Impulse buying strategies – ethical or immoral? Part 2

In Part 1 of the debate on impulse buying strategies, @_mattmorris argued that preying on a known human cognitive weakness was unethical. Impulse marketing tactics should not be part of a brand’s strategy, when that brand is also looking to become a good corporate citizen. However, Matt also noted that brands need to make money to sustain and grow their position in a marketplace.

Below is my opinion on impulse buying tactics, the role they should play and where line between ethical and immoral exists.

“I was quite surprised by the reaction I received when tweeting the link to advice on impulse buying.  Twitter followers argued that the strategy leads to hyperconsumption and regret, encouraging society to live beyond its means.

I’ve used a number of impulse buying tactics in the past without really considering overconsumption. I’m also a strong believer in building a brand that engages with customers who choose it again and again out of habit. But sometimes (let’s face it) they need a push. Bundle offers, point of sale (POS), off-location placement, discounts, competitions, sampling and managing the flow of footfall through the store all help to maximise sales and generate trial with new or lapsed customers.

What is impulse buying?

Impulse purchasing often occurs when we’re already shopping for something else. The pleasure area in our brain is activated as we anticipate ownership and the gratification we’ll get from our purchase. This allows us to be influenced by exposure to other offers. There’s a great layman’s explanation of this here or you can read another study here that summarises a lot of previous work on the topic.

Emotional stability, agreeableness, conscientiousness, extraversion and openness have all been tested for their influence on purchase. Some people are more susceptible to impulse tactics than others. This can be the result of culture, genetic makeup or even emotional state of mind at a given time. Proximity and the feeling of immediate gratification have also been proven through a number of studies. Indeed, my wife recently attended a charity auction and (caught up in the moment) spent $1500 on a ‘special’ dinner voucher.

Are impulse buying tactics unethical? Are brands and retailers tricking customers into purchasing products they don’t really want or need? Is it unethical for Amazon to recommend books that you might like based on a current purchase? For Ikea to structure your journey through their store so you must pass every section?

A person’s predispositions or craving for a desired feeling are why successful brands exist. A preference for speed, luxury and the colour red appeals to a certain segment of consumers who are fans of Ferrari. Those who have a weakness for chocolate, indulgence and a smooth taste may be heavy consumers of Cadbury products. Is it wrong for brands to play on these desires? I believe it isn’t and therefore neither is it for brands to optimise their impulse buying tactics.

What are impulse buying tactics?

1. Proximity – Out of category space
2. Sales Promotion – Competitions, prize draws, gifts
3. Advertising / POS – Additional presence at point of purchase
4. Bundles – Bundling with other products for added value
5. Discounts – Reduced price for a short period
6. Finance – Buy now, pay later

Where brands encourage consumers to purchase beyond their means, concerns can be raised. Finance tactics including ‘buy now, pay later’, and ‘interest free credit’ are arguably unethical. They’re also tactics used on big ticket items that effectively place customers in immediate debt. The depreciation on these goods can be quick and by the time they’re paid off may be worth half the original price. The facilitators of this debt (including loans and credit card companies) should also be sharing the responsibility here, but that would be another post.

I agree with Matt that removing these impulse buying tactics as part of a core CSR message could be a big point of difference, but It would be a difficult proposition to communicate and one that company shareholders may not agree on in the current economic climate.

Impulse buying matrix

There will always be a grey area surrounding this topic, but the diagram above could be used to evaluate such tactics. Anything below the horizontal axis should be practiced with caution. This won’t be applicable in every case, but the level of ethics can certainly be questioned.

In conclusion, I’m FOR an impulse buying strategy. I think that companies should act responsibly in their use of certain tactics. Smart marketing that capitalises on store layout, shopper behaviour, bundling and sales promotion is a valuable tool in a marketer’s toolkit. Encouraging purchases that place the customer in your debt should be questioned.”

I hope you’ve enjoyed the debate across the past 2 posts. Please let me know what you think and if you agree / disagree.