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Is Impulse Purchasing Really a Useful Concept for Marketing Decisions? DAVID T. KOLLAT and RONALD P. WILLETT Impulse purchasing is an important aspect of customer in-store behavior as discussed in the previous article. The authors of this paper indicate that the concept, as presently employed, has limited usefulness as a basis for marketing decisions. They outline the problems marketers must confront in order to make the unplanned purchasing concept operational for marketing decisions. Journal of Marketing. Vol. 33 (January. 1969). pp. 79-83. I 66TMPULSE" or "unplanned" purchasing is a familiar term to most business executives and marketing academicians.^ Indeed, it is common to refer to certain products as "impulse items" and or to "account for" certain kinds of behavior by classifying it as impulse purchasing. Unplanned purchasing is, of course, not confined to any product or retail setting. The phenomenon has been used to describe purchases of such products as durable goods,- jewelry, wearing apparel, hardware items, furniture,^ drugs and toiletries^ and grocery products.' Moreover, the behavior has been found to occur in such retail settings as drugstores," supermarkets,' department stores, and variety and specialty stores including gift shops, florists, book, barber, hardware, auto supply, lumber and furniture stores.** While the above studies indicate that unplanned purchasing occurs in many types of retail outlets, it is most commonly studied in supermarkets. The importance of this type of behavior in this retail setting is "documented" by the latest du Pont study, which indicates that unplanned purchasing accounts for 50rc of the products purchased in food supermarkets." Several kinds of retailers, particularly supermarket executives and managers, allegedly use unplanned purchasing as a criterion for decisions about merchandise location, space allocation and dif1 As used in this paper, "impulse" and "unplanned" are synonymous. - George Katona and Eva Mueller, "A Study of Purchase Decisions," in Lincoln Clark, editor. The Dynamics of Consumer Reactions (NewYork: New York University Press. 1955), pp. 30-88. 3 Vernon T. Clover, "Relative Importance of Impulse Buying in Retail Stores," JOURNAL OF MARKETING, Vol. 25 (July, 1950), pp. 66-70. * Drugstore Brand Switching and Impulse Buying (New York: Point of Purchase Advertising Institute, 1963). ''Consumer Buying Habits Studies (E. I. du Pont de Nemours and Co., 1945, 1949, 1954, 1959, 1965); C. John West. "Results of Two Years of Study into Impulse Buying." JOURNAL OF MARKETING, V'ol. 15 (January. 1951). pp. 362-363; Hawkins Stern, "The Significance of Impulse Buying Today," JOURNAL OF MARKETING. Vol. 26 (April. 1962), pp. 59-62; and James D. Schaffer, "The Influence of Impulse Buying or In-the-Store Decisions on Consumer Food Purchases" (Journal paper no. 2591 from the Michigan Agricultural Experimental Station). " Same reference as footnote 4, p. 19. Consumer Buying Habits Studies (E. I. du Pont de Nemours and Co., 1965), pp. 3-4. Same reference as footnote 3, p. 67. Same reference as footnote 7. 79 80 ferential promotion treatment of items. Certain store layouts, product locations, shelf locations, and types of displays are apparently thought to be more conducive to and consistent with unplanned purchasing than are others. Unplanned purchasing is also of interest to manufacturers. Packaging and point-of-purchase decisions allegedly are based, in part, on a product's present or potential rate of unplanned purchasing.'" Thus, the importance and relevance of unplanned purchasing is apparently widely recognized and accepted. However, is the concept really a useful basis for the types of marketing decisions that have been mentioned above? This article discusses four basic problems with unplanned purchasing that severely limit its usefulness for marketing decisions. First, the concept is too vague and encompasses too many types of behavior to be an operational criterion for marketing decisions. Second, measured unplanned purchasing rates may be exaggerated because of the methodology used to generate them, and may distort the potential for increasing products' sales by manipulation of in-store location and display. Third, present measures of unplanned purchasing rates are misleading bases for selecting products for differential promotional treatments. Fourth, unplanned purchase rates for individual brands may differ significantly from the parent product category rate, thereby deceiving both retailers and manufacturers. The Problems of Definition Since unplanned purchasing is a widely recognized and frequently talked about type of behavior, it would seem logical to expect some consensus about the meaning of the phenomenon. Actually, this is not the case, for the term is used in many different ways. The following are illustrative of the variety of conceptual definitions: (1) An impulse purchase is an unplanned, spur of the moment decision to purchase a prod(2) An impulse purchase is a logical and efficient way of making purchase decisions, since by waiting until one is in the store to finalize purchase intentions, a more comprehensive and realistic evaluation of purchase alternatives can often be made.i1" Bert C. McCammon, Jr., "The Role of Point-of-Purchase Display in the Manufacturer's Marketing Mix," in Taylor Meloan and Charles Whitlo (editors). Competition in Marketing (Los Angeles: Graduate School of Business, University of Southern California, 1964), p. 78. 