Splurchase! The how and why of the impulse buy

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We like to think of ourselves as sensible shoppers. As rational consumers who compare prices, evaluate quality, calculate costs and reach for cash or credit card only after careful reflection. The truth is, however, that many of our purchases – even big-ticket items – are all too often spur of the moment decisions we may later struggle to justify even to ourselves.

Surveys have shown that nine out of ten consumers impulse buy at least one item per shopping trip, with more than half admitting to as many as six. Over a lifetime this has been estimated to amount to an individual spend of around $80,000.

So what sort of things do people buy on a whim?

When I interviewed London shoppers, their answers ranged from clothing to smart phones, cars, and a $2,000 mountain bike to a brand new home. You can see some of these interviews on www.impulsive.me.uk.

In the USA and UK alone, shoppers currently spend an estimated $38 billion a year on impulse buys, or ‘splurchases’ as some retailers call them. Approximately 62 per cent of US supermarket and 80 per cent of luxury good sales comprise impulse purchases. In Britain these account for between 45 and 100 per cent of turnover.

The reasons why consumers part so impulsively with their cash have been the subject of extensive studies.

One of the earliest to investigate the topic was William Applebaum of Stop & Shop Inc. (1) in 1951. He pointed the finger of blame at advertising and marketing. A charge which, with good reason, is still made today.

In 1962 Hawkins Stern, an Industrial Economist at the Stanford Research Institute in Southern California identified four main types of impulse buy.
(1) Pure impulse buying: is a novelty or escape purchase, which breaks a normal buying pattern.
(2) Reminder impulse buying: occurs when a shopper sees an item or recalls an advertisement or other information and remembers that the stock at home is low or exhausted.
(3) Suggestion impulse buying: is triggered when a shopper sees a product for the first time and visualises a need for it.
(4) Planned impulse buying: takes place when the shopper makes specific purchase decisions on the basis of price specials, coupon offers and so forth. (2)

Retailers devote much time and money to identifying the most effective ways of pressing each of these four ‘buy buttons’ in the customers’ brains. Some of the techniques used for this purpose will be described in future blogs.

During the 1980’s, Dennis Rook, a Research Associate with DDB Needham Worldwide, suggested that impulse buying – which he described as “pervasive…extraordinary and exciting” – occurs: “When a consumer experiences a sudden, often persistent urge to buy something immediately. The impulse to buy is… prone to occur with diminished regard for its consequences” (3)

In the past, perhaps due to the lack of perceived control with which it is associated, many psychologists shared the same negative view of impulse buying. More recent research suggests, however, that shoppers do not, for the most part, consider it a mistake to make spur of the moment purchasing decisions. (4) Only around one in five express any regret for their impulse buys with four out of ten claiming to feel good about them. (5)

While shoppers often blame their lack of willpower, the truth is that their impulse buys owe as much to the sophistication of modern marketing, advertising and retailing strategies as to human weakness.
“Marketing and advertising prey on mindless processing by both encouraging it and exploiting it”, comments Erika Rosenberg of the University of California at San Francisco. She points out that their commercial success depends on “people not thinking very much about whether they really need something before they buy it.”

My own studies into the neuroscience of impulse buying, research which involves measuring the implicit and physiological responses of consumers support the notion that impulse-driven shopping is controlled by desires, emotions and sometimes anxiety, operating below the level of conscious awareness. Motives, why the impulse purchase has been made, are only then consciously rationalised and explained. This is why the most effective market research doesn’t just ask people why they behave the way that they do.

So how might you save some money by shopping more mindfully and less impulsively? Here are six suggestions.
1] Make a list and stick to it. A list provides a focus and keeps you alert.
2] Avoid shopping for food when hungry. In one study I conducted, hungry shoppers not only bought significantly more food but more high fat and high sugar foodstuffs.
3] Use clicks and bricks. Compare prices and offers on-line first. Do the initial window shopping in the calm and familiar surroundings of home before checking out the stores.
4] Before closing a deal on a high-ticket item, walk away and consider it again in a new and different location. The words every sales person dreads are ‘I’ll think about it’. They know that when customers do think about a deal they often walk away from it.
5] Retailers have a variety of proven techniques for creating an emotional desire to buy. I will be describing some of these in a future blog. For the moment just bear in mind that a modern shopping mall or supermarket is actually a giant machine design to sell things.
6] Good sales people will be friendly and helpful. Just keep in mind when interacting with them that being friendly is not the same as being your friend and that they only person they have any reason to help is the one who pays their wages. And that is, only indirectly, you!

