The “Veblen” effect, targeted advertising and consumer welfare’, Economics letters, vol. 145, August, pp. 218-220

Veal, A.J. 2016, ‘Leisure, income inequality and the Veblen effect: cross-national analysis of leisure time and sport and cultural activity’, Leisure studies, vol. 35, no. 2, March, pp. 215-240

My Favourite Consumer Experience

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Zambreros. A mere passing mention of the place sends me into a blissful state, accompanied by an aching stomach and a quick calculation of my available dollars.

If I’m honest with you, I could probably eat Zambero’s double black bean and rice burritos with sour cream, guac, garlic sauce, the whole shebang every day for the rest of my life and not get sick of how every single ingredient compliments the others to create a smooth flavorsome harmony of flavors in my mouth. But let’s be honest here, it’s not just the burritos that keep me coming back.

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Let’s have a quick look at why Zambrero will always have my heart when it comes to food, it all begins with their humanitarian focus. Their plate 4 plate initiative means that for every burrito or bowl purchased at Zambrero, a meal is donated to a person in a developing country. This means that not only are your tastebuds singing for joy during this experience, but your heart is often glowing just a little bit as well. This counters the quilt you may sometimes feel about spending more than $10 on fast food in one go.

Some other notable points that make eating at Zambreros my favourite consumer experience include the trendy and earthy design of the store, the fact that everyone in my hometown flocks to Zambreros whenever they come into town, and the friendly attitudes of the people who work there, which are obviously fueled by the soul-feeding goodness of burrito bowls.