Impact of Store Size on Impulse Purchase
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Transcript of Impact of Store Size on Impulse Purchase
Impact of Store Size on
Impulse purchase
1
Introduction
Unplanned purchases are defined as purchase made in a store that are
different from the consumer planned to made prior to entering the store.
Marketers and retailers tend to exploit these impulses which are tied to the
basic want for instant gratification. For example, a shopper in a supermarket
might not specifically be shopping for confectionary. However, candy, gum,
mints and chocolate are prominently displayed at the checkout aisles to
trigger impulse buyers to buy what they might not have otherwise
considered
Abratt and Goodey(1990) define impulse buying as a purchase
decision made in-store with no explicit recognition of a need for such a
purchase prior to entry into the store. Organized retail stores are designed in
a manner so as to appeal to the senses of the consumers into making Impulse
purchases. Even the mom- and-pop shops are being designed with soft music
and serene environment which appeal to customers’ emotions. The increasing
disposable income of the consumers is also adding to the increase in Impulse
purchases by the customers. New technologies, such as teleshopping channels
and Internet, act as catalysts of consumer’s impulse buying behavior as they
increase both the accessibility to products and services, and the ease with
which impulse purchases can be made(Kacen and Lee,2002)
Impulse buying disrupts the normal decision making models in
consumers' brains. The logical sequence of the consumers' actions is replaced
with an irrational moment of self gratification. Impulse items appeal to the
emotional side of consumers as ageing a logical sequence of consumers’
action. Some of the items bought on impulse are not considered functional or
necessary to the consumers. Unplanned purchase implies a lack of rationality
or alternative evaluation. Unplanned purchase can be further subdivided into
two categories. i. Reminder Purchases-would occur when a consumer notices
Band-Aids in a store & remember that she is a almost out at home .ii) Impulse
Purchase would occur when a consumer sees a candy bar in the store &
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purchases it with little or no deliberation as the result of a sudden, powerful
urge to have it.
The stimuli is the basic structure to which an individual
responds. The product, package advertisement, or sales presentation have a
major impact on the nature of the mental processes that are activated and an
the final meaning assigned to the message.
Various in-store stimuli attract the mind of a customer to fulfill his
various needs and fancies (Kollat and Willett,1967). For example, marketers
and retailers prominently display candies, chocolates, battery cells and other
small ticket items to motivate the customers to purchase the goods, that they
would not have otherwise purchased. Customers also purchase products
which stimulate their interests.
In-store stimuli, such as product display, product price ,large
variety, store ambience, etc. ,from the core reasons that influence consumers
to purchase on impulse. In-store stimuli are possible only for big and medium
–sized organized retail stores. Small-sized retail stores, are less capable of
attracting Impulse purchase. A prominent reason is that customers can
choose the products themselves in a big store. Also, the big stores are quite
spacious and well-fit to attract purchase from a customer. This is particularly
true in India where small-sized stores are not designed in a supermarket like
manner and the store keeper fulfills the customer’s order rather than
allowing him to go inside and pick the goods for himself.
However, a problem with the big-sized retail stores is that owing to
the heavy investment in the store ,the turnover of the store (and it partially
refers to impulse sales) must also be sufficiently high to justify the
investment. In other words, as the store size increases ,it becomes necessary
that the Impulse purchase also increase correspondingly to the turnover of
the store.
In the context of our research, the ratio of Impulse purchase to the
total spending should also be competitive as compared to a medium or a small
sized store. Therefore, we make an attempt to study the influence of the store
size on Impulse purchase. While there have been many studies (e.g., Kollat and
willet.1967) on the influence of in-store stimuli on impulse buying, these
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studies do not consider how customer Impulse purchase would differ across
various store sizes. The study also contributes by identifying various insightful
strategies for an organized retailer to attract more Impulse purchases.
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Objective
1) To Know the size of the store has a positive influcence on the amount of
impulse purchases made by the cutomers.
2) To Know the type of stimuli has a positive influence on customer’s
impulse purchase made from stores of different size.
3) To Know the type of items has a positive influence on customer’s impulse
purchase made from stores of different sizes.
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Research Methodology
Data Collection:
In this study, survey method was used to collect data. The
Questionnaire was developed in a simple manner which asked the
respondents the size of their planned and unplanned purchases as well as the
categories of items that they purchased in an unplanned manner. The money
spent on planned and unplanned purchases was used as a measure of size of
the planned and unplanned purchases. The data was collected using simple
random sampling from various small-medium and big sized fifteen retailers
in Islampur. Every third customer to the size was sampled. The store size was
coded as small, medium and big according to the size of the store. all the
small size (such as kirana stores) coded as ‘1’ The medium sized
supermarkets and bazaars were coded as ‘2’ and the big-sized stores were
coded as ‘3’.
