Mobile And Impulse Purchases: Perfect Together
Written by Evan SchumanLike any key technology change, mobile retail threatens a wide range of unanticipated consequences. A sharp increase in—or at least a radically different approach to—impulse purchases is almost certain.
StorefrontBacktalk columnist, and Yankee Group senior analyst, Nick Holland this week has a very articulate alternative view, where he sees mobile sharply curtailing or even eventually eliminating impulse purchases. Nick makes some excellent points. But I believe the human nature strength of impulse purchases, along with some of the technical nature of mobile features, makes an increase more likely. Please read both columns and then decide for yourself that I’m right. 
The unintended consequence is a time-honored tech tradition. My personal favorite was a trend first spotted a few years ago by The IHL Group, and it happened to also involve impulse purchases.
IHL noticed that as self-checkout deployments in grocery stores started to soar, impulse purchases plummeted. The reason was simple: Consumers were so focused on trying to handle their own scanning and tendering that they didn’t have time to flip through magazines and be attracted to candy and gum.
Self-checkout, of course, didn’t kill impulse purchases. Grocers wouldn’t let it. The merchants simply moved those impulse items to other places where the consumers weren’t so distracted.
Much the same will happen with mobile. The argument that mobile will reduce impulse purchases has multiple layers—and Nick does a better job than I at explaining it—but a key point is that mobile will greatly facilitate comparison shopping, online research and other data-rich activities that are the natural enemy of emotional impulse purchases.
Although that’s certainly true, it won’t make a dent. Impulse purchases are indeed emotional, and rationality does not come nearly as naturally. For every in-aisle price- and feature-comparison that an Android or iPhone enables, there will be 20 purchases in the heat of the moment. And those impulse purchases will be enabled by mobile.
Consider a movie whose star is wearing a really cute sweater or using an especially intriguing gadget. In the lobby seconds after the closing credits start to roll, consumers will be able to find and buy those items.
That in-the-heat-of-the-moment urge to buy may have easily calmed long before the consumer gets home to a laptop. But the always-on mobile device will—for the first time—enable such emotional instant buys.
Or consider sitting in a subway car when you see someone laughing out loud at a book. You catch the title, do a quick search on Amazon, download the e-book version (or, for you dead tree fans, have it delivered to your house tomorrow) and you’re actually reading that same book while you’re still five stops away from your home station. That’s another impulse purchase that simply couldn’t have happened without a mobile device.
But what about in-store? Much depends on the nature of the product. The mobile-will-kill-impulse-purchases folk will point to the tactile and immediacy elements of touching and bringing home in-store products.
That’s true for some items, but not true for others.
-Marc
December 9th, 2010 at 4:01 pm
The mobile experience will certainly supplement web commerce, it will have a PROFOUND and DRAMATIC affect on consumer’s ability to quickly make purchase decisions at the point of sale, both validating and/or tempering the impulse nature of a purchase. People are still people: “I want it NOW and my wife is in a good mood” isn’t affected by application form.
December 21st, 2010 at 12:14 am
I agree with you that mobile will enable a whole new level of impulse shopping, such as the Amazon example, but I also agree with Nick that mobile will empower consumers to perform more comparison shopping in advance of their purchase, especially for larger ticket items. That said, there are things that retailers can do to encourage impulse purchases, even for larger ticket items. For example, a comprehensive and well-executed price match policy can remove all doubt from the shopper’s mind directly at the point of sale, and enable them to buy with peace of mind. Such a policy should include not only price matching against the store’s own website and all competitors’ local stores and websites, but additionally protect the shopper against price drops for the period of the price match policy (e.g. up to 30 days after the purchase).
Imagine an experience where you get no hassles when you claim your price match, or even better, where the store sends you a gift certificate when the price drops after you bought a product there – the positive word of mouth would be at least as great as the negative word of mouth currently experienced so often when you have to jump through hoops to get your price match, and it becomes clear that the retailer is not living up to its word.
Mobile is a great enabler, and greatly reduces the information asymmetry that has historically existed between retailers and consumers. The key issue for retailers is not to ask how they can react to the changes brought about by mobile, but rather to think ahead and ask themselves how they would serve the customer if the customer knew everything about their business – because that’s pretty much going to be the case within the next few years.
January 6th, 2011 at 12:04 pm
Results are out. Mobile sales have proved higher total market baskets, LESS off pricing (so are we assuming price matching is paramount?)and increased gross margin. Current mobile shoppers have greater dispensible income, and because once they know they need or want something, they buy it! Less price comparing!
The transparency of social media will put retailers “back on their toes”, this SHOULD result in better trained store staff. And also a “smoother” ecommerce transaction.
Happy New Year!
January 6th, 2011 at 12:14 pm
Mark’s stats are fair, but let’s put this into historical context. M-Commerce is still relatively new for consumers and their behaviors will change. Today, it’s still fun to see a purchase on their iPhone or Android and to click and know it’s enroute. One interesting advantage (temporarily) of the phone is it’s LACK of convenience. It’s ultra-effortless on a laptop or desktop to click away to another site on a whim. But the keyboard and screen of a mobile device makes it more of a hassle. Hence, the consumer is more open to simply buying.
As tablets replace–or supplement–some of the smartphones and as some of those phones start getting larger screens and keyboards–AND as consumers get over the novelty–we’re going to see mobile behavior more closely mimic today’s desktop behaviors. It’s unlikely to ever fully get there (so Mark’s point is still quite valid), but don’t get too used to today’s numbers. All of those behaviors will moderate over the next year or so. (Then again, I could be wrong, as my wife is quick to remind everyone.)