Continued from Part 1
Many affluent customers are influenced to make impulsive purchases of luxury goods or services by any or all of the factors mentioned in Part 1. Why? Because even though they are rich, they are still human and they sometimes feel insecure, need acceptance, and desire recognition. According to research done by User Interface Engineering (UIE), impulse purchases made by affluent customers account for 40% of all online purchases. In determining what motivated such purchases, UIE made a fascinating discovery. Price was not the explanation. The explanation was found to be the way the website was designed.
UIE defined impulse buying as any spontaneous purchase. In other words, the online shopper bought something they had not intended to buy. Prior to the UIE research, most marketers believed the primary motivation for impulse buying was price. This belief was based on previous surveys done by The Yankee Group and Ernst & Young. Both surveys asked buyers why they made spontaneous purchases. Of those surveyed, 75% stated that a “sale price” had motivated them to buy something they had not planned on buying. Free shipping motivated 49% of online shoppers to make an impulse purchase. The conclusion was obvious: online shoppers made unexpected purchases because of perceived savings. Impulse buying was price-motivated.
UIE disagreed with these results and decided to do their own research. Rather than asking people why they had made impulsive purchases, UIE observed people as they actually shopped online. UIE’s reasoning was that if online shoppers were actually making spontaneous purchases, the behavior should be discernible.
The results? Of affluent online shoppers, 34% made impulsive purchases, and spent 39% of their money on the impulsive purchases. Only 8% of the impulsive purchases could be traced to the price of the items bought. In other words, very few of the affluent shoppers were motivated by price when making impulsive purchases.
What did motivate the purchases? The UIE study indicated the primary motivating factor was awareness. When the affluent shoppers saw an item, they became aware of it. Awareness led to impulsive buying.
UIE questioned the affluent shoppers after the fact and concluded that the shoppers did not know why they had made the impulsive purchases. They just did. This means that most online shoppers buy luxury goods and services for emotional reasons. The reasons are psychological and, on the surface, illogical.
UIE discovered that the impulse purchases were made using links provided on the websites. These websites directed shoppers to products by means of website links rather than by search engines. When shoppers used the website links instead the search engines, they made spontaneous purchases. In fact, 87% of all the impulse buying occurred when shoppers used the links provided by the website.
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