For routine shopping trips, shoppers have an internal mental calculator that they use to regulate their purchases. Given this — especially in the face of a recession — why do shoppers buy on impulse? The answer is that about 25 percent of the shopper’s total budget is subconsciously set aside for opportunistic buys.
According to a 2010 study by Dr. Kirk Wakefield at Baylor University, shoppers don’t deviate much from their budgets, but they still make plenty of impulse buys. Dr. Wakefield says “in-store slack” is part of a mental budget that shoppers know they’ll spend, but aren’t necessarily sure on which specific items. He states that “for the majority of consumers, having in-store slack appears to be a rational way to use the store to cue needs and preserve self-control.”
The feeling of having a slack budget, even if it isn’t consciously articulated, is like having spare change in one’s pocket. It’s like having a bit of “mad money.” An insightful article in Marketing Science magazine addressed this issue, framing it within a concept the authors called “the pain of paying.”
The article, by Drazen Prelec and George Loewenstein, states that “… consumption that has already been paid for can be enjoyed as if it were free …” This is because the pain of paying is over and done with. In some sense in-store slack is a freebie; it is like found money because the items bought with it are already “paid for” mentally.
The question is, how can your brand capture the slack budget?
Several kinds of items might be opportunistic buys. These could include a really great sale on paper towels; or a suddenly remembered need like dishwashing liquid. Certainly any of these items qualify for coverage by the in-store slack budget.
However, these are not the only items in the shopper’s slack budget. There are also more indulgent impulse buys — shopper trophies. Understanding shoppers’ “mental accounting,” and related behavior, is key to understanding how to appeal to their slack budgets. Consider this example of mental accounting from Richard Thaler, also writing in Marketing Science:
“Mr. S admires a $125 cashmere sweater at the department store. He declines to buy it, feeling that it is too extravagant. Later that month, he receives the same sweater from his wife for a birthday present. He is very happy. Mr. and Mrs. S have only joint bank accounts.”
Indulgent impulse items, like a cashmere sweater, are “forbidden fruit” for shoppers who are looking to exert self-control. However, when the mental account is designated for “gifts,” for example, it can become an acceptable expenditure. It is interesting to note that people also buy more gifts for others and themselves while on vacation. These indulgences are built into the mental cost of the vacation.
Given a little “mad money,” what are the indulgences in grocery, especially when confronted with so many items? Two years ago, Springer Science published a consumer survey ranking grocery categories on a continuum from want-to-buy to should-buy. High on the want end of the continuum: ice cream, cookies, wine, spirits, tobacco, floral, toys, cards, balloons and cosmetics. On the should end of the scale: milk, household cleaners, vitamins, pet food, egg substitutes and family-planning items.
Not surprisingly, according to this article, the most indulgent impulse buys are the want items: “People behave more impulsively when the outcomes of their decisions will be realized in the near future rather than the more distant future … people are often willing to accept a dramatically smaller immediate payoff, rather than waiting for a larger later payoff.” The want impulse items are tied to immediate outcomes, the promise of instant gratification.
Getting in the Basket
Given what we’ve learned so far about slack budgets, mental accounting and want items, how does a product get into the basket, if it wasn’t on the list? Further, how does it become the shopper’s trophy?
While several effective one-off tactics are available to trigger an impulse purchase, three strategic imperatives can turn it into the shopper’s trophy: 1) The shopper must see the product; 2) The shopper must see the offer as an opportunistic purchase; and 3) The shopper must crave it.
Of course, the product must be seen. Yet, Dr. Herb Sorensen’s work shows that shoppers traverse only 20 percent of a grocery store; the remaining 80 percent is not traveled. That is a lot of merchandise shoppers never see. According to Sorensen: “As a general rule, the whole world pretty well believes that shoppers’ behavior is driven by the products in front of them, or maybe the way in which they are displayed. The reality is that the geographic location is far more important than most imagine.”
Further, not all traversed zones of the store are treated equally. In some areas, shoppers spend more time actually shopping versus visiting or traveling. In a recent discussion, Dr. Sorensen told me, “If you divide the center-store aisles into a 3x3 grid, the right-rear sector sells better than anywhere else. Of course, the perimeter racetrack is best, especially beginning a third of the way to the back of the store on the right.” To be seen, it is more effective to put the product in the shopper’s path (per Sorensen’s observations), than it is to try to lure her down an aisle.
This brings us to the second strategic imperative: being perceived as an opportunistic purchase. An opportunistic purchase is a well-timed chance to gain unexpected, yet desired benefits. It’s a surprise chance to seize something good.
The unexpected benefits themselves could include a surprise sale, such as a great deal on paper towels, or a novel solution to a problem, such as a specially-packed gift basket for an Oscars party. These examples can meet the criteria for opportunistic, slack-budget purchase: surprise, timeliness and value.
Part of timeliness is to present the offer early enough in the shopping trip so that the buyer still has an unspent slack budget. Additionally, the timeliness of the offer may be seasonal or occasion-based, like the Oscars party gift basket or a spring-cleaning bundle. Urgency can drive this perception, too. Absent an occasion, the offer might be positioned as something that must be seized now — “Buy while supplies last” or “24-hour Sale.”
An opportunistic item must be seen as worth the slack-budget allocation. This is value that can be intrinsic to the product, or even something that other people want.
Perhaps most important is selling speed. The product needs to be easy to select; it must be a no-brainer. For every additional “shopper-second” — the time shoppers spend deliberating a purchase — the chance of getting into the basket radically diminishes. Therefore, elements that slow shoppers down must be eliminated.
