Bricks &Amp; Clicks &Amp; the Buying Impulse: an Investigation of Consumer Impulse Buying Behavior in an Online and a Traditional Retail Environment

ABSTRACT - A revolution is underway in the grocery industry. The Internet has brought new meaning to the term Abrowsing the aisles.@ Impulse purchases are a mere click away. This study examines the impulse buying behavior of 34 consumers who alternately shopped online and at a traditional grocery store once a week for a period of seven weeks. The impact of promotional activities and consumers’ impulsive purchases of new products was also investigated. Overall, the results indicate that consumers shopping for their comestibles online made fewer impulse purchases than when shopping at a traditional store. Implications for online retailers are discussed.

Citation:

Jacqueline J. Kacen (2003) ,"Bricks &Amp; Clicks &Amp; the Buying Impulse: an Investigation of Consumer Impulse Buying Behavior in an Online and a Traditional Retail Environment", in E - European Advances in Consumer Research Volume 6, eds. Darach Turley and Stephen Brown, Provo, UT : Association for Consumer Research, Pages: 271-276.

European Advances in Consumer Research Volume 6, 2003      Pages 271-276

BRICKS & CLICKS & THE BUYING IMPULSE: AN INVESTIGATION OF CONSUMER IMPULSE BUYING BEHAVIOR IN AN ONLINE AND A TRADITIONAL RETAIL ENVIRONMENT

Jacqueline J. Kacen, University of Houston, USA

ABSTRACT -

A revolution is underway in the grocery industry. The Internet has brought new meaning to the term "browsing the aisles." Impulse purchases are a mere click away. This study examines the impulse buying behavior of 34 consumers who alternately shopped online and at a traditional grocery store once a week for a period of seven weeks. The impact of promotional activities and consumers’ impulsive purchases of new products was also investigated. Overall, the results indicate that consumers shopping for their comestibles online made fewer impulse purchases than when shopping at a traditional store. Implications for online retailers are discussed.

INTRODUCTION

A veritable revolution is underway in the grocery industry. Grocers are moving their comestibles online and waiting for their pot of gold that the Internet promises. Headlines in The Wall Street Journal proclaim that "Tesco’s Internet Home-Delivery Unit Discovers Success All Across Britain" (Hall 2002). Marketing Week (2001) announced that "UK Grocery Retailers Lead the Way Online." Datamonitor (2001) forecasts that the US online grocery sector will reach a market value of $26.8 billion by 2005.

Of course, the naysayers are less optimistic about the riches promised by the Internet. These killjoys are dancing on the graves of the Webvans and HomeRuns: "Traditional Grocers Feel Vindicated by Demise of Online Grocer Webvan" (Spurgeon 2001), "HomeRuns.com Is Latest Failure Among Online Grocery Companies," (Wall Street Journal 2001), "What Killed Webvan Was Bricks Not Clicks" (Rufat-Latre 2001). Who is a grocer to believe? Do consumers really "prefer to walk the aisles" as PricewaterhouseCoopers’ (Clarke 2000) insists or will online grocers "succeed eventually" (Juptner 2000) as more consumers twig on to the ease and convenience of shopping for groceries online?

One important issue in the long-term success of online grocery retailing is whether online stores can stimulate the same level of consumer impulse buying behavior as traditional grocery stores. It is not a trivial question. Impulse buying in traditional stores is a major part of retail industry sales. Over 60% of purchases in some grocery categories are the result of impulse buying (POPIA 1995). Others have found impulse buying accounts for almost 80% of purchases in certain product categories (Abrahams 1997; Smith 1996). In a cross-national study (Abratt and Goodey 1990), impulse purchases accounted for 23% of non-food grocery store impulse buying in South Africa compared to 20% in the United Kingdom and 47% in the USA. Purchases of new products, it has been suggested, result more from impulse buying than from prior planning (Sfiligoj 1996). An estimated $4.2 billion in annual store volume is generated by impulse sales of things like candy and magazines (Mogelonsky 1998).