Rationale of the study
It is seen that shopping mall owners tried to exploit impulses,
which a associated with the basic need for instant satisfaction. A buyer in the
shopping store might not specially be shopping for the confectionery items
displayed at prominent places will certainly attract buyers attention and
trigger impulse buying behavior in them. this phenomenon can easily be
understood with the help of two principle/factors as a part of psychological
review of literature, which interprets impulses as the consequences of these
competing principles/factors
These principle are well presented in the papers of Fread (1956) & Mai ,et al
(2002) These principle are stated below.
i) First, the Pleasure Principle
ii) Second, the reality principle
The Pleasure principle to immediate satisfaction felt by consumer
whereas the reality principle is related to delayed gratification. There is always
an ongoing competition between these two forces represented as principle
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within the buyer when they enter in store with the intention to buy. As a
consequence impulse related behavior overcomes them because impulses are
usually difficult to resist and involve premeditated pleasurable experiences as
of a study of Rook(1987)
Role of in-store stimuli in Impulse Buying
In-store stimuli are promotional techniques employed to
increase unplanned (or subconsciously planned) purchases. These
techniques include in-store sitting, on-shelf positions, price-off promotions,
sampling, point-of-purchase displays, coupons, and in-store demonstrations.
Retailers try to increase the number of impulse purchase through store
design, product displays, package design and sales (Hoyer and
machnis,1997).
Studies (Cox,1970; Curhan, 1974; Wilkinson et al., 1982; and
Limentour et al.,1984)report a positive relationship between the total unit
sales of an impulse product brand having high consumer acceptance and the
amount of shelf space given for that brand. However, no relationship has
been reported between total unit sales of an impulse product brand having
low consumer acceptance and the amount of shelf space given for that brand.
On-shelf position also influences unit sales of supermarket
products (Sewell,1984; and Abratt and Goodey,1990).This is because the
consumers have a natural tendency to focus and perceive at eye level.
Displays can therefore, increase the rate of unplanned purchase in retail
stores (Peak and Peak,1977; and Auelch,1983).Many studies have been
conducted in an attempt to quantify the sale responsiveness of displays. All
the found that the displays increased the sales of the items exhibited .
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Literature Review
Research findings suggest that emotions and feelings play a
decisive role in purchasing, triggered by seeing the product or upon exposure to
a well crafted promotional message. Such purchases ranges from small
(chocolate, clothing, magazines) to substantially large (jewelry, vehicle, work of
art) Impulse Buying as a purchase decision is discussed In detail by Kollet and
Willett,1967: Bellenger et al.,1978; and Abratt and Goodey (1990).
Rook and Gardner (1993) identify two important characteristics
of Impulse Buying, namely: rapid decision-making and a subjective bias in favor
of immediate because it is made while shopping, although the individual was not
actively looking for that item, had no pre-shopping task, such as looking for a gift
which satisfies the customer.
Kollet and Willet study is important as it attempts to explain
customer difference in unplanned purchasing behavior. However theses
studies are concentrated on supermarkets and big-sized organized retail
stores. In-store stimuli cab also occur in a relatively small-or medium-sized
store. Particularly these days even small stores lay emphasis on attractive
and elegant store designs. Therefore, in this research we study how the
impulse purchase behavior differs across various store size. Owing to the
high turnover in a big organized retail store, the impulse purchase must also
be proportionately high.
Kollat and willet (1967) General study of Impulse purchase
behavior In store of a national supermarket chain look into the influence of
external stimuli .Average customer purchase 50.5% of the products on an
unplanned basis;\the incidence of unplanned purchase varies greatly for
customers.
Popai/Du Pont (1977) Study of consumer buying habits look into
the influence of external stimuli.65% of all supermarket purchase decisions
were made in-store with over 50%of these being unplanned; Rate of
unplanned purchase differ for different product categories; Reasons for
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unplanned purchase-38%(Retail forces),29% (Manufacturer forces),24%
(world of mouth force),9% (other).
Bellenger et al.(1978) Infuse of demographic factors on Impulse
Buying behavior and finding are Shoppers under 35 years of age were more
prone to impulse buying compared to those over 35 years old.
Johnson and williams (1984) General study on consumer Impulse
buying behavior study also highlights major differences between impulse
purchases for various product categories. 20% of purchasing decisions were
made inside the store; there were important differences between the product
categories.
Abratt and Goodey(1990) Influence of in-store stimuli and culture
on consumer impulse purchase behavior confirm the role of in-store stimuli
do affect unplanned purchase quite significantly; 70% of unplanned purchase
are due to promotional techniques, namely; point -of –sale, shelf signs, end-
of-aisles displays, and special
displays.25% of unplanned purchase are made when the respondent
‘remembered a need’ for the product.