11 William R. Davidson and Alton F. Doody, Retailing Management (New York: The Ronald Press Company, 1966), p.180. '2 Saul Nesbitt, "Today's Housewives Plan Menus as They Shop," Nesbitt Associates Release, 1959, p. 2-3. Journal of Marketing, January, 1969 (3) There is no such thing as an impulse purchase. Rather, there are four types of unplanned purchases: (1) Pure impulse is a novelty or escape purchase which breaks a normal buying pattern, (2) Reminder impulse occurs when a shopper sees an item or recalls an advertisement or other information and remembers that the stock at home is low or exhausted, (3) Suggestion impulse purchasing occurs when a shopper sees a product for the first time and visualizes a need for it, and (4) Planned impulse purchasing takes place when the shopper makes specific purchase decisions on the basis of price specials, coupon offers, and the like.'^ Field studies of unplanned purchasing have employed still other operational definitions. The following are illustrative: (4) Shoppers are questioned upon entering the store as to what they plan to purchase and records are made of what they do in fact purchase. Those items purchased but not mentioned during the first interview are impulse purchases.!•• (5) Impulse purchasing is the difference in purchases between a sample of customers reporting actual purchases (exposed to in-store stimuli) and another sample of customers reporting what they anticipated buying while Hawkins Stern, "The Significance of Impulse Buying Today," JOURNAL OF MARKETING. Vol. 26 (April, 1962), p. 59. Same reference as footnote 7, p. 2. • ABOUT THE AUTHORS. David T. KoUort is an Associate Prolessor of Marketing at The Ohio State University. Di. Kollat has published articles in the Journal ot Marketinq Research, the Proceedings of the American Marketing Association, and has been a contributor to the Ejicyclopaedia Britannica. He is coauthor of Consumer Behavior and Cases in Consumer Behavior and is also a coauthor of a forthcoming book Research in Consumer Behavior. Ronald P. Willett is Associate Professor of Marketing and Assistant Chairman. Marketing Department, Indiana University. He holds BS and MBA degrees from Miami University (Oxford) and his DBA is from Indiana University. Dr. Willett is currently Director of the Pharmacists Buying Behavior Study and Co-director of the Family Behavior Research Project at Indiana University. His articles have appeared in the JOURNAL OF MARKETING and the Journal ot Marketing Research. Is Impulse Purchasing Really a Useful Concept for Marketing Decisions? sitting in their living rooms (not exposed to in-store stimuli) .'^ (6) Impulse purchasing is the difference in a store's sales volume during weeks in which a holiday occurred with the week immediately following during which a holiday did not occur.'^^ From the above, it appears that there are considerable differences of opinion as to what is meant by an impulse purchase.'" Conceptual definitions diflfer not only in degrees of precision but, more basically, in terms of the amount and type of decision making that is involved, and, by implication, the susceptibility of the behavior to marketer strategies. Similarly, there is considerable variation in the way in which impulse purchasing is empirically defined. Finally, and perhaps most importantly, there are conspicuous differences between conceptual and empirical definitions. The lack of consensus about the meaning of impulse purchasing would seem to limit the usefulness of the concept. The different definitions used in empirical studies make it difficult to compare findings and accumulate information about the nature of the behavior. Moreover, the marketing implications of impulse buying sometimes vary according to which definition is adopted. For example, if definition (1) is accepted, it may be advantageous to periodically relocate products having high unplanned purchasing rates in order to increase customer exposure. In contrast, if definition (2) is accepted, this strategy may not be desirable particularly if the location(s) is inconsistent with where shoppers typically look for the product (s). Finally, and perhaps most basic, it is questionable whether intelligent piarketing decisions can be made about how to influence unplanned purchasing when there is so little agreement about what the phenomenon is or what it