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Analysis

Impulse buying can help an online brand grow, if it’s done correctly

By Chris Carter, CEO at digital commerce agency SMP

Impulse buying isn’t just a tactic used by bricks & mortar retailers, where shoppers are tempted with inexpensive treats as their defences are down as they make the final approach to the till. In fact, research from Kantar has found that more than 31% of us are now spontaneously splurging online too.

While the pandemic has left some consumers tightening their belts, there’s clearly a case to be made that there are plenty more able to continue treating themselves. In fact, the same Kantar study reveals that 67% agree they sometimes treat themselves to something they don’t need – and without hesitation.

This extends to the online space. But if e-commerce brands and retailers want to ride the wave of post-pandemic impulse spending, they need to approach impulse offers through the lens of an e-commerce shop instead of replicating bricks and mortar tactics.

Impulse selling as a loyalty lever

Products purchased on impulse in-store typically bear little relation to what else is in our baskets. The store layout is highly considered – and this also applies to the impulse racks leading to the tills. However, the items that stock those shelves are often low value and purely aimed at driving basket spend. In many instances, they’re ‘immediate gratification treats’.

The same does not have to apply to online shopping. Using the plethora of data available to understand how online consumers shop a category – past orders, frequently purchased, abandoned shopping carts, etc. – allows for highly targeted, relevant add-on items that can be pushed at checkout or earlier in the funnel to increase basket value.

Suggestions that add something useful can deliver real value – particularly if there’s social proof such as informing customers of what others frequently buy, which builds loyalty and influences purchase behaviours.

One such case is Moonpig. The brand offers a selection of gifts before the customer reaches the checkout. These are closely aligned to the age, gender and occasion for the card’s recipient, and are often personalised based on the main purchase. Due to the often last minute nature of gifting purchases, these recommendations can also include products at higher price points than the basket average, as shoppers are willing to pay for a complete gifting solution there and then.

The unique attributes of the e-commerce environment mean there’s a clear opportunity for online retailers to use impulse purchasing to significantly increase the final value of the basket. But it must be highly considered and relevant if it’s to avoid getting in the way of closing the sale.

Impulse as a trojan horse

One only needs to look at the success of Amazon Prime to see the value in ‘free’ shipping. With many retailers already identifying average order values and setting thresholds to qualify for free shipping, impulse offers at the checkout can soon bump up basket value to unlock this. It’s a win-win for shoppers and retailers.

Similarly, low-stock alerts, limited-time offers and flash sales trigger our fear of missing out. In fact, calls to action built around urgency can often push a conversion over the line – even at a higher price point.

Back to the future

Home shopping channels have traded on impulse since the 1980s and the same psychology is now being brought online through shoppable live streams. These no longer have to be housed purely on social platforms and various retailers and marketplaces are now trialling them on their own websites, like the luxury fashion retailer Ted Baker. Others are also shifting to store associates rather than influencers as brand advocates.

The bigger marketplaces like Amazon also have built-in strategies that increase the chance of an impulse buy. Its sponsored display ads, showcasing products on a competitor’s landing pages, increase the likelihood of a customer being quickly swayed by an alternative – particularly if it’s cheaper.

This all goes to show that while impulse selling may have its origins offline, its true home is in e-commerce. Of course, there is a balancing act as online retailers have to be careful not to overplay their hand and disrupt the user experience.

Online impulse selling should ultimately be about delivering a better, more tailored experience to customers. This should be one that both parties benefit from: the seller increases basket value, while the buyer comes away with something that genuinely extends, enhances or complements their purchase.

If retailers crack this, consumers’ attitudes towards impulse buying will shift. These items will no longer be guilty purchases at the checkout, but products that add genuine value that the retailer can introduce at multiple points during the purchase journey.


Chris Carter is CEO at digital commerce agency SMP

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