Promotional activities designed to capture consumers’ interest and attention, including packaging design, end-of-aisle displays, shelf placement, in-store product sampling, and other point-of-purchase marketing efforts are a major part of the grocery retailing process. By limiting shoppers to representational contact with their offerings, do online retailers miss out on a "whole world of no-will-power buying" (Brown 1999)? While Internet retailers do offer consumers greater accessibility to products, and a potentially larger selection of items, it is unclear whether these virtual shopping alternatives are able to actuate consumer impulse purchases without the benefit of three-dimensional, multi-sensory promotional activities. Does impulse buying behavior depend on consumers’ ability to "walk the aisles" of a store, interacting with the sights, sounds, and smells of the retail environment? Or, is the buying impulse so ubiquitous that the bountiful array of products available online is enough to stimulate a spontaneous purchase?

Several studies have looked at impulse buying behavior in a traditional retail environment, but to date, none have explored differences in impulse buying behavior when consumers are shopping in an online store. Since many of the studies of impulse buying examine grocery store purchasing behavior, this study compares impulsive consumer buying behavior in an online grocery store with impulse buying behavior in a traditional bricks-and-mortar grocery store in order to provide marketers with a better understanding of the retail environment factors that influence consumer impulse purchasing behavior.

IMPULSE BUYING DEFINED

Impulsive buying behavior is a common phenomenon among consumers. Impulse purchasing behavior occurs "when a consumer experiences a sudden, often powerful and persistent urge to buy something immediately" (Rook 1987, p. 191). It is unexpected and characterized by intense feelings and the need for action, i.e., purchase or possession of the object. It tends to be spontaneous and without reflection. Impulse buying involves no prior intentions to buy the product or fulfill a specific buying task (Beatty and Ferrell 1998). Unplanned "reminder" purchases, e.g., items out-of-stock at home, are not true impulse purchases. For this study, an impulse purchase is defined as one in which the decision to purchase is made spontaneously in the store and there is no previously recognized general need for the item, consistent with what Kollat and Willett (1967) refer to as a "pure impulse purchase" in their typology of impulse purchasing behavior.

PREVIOUS RESEARCH

Most of the studies of consumer impulse buying are linked to in-store buying environments, where shoppers are exposed to a variety of physical stimuli. Rook (1987, p. 193) indicates that the sudden urge to buy something is "likely to be triggered by a visual confrontation with a product or by some promotional stimulus." Phillips and Bradshaw (1993) argue that consumers’ active interaction with the retail environment is an important component in impulse purchase decisions. Visual exposure to products (Dholakia 1999, Hoch and Loewenstein 1991) and in-store browsing (Beatty and Ferrell 1998) stimulate the impulse buying urge among consumers. In-store stimuli such as shelf signage, price, special displays, and other point-of-sale material have been found to have a significant influence on impulse purchasing behavior (Abratt and Goodey 1990, Cobb and Hoyer 1986, Kollat and Willett 1969, McGoldrick 1982, McGoldrick, Betts and Keeling 1999, Prasad 1975).

Given that attention-getting three-dimensional displays in the store environment are effective in prompting impulse purchases, their absence in an online retail environment is likely to decrease impulsive buying behavior. Degeratu, Rangaswamy, and Wu (2000) looked at consumer choice behavior in online and traditional grocery stores and found that sensory attributes (visual cues such as package size) had less influence on consumer choice behavior in an online store compared to a traditional grocery store.

The delay between purchase and possession of the impulse item is another possible impediment to consumers’ impulse buying urges when shopping online. Informants in Rook’s (1987) study of impulse buying described feelings of having to possess or purchase something instantly. Similarly, Bayley and Nancarrow’s (1998) informants described feeling a sense of buying urgency to make the impulse purchase. The authors state that, "in the case of mail-order, catalogue purchasing and 'shopping channels,’ the merely representational contact with the product and the time lapse between buying and receiving does threaten to disrupt the usual process of the impulse purchase." (Bayley and Nancorrow 1998, p. 107). The absence of three-dimensional, multi-sensory stimuli in an online retailing environment and the lapse in time between purchase and possession is hypothesized to negatively impact consumer impulsive buying behavior, reducing the total number of impulse purchases made from an online grocer compared to a traditional grocer.

H1: When buying groceries, consumers will make fewer impulse purchases from an online grocery store than from a traditional grocery store.

