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.
The most startling discovery made by UIE was this: online affluent shoppers were three times more prone to continue shopping and do more impulse buying when they used the links than when they shopped using the search engine. They not only continued shopping, but they also purchased three times as many items. Why?
For one, when shoppers used the links they were made aware of more available luxury products. For example, if an affluent female shopper used the search engine to find Chanel No. 5 perfume, the search engine took them to the page for only Chanel No. 5. The shopper was not aware of the other available products. Whereas if the shopper used the links, she was made aware of many other brands of perfume. Second, using the links caused shoppers to travel through three times as many stages as required when using the search engine. This meant exposure to other, unrelated products.
Affluent customers cannot buy luxury products if they are not aware of them. The links on the websites provided awareness. This explains why shoppers in traditional stores often buy items spontaneously. As they walk through the store, they become aware of what is available. It also provides an explanation for the upsurge in sales of Mexican blankets at Wilco Gas Stations (see Part 1). When shoppers went in to buy Twinkies and coffee, which they often did, the new location of the blankets made shoppers aware of their existence. So they bought them. In effect, Wilco Gas provided links to their shoppers. The links made shoppers aware of an available item of which they were previously unaware.
UIE’s study provides valuable marketing information for sellers of luxury items. Product awareness motivates impulse buying. Awareness means product placement must be carefully chosen, not only in traditional stores, but also on websites. The design of a business website is of paramount importance.
Shoppers must be encouraged to use links rather than search engines. Which means the links must be user-friendly and self-explanatory, and provide ample description of luxury products. If the links are perplexing or the content vague, shoppers will abandon them.
UIE provides guidelines for website design:
- Does the website design invite shoppers to locate products via the links or does the design prod them back to the search engine?
- When shoppers use the search engine, do they continue shopping or do they stop? This information can be tracked and appropriate alteration in the website’s design made.
- Would the addition of user-friendly links increase luxury sales on the website?
- Is the website designed to track the use of links versus search engines?
One method of using the website to market luxury goods more effectively is to examine the search logs on the website. The search logs reveal the common search-words that online shoppers use. These words can be established as links, making the links more attractive and easier to use. This simple change will motivate impulse buying.
Amazon.com is the perfect example of deft utilization of links. Not only does Amazon provide convenient links, which expose customers to other products, but the search engine and the links are interrelated, so the customers are continually steered back to the links. Additionally, Amazon customizes each shopper’s start page with items they might like based on past shopping and viewing occasions.
Establishing links in a traditional luxury store involves the placement of products so shoppers are exposed to as many products as possible. For example, a luxury jewelry store would locate engagement rings throughout the store, instead of one specific area. In this manner, betrothed couples will become aware of other offerings, such as watches, bracelets, and necklaces. Studies show that a couple shopping together buys 60% more luxury items than the man alone, 30% more than the woman alone.
Luxury stores should also appeal to impulse buying with color patterns, size and shape of displays, and comprehensible product descriptions. Even the ambient temperature of the store is vital. The more luxurious and exclusive the store, the cooler the temperature should be kept. For this implies chic in a physical manner, which, in turn, energizes emotional appeal. Another tip: the most expensive items should be placed on the last six feet of the display islands. This is where they are most visible, and where shoppers are more prone to pause and look.
Once the psychology of impulsive buying is examined and understood, marketing to affluent customers effectively may be implemented.
Implementation may take time and effort, because proper design of a lively website can require experimentation and adjustment. Why? Because customers are people, which means there are no hard and fast website design rules. One website design may be as effective as another design in stimulating impulse buying, even though the two websites are totally dissimilar.