Too many choices decelerate shopping and decrease sales. While a variety of choices will attract many shoppers, a limited choice will sell product. Consider this pertinent study, cited by Barry Schwartz in his book, The Paradox of Choice:
“Researchers set up a display featuring a line of exotic, high-quality jams, customers who came by could taste samples, and they were given a coupon for a dollar off if they bought a jar. In one condition of the study, six varieties of the jam were available for tasting. In another, 24 varieties were available … The large array of jams attracted more people to the table than the small array … When it came to buying, however, a huge difference became evident. Thirty percent of the people exposed to the small array of jams actually bought a jar; only three percent of those exposed to the large array of jams did so.”
To help facilitate a quick, effective sell, limit the choices. An opportunistic sell won’t happen if there is version confusion. Likewise, other barriers to purchase must be absent. This is easier said than done. Questions about complex usage routines, the relevance of consumption occasions, and price-value equations have no place in this transaction. Issues that take too many shopper-seconds to resolve will detract from the perception of opportunism and result in a lost sale. (Shoppers may be ready to resolve complex issues in-store, but are less likely to do so for an impulse item.)
Create a Craving
If we’ve achieved these first two imperatives, it is possible that our product has landed in the shopper’s cart. It may even be a slack-budget expenditure. But without the third imperative — craving — it is not a trophy.
The quest to create craving is not new. It’s what marketers tackle every day. However, the items on the should end of the continuum could take some lessons from the items in the want end. Let’s keep it simple and look at how the want categories cue impulse.
Shoppers respond viscerally to the possibility of hedonic rewards: the aroma of the baking bread, the silky sheen of a chocolate fountain, the hiss of a soda can opening. These cues are found in nearly every airport and mall. While these are places of immediate consumption, grocery categories might adopt more of these techniques to rev up impulse.
I remember years ago, the Dayton, Ohio, airport had the most wonderful popcorn. The aroma was like a gravitational pull: passengers would be drawn into the vortex of the fresh popcorn smell. Some people would even drive to the airport for this popcorn (it was a small airport). According to Scentair, a retail-scent technology company, the sense of smell is most closely linked to memory. They are right — I still distinctly remember this popcorn smell from more than 20 years ago.
Scent motivates impulse buys. Back in the day, Mrs. Field’s cookies were the ubiquitous temptation in airports. Today, it’s Cinnabon. Smelling something is 80 percent of tasting it — it’s like a “pre-trial” sampling program. Shoppers can taste the product, even before putting it in their mouths.
Further, fragrance has directional pull — the nose can determine where a scent is coming from. This aspect is terrific for retail, where shoppers need to navigate aisles. Finally, tests show that shoppers experience a 40 percent improvement in mood when smelling something pleasant. They can become predisposed to buy.
Imagine a branded popcorn cart being wheeled into the deli section of the grocery store with someone selling little bags of popcorn for immediate consumption. Hungry shoppers would be lured by the siren smell of the popcorn. What if bigger bags of the popcorn were also available to take home? There could be different flavors — cheddar cheese, butter, and caramel nut. If this were a once- or twice-a-year event, it would definitely qualify as a special treat.
Couple this with a television-viewing occasion such as The Miss America Pageant or the finale of an American Idol season. Print the back of the take-home bags with an elimination card for Idol or a bracket template for March Madness. This is the shopper’s trophy. It is the rare product that doesn’t have some sort of hedonic reward attached to it. The brands that have identified these rewards have set themselves apart.
Strangely, family planning is far down on the should list even though fewer hedonics are more sought-after than sex. Trojan has begun to proliferate the category with fun, flanker products, some of which surely help to sell the primary line. Axe deodorant certainly understands hedonics, and has built a brand around it. Dog food is also deeply in the should category, yet pet owners clearly delight in pleasing their pets. Why not have a surprise treat in every bag, like a cracker jack prize for Fido? It should be featured on the front of the bag. (see sidebar)
The shopper’s trophy is often motivated by occasions such as Valentine’s or Mother’s Day. Many shoppers buy poinsettias at the holidays and roses on Valentine’s Day. But shoppers also seek indulgences for themselves and their families on an everyday basis. Why not create another occasion?
I’ll bet many Gen Xers and Millennials are unfamiliar with May Day. Traditionally, on May 1, people would decorate with spring flowers and anonymously leave “May baskets” — small baskets of flowers — on neighbors’ doorsteps. (A similar custom, called “spooking” is emerging around Halloween. Neighbors anonymously leave baskets of treats on doorsteps.)
May Day baskets could be sold — one for the family, and maybe a discount on three — to encourage shoppers to keep the tradition. This event comes with its own historical backstory and easily translates into a fun, family activity. The price and the arrangement must be kept modest and simple to encourage impulse.
A fast, emotional sell can also rely on pictures. Why? Because, according to an article in American Psychologist, “… pictures are recognized faster than words … they elicit affect faster than abstractions, like words do.” The most effective pictures elicit the emotional response of the brand benefit. For example, recently I saw a cartoon elephant close a sale for a woman shopping the tea aisle. The happy elephant made her smile and, according to the shopper, gave her a sense of how the product would make her feel at home. She bought it spontaneously.
The trophy purchase is extra-ordinary. To be a trophy, the product should be positioned as a treat and not something the shopper would normally buy. It is the “normal” category of mental accounting that must be transcended. It doesn’t have to be the Hope Diamond. But it should be something that, in the shopper’s mind, breaks with routine and adds to her spice of life — because the “spice of life” is the real benefit of the trophy.
“ Variety in mere nothings gives more pleasure than uniformity of somethings.”
— Jean Paul Richter (1763 –1826)