While online retailers are limited in the amount and forms of sensory stimuli they are able to present o consumers, these retailers can, and do, use sales promotions and other marketing promotions (e.g., coupons, rebates) similar to traditional retailers. In a study of consumer supermarket purchase decisions, Burke and his colleagues (1992) found that study participants were more sensitive to in-store price promotions in a computer-simulated store than they were in an actual grocery store, selecting more items on sale in the computer-simulated store. However, Degeratu et al.’s (2000) comparison of the choices of online shoppers and shoppers at a traditional grocery store found that the combined effects of price and promotion were stronger in traditional stores than in an online store. Donthu and Garcia’s (1999) study of Internet shoppers and Raijas and Tuunainen’s (2001) study of online grocery shoppers in Finland also found less price sensitivity among online shoppers compared to non-Internet shoppers.

While online shoppers appear to be less price sensitive than traditional store shoppers, which may result in fewer purchases of sale items, these findings may be due to income differences in the sample of consumers used in the studies. In the Degeratu et al. (2000), Donthu and Garcia (1999), and Raijas and Tuunainen (2001) studies, the comparison of online and "off-line" buyer behavior is based on separate, independent samples of consumers rather than matched samples. In each of these studies, the online shoppers had higher incomes than traditional store shoppers.

In the impulse buying literature, the effect of price is somewhat mixed. A study by McGoldrick (1982) of pharmacy customers in a traditional store found that price did have an influence on consumers’ impulsive buying behavior, but price factors were not "the main reason" for the purchases (p. 30); rather, in-store advertisements and displays seemed to have the greatest relative importance. Similarly, Abratt and Goodey (1990) found that the most important influence on consumer grocery impulse purchases were shelf displays, price, and special displays respectively. In another study, impulse buyers were not particularly price sensitive nor did they shop for deals in their local grocery store (Cobb and Hoyer 1986). Narasimhan, Neslin, and Sen (1996) found a positive, but non-statistically significant relationship between featured promotional price cuts and impulse buying among grocery store shoppers. Overall, the results of impulse studies indicate that impulse buyers respond more to visual displays and other attention-getting stimuli in a traditional retail environment than to special prices.

Although the findings from the impulse buying literature indicate that price is not a major factor influencing impulse purchase decisions in traditional retail stores, it is likely that an online retail environment where in-store displays and other three-dimensional stimuli are limited may prompt more particular focus on price promotions. In this multi-sensory stimuli-poor environment, price promotions will be more prominent and therefore more likely to prompt consumers’ impulse buying behavior (e.g., Reibstein [2002] found that online shoppers cited price as the most important factor in attracting them to an online store). Consistent with the Burke et al. (1992) study where participants were more sensitive to in-store price promotions in a computer-simulated store than they were in an actual grocery store, it is hypothesized that consumers will make more impulse purchases of sale items from an online grocery store compared to a traditional grocery store.

H2: When items are on sale, consumers will make more impulse purchases of sale items from an online grocery store than from a traditional grocery store.

Research suggests that online buyers may be more innovative and risk-taking (Bellman et al. 1999, Donthu and Garcia 1999, Kwak, Fox and Zinkhan 2002) compared to the general population of non-Internet buyers. But does shopping in an online grocery store encourage impulsive product trial as much as shopping in a traditional grocery store where n-store advertising and product displays, as well as in-store sampling and other promotional activities are used to encourage consumers to try, and buy, grocery products they otherwise might not consider (see Abratt and Goodey 1990, Cobb and Hoyer 1986, Kollat and Willett 1969, McGoldrick 1982, McGoldrick, Betts and Keeling 1999, Prasad 1975)?

In the Burke et al. study (1995) of consumer choice decisions in virtual and traditional store environments, the authors argued that consumers would be less likely to experience the desire for novelty or variety in the simulated store environment. As expected, their study participants engaged in more routinized behavior in the computer-simulated store, including fewer brands in their choice set, and switching brands less frequently, compared to their behavior in a traditional grocery store. Similarly, in a study of grocery shoppers in Finland (Raijas and Tuunainen 2001) online grocery shoppers (those who used an online grocery store at least once a month) were less likely to try something new than non-users (those who experimented with online grocery shopping but were not regular users of the service). Overall, the research suggests that an online retail environment discourages shoppers from trying new products.

