Tech Guest Viewpoint: Driving Impulse Buy with Technology
The term “impulse buy” has a negative connotation to many. Picking up that guilty pleasure snack in the checkout line at the supermarket, that gadget you don’t really need, or those shoes that are on sale all qualify.
But at its core, the impulse buy is when urge meets availability, and it’s what every retailer would like more of. The choreography of the impulse buy is actually similar to a longer, more researched purchase. The primary differences being the length of time from decision to buy to purchase, the lack of second guessing the purchase, and potentially, the cost of the item.
There are waves that are converging that indicate 2016 could be the year when the impulse buy will be more likely than ever before based on a few simple buying drivers. These include the ability of marketers to provide the right offer at precisely the right time and the rise of mobile payment technology.
The impulse buy equation is simple: Increase in Purchase Probability = Attractive Product Message + Targeted to Specific Buyer at the Right Time + Ease of Purchase
Now, buying a new SUV is a lot different than picking up a candy bar at the supermarket check-out, but based on the adoption of new technologies by both vendors and customers, the ability to drive more impulse buy-like behavior could be in our near future. Let’s look at the components of the impulse buy equation.
Attractive Product Message
How attractive a product message is to a consumer depends on many factors, including age, interests and social background. However, marketing’s ability to use Big Data to target both known and unknown users is growing at a rapid rate. An recent IBM study found that 62% of retailers report using Big Data analytics to drive competitive advantage for their businesses.
For example, if analytics show that adults over 40 tend to buy golf clubs and accessories in the afternoon the week before a sunny Saturday in their area, an attractive message could be an email or text offer for a new driver with free shipping sent at lunch on Wednesday.
This same technique can be used through alternate channels such as advertising or content marketing delivered by push notifications through a mobile app or pull delivered by a responsive website available to mobile or desktop visitors.
Targeted to Specific Buyer at the Right Time
Exciting news for retailers is the emergence of Bluetooth beacon technology that promises more instant connectivity to the smartphones of visitors at brick and mortar locations. It is now possible to send a coupon to a shopper passing by sporting goods, or to promote a sale that’s happening between 3:00 and 4:00 PM.
Beacons have great potential to employ similar methods to track a customer’s movements walking through a brick-and-mortar shop just as websites track and react to a visitor clicking through an online store.
Ease of Purchase
The easier it is to buy an item, and the less that purchase is connected to what the customer sees as “real money,” the better it is for the vendor. Amazon has its “One-Click Ordering” which virtually eliminates the customer second guessing a purchase as they review their purchase and shipping information.
And that same approach is now being applied more and more in physical locations with proximity mobile payments. Companies such as Apple, Google, Microsoft, Facebook and Amazon are rolling out technologies to make mobile buying quicker, easier and more impulse purchase-friendly. An eMarketer.com study predicted that this type of payments will increase from $27 billion in 2016 to $210 billion in 2019.
No one is saying that in the next five years the average consumer is going to impulse buy a new Escalade or pick up a Rolex in the checkout line. But based on the adoption of new technologies, the probability that retailers can leverage impulse buying behaviors both in brick-and-mortar stores and online seems extremely high.