Impulse Buys: A Positive or Negative Tactic?

Source: CNBC News

The economic principle I’m exploring is that people generally respond to incentives in predictable ways.

 The question I'll answer in this blog post is: What research goes into deciding what products are considered impulse buys?

The article published on Shopify Blogs titled “Impulse Buying: How Retailers Can Get Consumers to Buy More on the Fly by Jessica Bianchi, the manager of online content at Canada Post, demonstrates this economic principle by explaining how companies since the 1950s have used physical proximity and human's tendency to have FOMO to get people to buy impulsively. 

 First, Bianchi goes on in the article to explain how long impulse buying has been a strategy. She explains that ¨Merchants have strategically placed inexpensive goodies around checkout lanes since the 1950s.” This shows how long impulse buys have been successful and why they have continued into present day.

Second, a recent CreditCards.com poll shows that five out of six American shoppers admit to making impulse purchases, 79% of which took place in physical storefronts. This means that the way that marketers have set up impulse buying in physical stores has been super successful. This approach allows consumers to either quickly buy something they forgot about or buy something they feel that will satisfy them.

 Third, according to a trade publication mentioned in the article, here are some reasons why impulse buying is so successful: ¨We’ve been conditioned at a young age to derive joy from receiving new things. FOMO (fear of missing out) is real, except that psychologists call it loss aversion, shopping with conscious intent is a laborious task, we’re hardwired to believe we’re better than average and we buy accordingly, and our drive to save time and money dates back to our primordial friends.¨ For these reasons, impulse buying is very successful. As humans we have flaws and it is super interesting how marketers take it into their advantage. This can definitely be viewed as a positive or negative thing, but whichever way it is interpreted, it is successful.

In my next blog post I will research the question: How can marketers make commercials effective and memorable?