The impulse literature is silent on the issue of new product trial and consumer impulse buying behavior. Certainly, impulse purchases of never-before-tried products occur. However, to date, none of the impulse studies have focused on reporting first-time trial impulse purchases. Consistent with the findings from the online grocery buying studies by Burke et al. (1992) and Raijas and Tuunainen (2001), it is hypothesized that consumers will make fewer first-time trial impulse purchases when shopping in an online grocery store compared to when they are shopping in a traditional grocery store.

H3: When buying groceries, consumers will make fewer first-time trial impulse purchases from an online grocery store than from a traditional grocery store.

In sum, it is expected that the online retail environment will reduce the amount of consumer impulse buying that occurs, and will curtail impulse purchases of never-before-tried products compared to a traditional grocery store. However, due to the more limited amount of visual stimuli that is present in the online store, consumers are expected to make more impulse purchases of sale items from the online retailer compared to the traditional grocery store.

TABLE 1

CHARACTERISTICS OF THE STUDY PARTICIPANTS

METHOD

In Spring 2001, 35 MBA students from a large Midwestern University in the United States were recruited as part of a class project to purchase their groceries from a traditional grocery store and an online grocer on alternating weeks for a period of seven weeks. Each week, students turned in a grocery report that included information about their shopping tripBwhere they had purchased their groceries, the time spent traveling to the store (or the website), the time spent selecting items and paying for the groceries, and the total amount of money spent. In addition, panel participants indicated for each item purchased whether it was a planned, unplanned reminder, impulse item, sale item, first-time trial, and whether a coupon was used. Students were required to attach a grocery receipt to their reports (as an independent check on their reported information), and they were asked to indicate whether there were any items they wanted to purchase but did not. They were free to include any additional comments about their shopping experience. Before beginning the project, students filled out a questionnaire that contained items about their grocery buying habits, as well as demographic questions.

A total of 34 students completed the project. Reports for six weekly grocery shopping trips (three online and three in traditional stores) were obtained. [A "trial" online shopping report, containing the data from students= first-time use of the online grocery website, was also completed by all students to ensure a baseline familiarity with the online grocery website. The data from that trial are not included in the results here.] Half (50%) of the participants were male, 50% were female. The average age of participants was 29 years old (range: 23 to 50 years). The majority (80%) were single and had incomes less than $50,000 (73%). Table 1 summarizes the background characteristics of the study participants.

RESULTS

Impulsive Buying Behavior

Participants purchased three times as many items on impulse from their local grocery store compared to the online grocery store. Overall, 75% of the total number of impulse purchases in this study were made in a traditional retail store (see Table 2). Across the six buying occasions, on average, significantly fewer impulse items were purchased on online (M=2.4) compared to the number of impulse items purchased from traditional grocery stores (M=6.5; t(33)=4.90, p<.001). Hypothesis 1 is supported.

Consistent with Degeratu et al. (2000), the lack of multi-sensory attributes available in an online grocery store appears to have reduced participants’ impulsive buying behavior in this study. Given that a significant number of consumers’ purchases from a traditional grocery store are impulsive (POPAI 1995), this reduction in the amount of impulse buying in an online environment has serious negative implications for overall sales and long-term profits for online retailers.

Sales Promotions

One hundred and eighteen impulse purchases were made of items that were on sale or at a special promotional price, representing 37% of the total number of impulse purchases made. Participants were more likely to make an impulse purchase of a sale item when shopping online compared to shopping at a traditional grocery store (c2 (1)=13.80, n=318, p<.001), supporting hypothesis 2 (see Table 3). On average, participants made more purchases of impulse items on sale when shopping online (M=0.54) compared to shopping at a traditional grocery store (M=0.31; t(316)=-3.78, p<.001), supporting hypothesis 2 (see Table 3).

Consistent with the Burke et al. (1992) study, consumers appeared to be more attracted by promotional prices when shopping in an online grocery store compared to shopping in a traditional grocery store. Given that consumers made fewer impulse purchases overall when shopping online, the fact that they are more responsive to online price promotions points to one method by which retailers can encourage more impulse buying among online shoppers.