involves. That is, how can profitable strategies be devised when the objective—to influence impulse purchasing—is so poorly defined? Impulse Purehasing—Fact or Artifact? There are differences of opinion about why impulse purchasing occurs. Two conflicting explanations are: (1) the exposure to in-store stimuli hypothesis: and (2) the customer-commitment h>-pothesis. •'•^ James D. Schaffer, "The Influence of Impulse Buying or In-the-Store Decisions on Consumer Food Purchases" (Journal paper no. 2591 from the Michigan Agricultural Experimental Station). '* Same reference as footnote 3. p. 68. '^ For other definitions of impulse purchasing, see How People Shop for Food (Market Research Corporation of America, undated manuscript) ; One On The Aisle (New York: Life Marketing Laboratory, undated manuscript) ; and Impulse Buying (Philadelphia: The Curtis Publishing Company Research Department, February, 1952). 81 The Exposure Hypothesis According to this hypothesis, exposure to in-store stimuli produces unplanned purchases because: (1) shoppers use product assortments and other in-store stimuli to remind them of their shopping needs; that is, shoppers make some purchase decisions in the store rather than relying solely on a shopping list; and/or (2) in-store promotional techniques result in shoppers recognizing new ways of satisfying needs. Several studies have indicated that in-store stimuli can trigger unplanned purchases. For example, it has been demonstrated that the store location of such products as bread, milk and dairy products is instrumental in precipitating unplanned purchases of surrounding products."* Point-of-purchase displays, signs.^'-' and shelf extenders'-" are illustrative of other promotional techniques that have, in some instances, proven effective in stimulating impulse purchases. However, increasing product exposure does not always increase the rate of unplanned purchasing. For example, one study has shown that some products with relatively high impulse purchasing rates (Tang, hominy, powdered coffee cream) are not more responsive to increases in shelf space than the sales of products having relatively low impulse purchasing rates (baking soda).-' Moreover, in some instances, end-aisle displays of relatively high impulse products (pie crust mix and apple pie filling) do not produce greater direct product profits than the endaisle treatment of relatively low impulse products (spaghetti and spaghetti sauce) .-'Thus, contrary to what seems to be the opinion of many marketing academicians and practitioners, exposure to in-store stimuli triggers only some unplanned purchasing, not all of it. The rate of unplanned purchasing appears to depend on the type of stimulation technique, the product that is being 1* Lawrence W. Patterson, In-Store Traffic Flow (New York: Point-of-Purchase Advertising, Institute, Inc., 1963), p. 2. '^ See, for example. ^4 First Study of Totality of Impact of Point-of-Purchase Material on Plus Sales in Supermarkets (New York: Point-of-Purchase Advertising Institute, Inc., 1959), p. 18; Drugstore Brand Siritching and Impulse Buying (New York: Point-of-Purchase Advertising Institute, Inc., 1963), p. 10; Package Store Brand Sw-itching and Impulse Buying (New York: Point-of-Purchase Advertising Institute, 1963), p. 10. -*" Samuel Rouda, What Today's Supermarket Chains Expect from Manufacturers in Promotional Support (New York: Point-of-Purchase Advertising Institute, 1957), p. 64. 21 Keith Cox, " T h e Responsiveness of Food Sales to Shelf Space Changes in Supermarkets," Joumal of Marketing Research, Vol. 1 (May, 1964), pp. 63-67, at p. 64. 22 Robert F . Kelly, " A n Evaluation of Selected Variables of End Display Effectiveness" (unpublished Doctoral Dissertation. H a r v a r d University, 1965), p. 50. 82 promoted, and the customer who selectively exposes himself to, and selectively perceives, the promotional stimuli. If in-store stimuli do not precipitate all unplanned purchasing, then it follows that other factors must be causing some of this type of behavior. The Custonter-commitment Hypothesis The customer-commitment hypothesis maintains unplanned purchasing, or differences between purchase intentions and actual purchases, are attributable, in part, to incomplete measures of purchase plaris. "Measured purchase intentions" are not the same as "actual purchase intentions" because the shopper is iinicilling and/or unable to commit the time and/or cognitive resources necessary to make the two types of purchase intentions equivalent. The customer may be ununlling to itemize her purchase intentions because she does not want to invest the amount of time and thought necessary to give the interviewer a complete roster of her purchase plans. Instead, she articulates only an incomplete itemization of what she plans to purchase, thereby satisfying the requirements of the interview without spending too much time or having to think too much. There are several reasons why