David Lewis, Mindlab

Mindlab offers the most accurate and effective market research available because we don’t just ask people what they think, we find out how they feel.

References

(1) Applebaum, W. (1951) Studying Customer Behaviour in Retail Stores, Journal of Marketing. Page 172 – 178.
(2) Stern, H. (1962) The Significance of Impulse Buying Today, Journal of Marketing. (April): 59 – 60.
(3) Rook, D. W. (1987) The Buying Impulse, Journal of Consumer Research.14, September: Pages 189–199. Quoted from page 191.
(4) Hausman, A. (2000) A multi-method investigation of consumer motivations in impulse buying behavior. Journal of Consumer Marketing. 17 (5): 403-417.
(5) Rook, D.W. (1987) op. cit.


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Why Brits are Seeing Red over Russia

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Britain’s dislike and distrust of Russia goes deeper than publically expressed opinions suggest.

Using a cutting-edge test of implicit, subconscious attitudes which probes the individual’s innermost psyche, researchers at Mindlab investigated the nation’s opinions about Russia immediately before and just after the Winter Olympics in Sochi, then following the referendum in Crimea.

As Figure 1 below shows, openly expressed views on Russia (explicit responses) were consistently, if only mildly negative on all three occasions, reaching their most negative point after the take-over in Crimea. In contrast, our subconscious (implicit) dislike of Russia is far more intense than these publically voiced criticisms would suggest.   As Figure 2 shows, the Olympics had a positive impact on people’s subconscious attitudes towards Russia, but this effect was undone by the controversy in Crimea.

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Publically expressed attitudes towards Russia were negative at all three time points. It is only when looking at implicit attitudes that we see the positive effect of the Games and the negative effect of the controversy in Crimea on people’s feelings towards Russia. These subconscious feelings drive our actions to a far greater extent than our consciously held views, and this finding illustrates just how deep antagonism towards Putin’s Russia is in the UK.

This study shows how sensitive implicit testing is to these changes in attitudes. Simply asking how people feel about Russia would have missed these more subtle, subconscious changes that occurred in response to these events. This type of testing can be used to track how people really feel towards brands, politicians, products or people. Self-reported responses often miss the subtletes of opinion shift.

“Mindlab offers the most accurate and effective market research available because we don’t just ask people what they think, we find out how they feel.”
Duncan Smith, Mindlab

Notes to reader:

A total of 621 UK adults were questioned and tested for their implicit (subconscious) attitudes using a modified form of the Implicit Association Test (IAT) on: 28th/29th January 2014; 24th/25th February 2014 and 17th/18th March 2014.

For a full report or further details on the research mail@themindlab.co.uk
 


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Subliminal Selling by Dr David Lewis

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Over a six-week period, in the summer of 1957, fifty thousand Americans became the unwitting Guinea pigs in a mind control experiment intended to change advertising for ever.

James McDonald Vicary, a 42-year-old market researcher, claimed to have installed a subliminal projector of his own design in a New Jersey movie house. During the run of Picnic, a popular romance film his machine flashed two advertising messages onto the screen. One read: ‘Thirsty? Drink coca-cola’ the other ‘Hungry? Eat popcorn.’

Because each was displayed for just 3 thousandths of a second, audiences remained unaware of them at a conscious level. Yet, according to Vicary, by influencing their subconscious, he increased Coke sales by 18% and of popcorn by 58%.  “This innocent little technique,” he boasted, “is going to sell a hell of a lot of goods.”  Far from applauding his ingenuity, however, press and public were outraged. Journalists accused him of ‘brainwashing’ the American people while Newsday described his device as ‘the most alarming invention since the atomic bomb.”