TABLE 2

ONLINE AND LOCAL STORE IMPULSE PURCHASES BY PRODUCT CATEGORY

TABLE 3

IMPULSE ITEMS PURCHASED ON SALE

Consumer Product Trial

Consumers’ impulse purchases of products that represented a first-time trial of the item was hypothesized to be reduced in an online retailing environment compared to a traditional grocery store. Across all shopping occasions, 11% (n=36) of the products participants purchased on impulse were items the impulse buyer was trying for the first time. However, there was no significant difference in the likelihood of an impulsive purchase of a new product whether participants were shopping online or at a traditional store (c2 (1)=1.32, n=318, p=ns). Hypothesis 3 is not supported (see Table 4). On average, there was no statistically significant difference in the number of impulse purchases of first-time trial products when buyers shopped online (M=0.15) compared to when they shopped at a traditional grocery store (M=0.10; t(316)=-1.14, p=ns).

While the majority (89%) of participants’ impulse purchases were familiar repeat-purchase products, a slightly higher proportion of shoppers’ impulsive new product-trial purchases were from the online store compared to a traditional store, suggesting that online stores are able to encourage consumers to try new products despite their more limited visual and promotional capabilities. Apparently, the lack f multi-sensory attributes available online did not significantly reduce participants’ willingness to try a new product compared to when they were shopping at a traditional grocery store. Of course, online retailers may be able to promote awareness and trial of new products by featuring them more prominently on the website, and by offering sales incentives (coupons and sale prices). One-third (4 out of 12) of the online first-time trial impulse purchases involved a coupon whereas only 4% (1 out of 24) of the traditional store first-time trial impulse purchases involved a coupon. Future research should investigate the ability of website promotions to encourage consumers to try new products.

TABLE 4

FIRST-TIME TRIAL IMPULSE ITEMS PURCHASED

DISCUSSION

In this study, the impulse purchasing behavior of consumers was different when they shopped for groceries from an online grocer compared to their shopping behavior at their local grocery store. Participants significantly reduced their impulse buying when shopping online, a finding that suggests impulse buying is critically linked, in some way, to the multi-sensory stimuli available in traditional retail environments, consistent with the prior studies of impulse buying (e.g., Bayley and Nancorrow 1998, Dholakia 1999, Phillips and Bradshaw 1993, Rook 1987). Impulse buying behavior appears to require a greater degree of sensory stimulation than is available from an online shopping environment. Given these results, online retailers are indeed missing out on the "whole world of no-will-power buying" (Brown 1999).

However, a recent study by Reed et al. (2002) that looked at the way consumers react to cues presented to them in a virtual supermarket suggests that stimuli in an online retail environment can acquire properties similar to those in a traditional retail environment, and that consumers can be "conditioned" to respond to online stimuli in the same way consumers respond to in-store displays and other promotional activities. In this study, consumers were stimulated by online promotions to impulsively purchase items on sale more often than when they were shopping in their traditional grocery store. It may be that in a stimuli-poor environment, the few promotional stimuli that are used are more effective at prompting an impulse purchase than in a sensory-cluttered traditional store environment. Clearly, consumers do respond positively to online marketing activities. Future studies should investigate the particular effectiveness of various promotions (coupons, rebates, sale prices, bonus sizes, buy-one-get-one-free) at encouraging impulse buying behavior. Based on the Reed et al. (2002) study, in the near future, Internet retailers could have impulse buyers "clicking out of their hand."

Future research also should investigate impulse buying behavior in different types of online retail environments. For example, does impulse buying of clothing items occur to the same extent from online clothiers that it does in traditional stores? Are only certain categories of products susceptible to impulse buying urges online?

What about consumers’ psychographic characteristics (e.g., sensation seeking, trait impulsiveness)? Do these consumer traits moderate online impulsive buying behavior to the same extent that they moderate impulsive buying behavior in traditional retail environments? Future studies might want to incorporate consumer characteristics in the study of online impulsive buying behavior.

In sum, the results of this study suggest that the grocery industry remains viable for the local bricks-and-mortar grocery store. Beatty and Ferrell (1998) found that browsing in a traditional store environment had a positive influence on consumer impulse buying. The ability to "just look around" must contribute to impulse buying behavior. As long as impulse purchases are prompted by the physical presence of an item, and the multi-sensory stimuli provided by a traditional store is not matched by an online store, the local grocer will continue to thrive.

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