How can convenience retailers get customers to zero in on impulse purchases at the checkout, on a shelf or anywhere else in the store? One way is to know the psychology of impulse.
“We aren’t rational beings … especially with money,” said Brad Klontz, associate professor of economics and finance at Creighton University, Omaha, Neb., in a study recently conducted by Princeton Survey Research Associates International, Princeton, N.J., for CreditCards.com. Researchers asked 1,003 U.S. adults about their impulse purchases.
The trick for retailers is triggering an emotional response. “[Retailers] don’t put Scientific American at the checkout for a reason,” Klontz said. “They place magazines like the National Enquirer and candy. Those things are more likely to make you feel emotions, like jealousy, curiosity and desire.”
Here are five ways to improve impulse buying in our stores ...
1. Know your customers' motivation
Impulse buys are most often made to fulfill a selfish desire, with 47% of respondents making impulse purchases for themselves, the report says. It’s especially true for 18- to 29-year-olds, with 61% saying they made most impulse purchases for themselves.
Younger people are more apt to make an impulse purchase, with 20% of people 65 or older saying they’ve never made an impulse purchase vs. only 8% of people younger than 50. Thirty percent of respondents who make less than $30,000 a year said they have not made any impulse purchases in the past three months.
2. Bundle health and indulgence
In January 2015, West Des Moines, Iowa-based Kum & Go began enticing customers to purchase both better-for-you and traditional items when the chain of about 440 stores launched a “two-for” candy and snack promotion.
Customers could pick two healthy snacks, two indulgent treats or a mix of both. The program was a success, enough so that “we have made enhancements to the program based on the results of the original effort,” says Stephanie Poitry, category manager for Kum & Go.
The campaign works like this: If customers buy a traditional candy item, they can select a better-for-you or salty item in a “mix and match” setup. The chain found that customers who went with bars stuck to either healthy or indulgent. Buyers of salty snacks tended to grab one of each.
It works because consumers want to “have it both ways: an [indulgent] treat at one occasion and healthy one the next,” says Sally Lyons Wyatt, executive vice president and practice leader, client insights, for IRI, Chicago.
The program also allowed the chain to do something it otherwise wouldn’t: stock healthy items in the checkout space.
3. Size up the chocolate opportunity
Which chocolate size has more impulsive upside? It depends on a retailer’s customer base.
Huck’s Convenience Stores, Carmi, Ill., sees many candy and snack trends occurring at once, and one involves increasing the footprint for chocolate king-size packages, thanks to input from Hershey’s category-management team. While king-size chocolate bars resonate best in supermarkets, drug stores and mass merchandisers, Randy Adams, center store category manager for the 116-store Huck’s chain, saw equal opportunity for c-stores.
A few years ago, the chain removed a 12-foot section of gum and mints and gave the space to king-size chocolate brands. While smaller sizes play better into immediate consumption, customers took an approach that while they’re paying more for king, they are also receiving more chocolate.
Other retailers have their own ideas about merchandising king-size candy. Single-store retailer Josh Lund, owner of Beaudry Express, Elk River, Minn., pairs king candy brands in a vertical configuration and all standard sizes in a similar vertical row.
4. Rethink impulse at the coffee bar
Sweet baked goods paired with coffee is often a no-lose proposition for operators, but Lund of Beaudry Express tried it—and saw it flounder.
When sweet packaged snacks were aligned with coffee, customers “got preoccupied and actually missed seeing them. Plus, it gets crowded with other patrons jockeying for position while filling up their coffee,” he says.
Lund had a hunch that sweet snacks might entice the coffee customer if they were placed at the register.
“It defies logic to move these items away from coffee, but the pattern we identified was that people grabbed their coffee fırst and didn’t think about reaching for, say, a Hostess pastry. In our store, it’s coffee first, breakfast snack second,” says Lund.
The checkout, however, proved to be the perfect spot. “If customers have even a minute of downtime waiting in line, this provides that crucial window to think about adding the pastry with the coffee,” he says. “The display rack is elevated and puts snacks more at eye level, so they can’t really miss it.”
5. Give dairy proper placement
Consumers continue to seek healthy and inspired snacks from the dairy case. And retailers are capitalizing on this with snacks such as cheeses and yogurt.
“Cross-merchandising is most-effective if it fulfills a consumer need, such as ... a healthy-snack center,” said Cindy Sorensen, vice president of business development for the Midwest Dairy Association, in the International Dairy Deli Bakery Association’s What’s In Store report.
One solution: Create hot spots for breakfast, lunch and dinner ideas, with dairy items to help offer a complete meal or snack.
Randy Morton, owner of Morton’s, a single-store operator in Hallettsville, Texas, believed pairing drinkable yogurt inside the dairy cooler along with single-serve fluid milk had significant potential, but it failed to live up to sales expectations.
However, he says, “We moved it to a refrigerated grab-and-go display paired with fresh varieties of cheesecake, fresh fruits, celery sticks, tomatoes, fruit cups and smoothies. It’s more of a natural fit there because it communicates the idea of ‘fresh,’ which spoke louder than communicating the idea of dairy.”