Marketing is all about influencing consumer buying behavior. New Geo-targeting marketing technologies and personalized pricing offers can have a major impact on buying behavior. One such impact is on impulse buying.

Consumers are the central focus of businesses that sell to consumers (B2C). To be successful they must understand consumer buying behavior including what they buy, why they buy and how they buy.

The consumer purchasing process is generally described as a five part process:

1. Problem recognition (awareness of need)
2. Information search (research)
3. Evaluation of alternatives
4. Purchase
5. Post-purchase evaluation

Marketers attempt to influence consumer behavior during all stages of this process. The factors influencing this process are way too detailed to discuss in this particular post.

The exact steps and time spent on them are influenced by the type of purchase. Based on the type of purchase, consumer buying behavior can be classified into four types:

• Routine/programmed behavior
• Limited decision making
• Complex/high involvement (extensive decision making)
• Impulse buying

The purchasing decision process can vary, even for the same product. Consider the following. If you are hungry, you may use a very limited decision process in the selection of a restaurant. Convenience may be the driving factor. Now consider selecting a restaurant to celebrate a very special occasion. The amount of involvement in the decision making will increase dramatically.

The amount of involvement also has a bearing on what kind of advertising appeal is most effective. My post on this subject can be found here.

When Do You Use Rational Versus Emotional Advertising Appeals?

Let’s consider impulsive buying and the factors influencing it. Impulse buying is a buying behavior characterized as unplanned, spontaneous, immediate, unconscious and emotionally driven.

Impulse buying is big business, It is estimated that 40 percent of all money spent is through impulse buying. That includes all money spent on Internet e-commerce sites as well according to User Interface Engineering (Uie.com). Based on figures from the Department of Commerce, that 40 percent translated into $4.2 trillion attributed to impulse buying during the last quarter of 2010 (eyesurf.info). Thanks to them for the following graphic as well.

The figure is even higher for grocery stores where approximately 60 percent of all purchases are impulse buys. Grocery chains are particularly adept at using both in-store and promotional strategies to maximize their shoppers’ impulse purchases.

Just like the rest of the consumer buying process, impulsive buying is affected by a large number of things, including social and cultural influences; promotional activities and the environment of the store or user experience of e-commerce sites. There is one factor that stands above all others though…the perception of lower pricing.

The impact of perceived lower prices: Marketing research studies estimate that 88 percent of impulse buys are affected by the perception of lower prices when visiting both brick and mortar and online stores.

Consumers are thought to use a mental accounting as they shop. When they encounter unanticipated savings, a positive emotional response takes place. Not only are consumers likely to buy the product with the unanticipated savings, they now are more likely to consider buying other products as well. 

The consumer experiences psychological income. The unanticipated windfall has created additional income in the mind of the consumer that can then be spent on other unplanned purchases.

To produce psychological income, stores use sales and clearance promotions that aren’t specifically advertised. They also use coupons within the store that are intended to be used as part of that particular shopping visit.

Personalized Pricing and Impulsive Buying: In my last post, I discussed how a few grocery chains are moving to personalized pricing as part of their offers to consumers while they are in the store. The technology allows them to provide real time offers and personalized pricing for products while the consumer is passing in front of the product. You can view my post here.

Personalized Offers Now Include Pricing

Geo-targeting marketing technology has the potential to significantly increase impulse buying of the product promoted. A further benefit is that the unanticipated savings will increase the likelihood that the shopper will make other unplanned purchases as well.

Retailers should utilize the rapid consumer shift to mobile devices as a way to increase impulse sales. Whether passing a restaurant in your car or a box of cereal with your shopping cart, businesses now have an easy way to reach you in a very personal way and increase your psychological income.

The result can be a significant increase in unplanned purchases.

What kinds of things trigger your unplanned purchases?

How do you feel after “discovering” a great buy?

How do you as a marketer increase impulse sales?

Leave your comments so that we can all learn from them.