Five years later Vicary admitted it had all been a hoax. A publicity stunt designed to generate business for his struggling firm.
Largely as a result of his deception and the furore it generated  ‘subliminal advertising’ virtually vanished from mainstream research for nearly half a century.  Subliminal advertising not only works, it is probably at work in a supermarket or shopping mall near you.
In one study, Johan Karremans and his colleagues at the Department of Social Psychology at Radboud University, Nijmegen, displayed the name of a popular brand of iced-tea, for 23 milliseconds, as their subjects worked on a computer based task. Later, when offered a choice between iced-tea and mineral water a majority chose the tea. (1)

Equally effective is supraliminal priming. Here, although in plain sight, the priming is seldom noticed due to what is termed Inattentional Blindness. We don’t perceive what we don’t attend to.
Take in-store music.

Charles Gulas at Wright State University and Charles Schewe at the University of Michigan found baby boomers were more likely to buy things against a background of classic rock. Yet two-thirds were unable to say what music was playing as they shopped. (2) In another study, wine buyers exposed to classical music did not buy more wine but they bought more expensive wine. (3)

Aromas too play a far more influential role as supraliminal primers than generally realised.  During a ten-day study, Lieve Doucé and her colleagues at Belgium’s Hasselt University, infused a bookshop with the scent of chocolate for half its opening hours. Despite being too subtle to be easily detected, the aroma increased the time customers spent browsing, the number of titles they reviewed and the number of books bought. The greatest effect was on books about food or drink together with romantic novels sales of which increased by an impressive 40 percent when chocolate aroma was present. (4)

So the next time you shop, ask yourself.  “Do I really want to purchase this item – or is my subconscious being manipulated to make me think I do?

Dr David Lewis-Hodgson

 

References

(1) Karremans. J. C., Stroebe, W. & Claus, J. (2006) Beyond Vicary’s fantasies: The impact of subliminal priming and brand choice, Journal of Experimental Social Psychology 42, 792–798.
(2) Gulas, C. S. & Schewe, C.D. (1994). Atmospheric segmentation: Managing Store Image With Background Music, Enhancing Knowledge Development in Marketing, Ravi Achrol & Andrew Mitchell (Eds.), Chicago IL: American Marketing Association, 325-330.
(3) Milliman, R. E. (1982). Using background music to affect the behaviour of supermarket shoppers. Journal of Marketing,  46 (3), 86-91.
 (4) Doucé, L., Poels, K., Jansssens, W. & De Backer, C. (2013) Smelling the books: The effect of chocolate scent on purchase-related behavior in a bookstore marketing: The role of fragrance and its interaction with other atmospheric and non-atmospheric cues in a shopping experience, Journal of Environmental Psychology (July)


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Is Neuromarketing too expensive?

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Neuromarketing is really expensive and time-consuming. Or is it?

It is well documented that most of our decision making is done outside of conscious awareness and is influenced by factors unknown to us. This non-conscious processing can’t be ignored if you want to understand consumer decision making, however, it usually is. Traditional market research techniques rely on explicitly asking people what they think and this only gives part of the real answer to why people make consumer decisions.

Companies looking for effective market research are increasingly turning to new innovative techniques and methodologies adapted from behavioural economics, neuroscience and psychology, applying them directly to consumer choice.

The reason why people are interested in these solutions is simple – Many marketing directors don’t trust the results of traditional market research. We increasingly find that traditional market research is being used as a comfort blanket – a buffer, something to blame when campaigns don’t succeed as expected. A client recently told me that he uses market research because he has to and he treats the outcomes as nothing more than an opinion and not fact.

Neuromarketing offers exceptional insight into decision making process but many of the brain imaging methodologies employed are invasive, time-consuming and expensive. There is often a leap of faith required for marketing and research professionals to move from using surveys and interviews to wiring up people’s brains or putting them in a scanner. What has become clear is that the middle ground needs populating where marketers can access these insights quickly, easily and at a lower cost.   You can however get useful insight into the processes underlying consumer attitudes and decision making without using expensive imaging technology. Running tests online allows you to check the effectiveness of communications quickly, inexpensively and easily with a diverse demographic and much larger sample sizes than in-lab studies.