the shopper may be unable to itemize her purchase plans. First, the shopper may know what she will purchase but may be unable to articulate these purchase intentions because of the characteristics of the interview. The methodology used in most .studies of unplanned purchasing forces the shopper, in the absence of a shopping list, to rely on memory for purchase intentions. In other words, unaided and nearly spontaneous recall is usually used to measure purchase plans. Thus, the methodology alone guarantees that measured purchase plans will deviate to some degree from actual purchase plans. Second, the shopper may know what she will purchase but may be unable to relate these intentions regardless of the amount of assistance given by the interviewer. That is. without exposure to in-store stimuli, the shopper may be unable to construct cognitively and verbalize for the interviewer what she will purchase. The logic underlying the customer-commitment hypothesis was alluded to nearly two decades ago.-'-^ The hypothesis was also deduced from a recent study of the unplanned purchasing behavior of 600 supermarket shoppers.-'^ Since the hypothesis was a byproduct rather than an objective of the study, it was not pos.sible to determine the amount of un-'3 William Applebaum, "Studying Customer Behavior in Retail Stores," JOURNAL OF MARKETING. Vol. 16 (October, 1951), pp. 172-178, p. 178. ~* See, David T. Kollat and Ronald P. Willett, "Customer Impulse Purchasing Behavior," Journal of Marketing Research, Vol. 4 (February, 1967), pp. 21-31. Journal of Marketing, January, 1969 planned purchasing caused by the phenomena comprising the hypothesis. Implications To the extent that unplanned purchasing is attributable to the customer-commitment hypothesis, unplanned purchasing is not unplanned at all, but rather an artifact of the way in which the behavior is measured. Consequently, true unplanned purchase rates are considerably lower than these that are currently accepted. That is to say, pre-shopping decisions about products and brands to be purchased are more common than past studies have indicated. The evidence presented indicates that presently accepted rates of unplanned purchasing-' may exaggerate the potential for influencing buying decisions. As a consequence, promotional expenditures designed to increase the rate of unplanned purchasing may be excessive. Conclusions concerning the degree of excessiveness must be postponed until the quantitative impact of the customer-commitment hypothesis is determined. Promotional Implications Retailers sometimes use product unplanned purchasing rates to select products for differential promotional treatments. Such decisions as store location, shelf height, number of shelf facings, and endaisle treatment for specific products are often based, in part, on product unplanned purchase rates. Since some unplanned purchasing is not unplanned at all, but an artifact of the way in which the behavior is measured, trve unplanned purchasing rates are considerably lower than those that are currently accepted. It seems risky to assume that all product unplanned purchasing rates are inflated to the same degree; rather, some product rates are probably overstated more than are others. Research to date does not facilitate measuring the extent of distortion of unplanned rates across products but the direction of bias can be suggested. Based on the customer commitment explanation the bias in unplanned rates is likely to be high for items that are discretionary rather than staple, or have low frequencies of purchase or have highly variable interpurchase time periods. These same characteristics are purported to be determinants of unplanned purchase rates. Hence, product categories with high measured unplanned purchase rates are also likely to demonstrate greater measurement error, and conversely, products with low unplanned purchase rates exhibit smaller amounts of error. As a consequence there may be a smaller range between products purported to have high and low unplanned purchase rates, and the use of these rates as a single criterion for assignment of promotional effort may be questionable. Same reference as footnote 7, pp. 3-4. Is Impulse Purchasing Realty a Useful Concept for Marketing Decisions? Thus, although direct empirical evidence is not available, from the evidence presented above it appears legitimate to deduce that existing unplanned purchase rates are likely to be misleading bases for selecting products for promotional efforts. Product Category Rates May Be Misleading Unplanned purchasing rates are typically reported by product category.-* It is often dangerous to assume that a specific brand's unplanned purchasing rate is equal to the product category average. In one instance studied, for example, a food product category had an average unplanned purchase rate of b\^c. Although most of the brands in this category had unplanned rates approximating bl'^'c, the unplanned rate for one major brand was only 26%.27 For reasons already mentioned, the above figures may not represent the true unplanned rates. However, for purposes of discussion, assume that they are correct. If so. then the product category rate may be misleading to both retailers and manufacturers. If retailers fail to recognize that the unplanned rates of individual brands may differ significantly from the product category rate, then, all other things being equal, they are likely to be indifferent as to which brand within a product category is given special promotional treatment. In the above case this may be a mistake, since sales of the brand having the lower unplanned rate may be less responsive to some special promotional efforts. Thus, basing promotion decisions on product category averages rather than the individual brand's unplanned purchase rate may cause retailers to promote the wrong brand. Product category rates may also be misleading to manufacturers. In the above case, for example, the manufacturer of the brand having an unplanned rate of 26<^ may want to know why his brand has such a relatively low rate. Does it mean that he is doing a competitively superior job of creating brand awareness and generating pre-shopping brand choice, but is not getting his share of in-store purchase decisions? Why is he not getting a competitive share of in-store purchase decisions? The point, of course, is that the manufacturer cannot ask these kinds of questions and obtain whatever additional profits the answers might yield if he fails to remember that individual brand rates of unplanned purchasing may differ significantly from product category rates. Toward an Operational Concept of Impulse Purchasing How Unplanned Purchasing Can Become a Useful Concept for Marketing Decisions From the discussion above it is apparent that sev2^ Same reference as footnote 7, pp. 3-4. "David T. Kollat and Ronald P. Willett, "Interbrand Variation in Unplanned Purchasing Rates" (unpublished working paper, April, 1966). 83 eral problems must be overcome before unplanned purchasing can become a useful concept for marketing decisions. First, the concept must be precisely defined. Since the value of the concept hinges in large part on empirical studies of the extent and nature of the behavior, it seems desirable to adopt a definition used in empirical studies, providing that it is capable of yielding managerially relevant insights. Second, a series of methodological studies needs to be conducted in order to devise a measuring instrument and process that will equate measured and actual purchase intentions. Space limitations prohibit a detailed presentation of such studies here. In general, however, it would appear useful to determine experimentally the effects of interviewer cueing and customer incentives on the rate of unplanned purchasing. Experimental manipulation of interviewer cueing would attempt to determine the extent to which inability to itemize purchase intentions artificially "creates" subsequent unplanned purchasing. Various levels and types of incentives could be used to overcome customer unwillingness to articulate purchase intentions. Finally, unplanned purchasing rates need to be computed for individual brands as well as product categories. Overcoming these problems will involve a substantial commitment of time and resources. However, the potential value of true rates of unplanned purchasing may exceed the costs of obtaining them. When true rates are determined, other categories of planning—specifically planned, generally planned, and brand substitution—would probably differ, both in magnitude and in relative occurrence, from those that are currently accepted. These refined measures of various types of in-store decisions would provide more sensitive indices of the amount and type of promotional effort that should be allocated to products. Refined measures of unplanned purchasing would permit a partial functional analysis of the strengths and weaknesses of a firm's promotional program. For example, if unplanned purchasing were defined and measured in such a way as to be equivalent to in-store purchase decisions, a manufacturer could use rates of unplanned purchasing for his brand (si as a criterion for evaluating the effectiveness of both his advertising and in-store promotional strategy. Pure measures of unplanned purchasing and other categories of planning would constitute one of the most potentially meaningful indices of the real effects of specific in-store product promotions. For example, the difference in a product's unplanned purchase rate before and after a special in-store promotion could be used by the retailer as a measure of the effectiveness of that strategy. Other planning categories could also be used in this manner. These measures of effectiveness seem particularly useful since they indicate both the type and extent of behavioral change precipitated by an in-store promotional strategy.