One of the key tools is the Implicit Association Test (IAT). IATs can measure implicit or unconscious attitudes and beliefs about products and brands. The IAT bypasses social desirability biases and explicit processes to examine underlying processes. IAT’s are easily administered online and can be used to evaluate attitudes and reactions to brands, advertisements and packaging design.

These new, scalable proprietary tools measure what people think and feel on both conscious and non-conscious levels. The future of effective communications checking will allow companies to apply these techniques in a bespoke, cost effective and useful way giving valuable insight into consumers’ likely future behaviour. All too often consumers do not do as they say. To quote a busy CEO: ‘Cut the crap – tell me what people REALLY think’.

Duncan Smith, Mindlab

Mindlab offers the most accurate and effective market research available because we don’t just ask people what they think, we find out how they feel.


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New Frontiers

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Navigating the New Frontier

With the increasing fragmentation of many traditional marketing media and the intensity of competing messages on the rise, those in marketing, advertising and retailing must work ever harder to capture the attention of consumers and persuade them of the merits of their propositions.

Perhaps one of the most challenging media through which to communicate with the consumer is at retail where the noise of competitive activity is at its greatest and the window of opportunity to convey a message at its shortest. Nevertheless the returns, given that the media continues to touch a mass audience on the verge of making a purchase are potentially significant, and for this reason in-store marketing and communication has seen a phenomenal rise in attention and budget over recent years.

A report published by Deloitte in 2008  notes that: “In-store marketing tactics have not only become actively embraced by marketers of consumer packaged goods, many rank it as one of their most effective tools. 75% of manufacturers and 86% of retailers studied ranked in-store marketing among the top four activities in terms of gaining strong ROI.”

The challenge of the in-store medium presented to marketers is also one shared by those striving to measure the efficacy of in-store activity since conventional market research approaches fall flat in the face of the requirement to establish whether a shopper, in the matter of seconds that they have spent in a particular aisle, has seen, engaged with, made sense of and responded positively to a message.

Often in-store marketing, cannot be recalled by shoppers when posthumously interviewed over their awareness. Within the fleeting seconds that a shopper is exposed to an in-store communication their interaction with it is typically at a non-conscious level. As a result they are unable effectively to articulate their response to it, post-rationalising whether or not it appealed if questioned.

As the American psychologist Robert Zajonc has commented: “We sometimes delude ourselves that we proceed in a rational manner and weigh all the pros and cons of the various alternatives. But this is probably seldom the actual case. Quite often ‘I decided in favour of X’ is no more than ‘I liked X’. We buy the cars we “like,” choose the jobs and houses we find “attractive,” and then justify these choices by various reasons.”

This suggests that familiarity, likeability and other emotional responses are significantly more likely influence a decision to buy than calm and reasoned deliberation.

Can neuroscientific techniques provide us with some of the answers to our problems with respect of evaluating in-store marketing activity?

The technologies which underpin Neuromarketing are capable of capturing non-conscious attitudes, brain and other associated physiological activity objectively and in great detail however, to date, the majority of measurement exercises have been performed in relatively controlled conditions and have focused on the evaluation of stimuli such as TV advertising, website and packaging design. There are significant challenges to overcome if we are to transfer these measurement techniques from the laboratory to the real world.

Since the advent of market research in the mid 1900’s the discipline has always been concerned with understanding how and why people make decisions in order to enable businesses to better influence behaviour. The application of these techniques, is in my view, no more than a sophisticated and potentially more reliable means to the same end.

Dr David Lewis-Hodgson

Mindlab offers the most accurate and effective market research available because we don’t just ask people what they think, we find out how they feel.

(1)Deloitte and the Grocery Manufacturers Assn (USA). Delivering the Promise of Shopper Marketing: Mastering Execution for Competitive report. September 2008


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