Garder(1994) Influence of consumers’ mood on impulse buying
behavior this study finding is Consumer’s positive moods were more
conducive to impulse buying than negative moods.
Donovan et al. Consumer’s mood or emotional state influences
impulse buying behavior study also highlights Feeling of pleasure in the
shopping environment are positively related to impulse purchase behavior.
Rook and Fisher (1995) Self -identity and impulse buying behavior
and finding are Men reported more personal (independent) identity reasons
for their purchases whereas women reported more social (rational) identify
reasons.
Beatty and Ferrell (1998) Impulse purchasing tendency as a
consumer personality trait and finding of this studies is Consumer’s positive
moods was associated with the urge to buy impulsively.
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Wood (1998) Influence of age on impulse buying behavior this
studies finding is impulse buying increase slightly between the 18-39 years
of age and declined thereafter
Kacen and Lee (2002) Moderating influence of culture on
Consumer’s impulse buying behavior this study also highlights Individual
cultural difference factors systematically influence Impulsive purchasing
behavior.
Jones et al.(2003) Extends the notion of impulse buying tendency
from a general personality tendency to a more product-specific variable this
studies finding are Product –Specific conceptualization of the impulse buying
behavior was a better predictor of actual Impulse purchasing behavior.
A study published in the June 2008 issue of the Journal of Consumer
Research suggests that consumers are more susceptible to making impulsive
purchases for one brand over another if they are distracted while shopping. In
the study, Central Michigan University Psychology professor Bryan Gibson
surveyed college students by measuring their preference for a variety of soft
drinks, including Coke and Pepsi. Results of Gibson's study found that implicit
attitudes, or those that people may not be conscious of and able to verbally
express, predicted product choice only when participants were presented with a
cognitive task, suggesting that implicit product attitudes may play a greater role
in product choice when the consumer is distracted or making an impulse
purchase.
Theoretical Background
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Literature provides two explanation of the impulse buying
behavior (Abratt and Goodey,1990), namely exposure to in-store stimuli and
customer commitment. The exposure to in-store stimuli states that in- stimuli
produces impulse purchase simply because it acts as a reminder of the
shopping needs. According to kollat and Willett (1969), in-store stimuli assist
in making purchase decisions and offer consumers new ways of satisfying
needs.
Customer commitment hypothesis maintains that impulse
buying is in part attributable to incomplete measure of purchase plans (Kollat
and Willett,1969; and Abratt and Goodey,1990)concluded in a study of 600
supermarkets that some unplanned purchase were probably a result of
exposure to in-store stimuli. Other unplanned purchases are actually not
unplanned at all, but are caused by the way in which the behavior is usually
measured. If this is accepted, then the results of various studies measuring
unplanned purchase, using the interviewing technique referred by Kollat and
Willet(1967)would be inflated to the degree to which the unplanned
purchases made are not a result of exposure to in-store stimuli. In other
words, the customer-commitment hypothesis explains that these stimuli play
a vital role in reminding the consumer that certain products were
(Subconsciously) planned and should be purchased.
However, the two explanations support the role of in-store
stimuli in impulse buying. Therefore, we consider that buying in-store stimuli
influence impulse buying.
Data Analysis:
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Table 1: Descriptive statistics of Respondent Characteristics
Attribute
Measured
Item Frequenc
y
Percentage%
Store Size
Small 10 25
Medium 15 37.5
Big 15 37.5
Age
20-29 12 30
30-39 20 50
>=40 8 20
Gender
Male 25 62.5
Female 15 37.5
Annual Income
<1Lakh 3 7.5
1-3 Lakh 15 37.5
3-5 Lakh 5 12.5
Not
Answered
17 44.5
Profession
Student 6 15
Housewife 12 30
Employed 16 40
Self-
employed
2 7.5
other 2 7.5
Purchase
Frequency
<1= time 16 40
2-3 time 16 40
4-5 time 4 10
>5 time 4 10
Accompanied with
Marital status
Alone 14 35
Family 13 32.5
Friends 13 32.5
Married 35 87.5
Unmarried 15 12.5
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In-store
stimuli(Yes)
Product
display
15 37.5
Product
Price
16 40
Large
Variety
7 17.5
Store
Ambience
1 2.5
Need of the
Hour
1 2.5
Departmental
Unplanned
Purchases
Apparel 2 5
Furniture 2 5
\home
Appliances
1 2.5
Electronics 1 2.5
Toiletries 6 15
Cosmetics 9 22.5
Sporting
Goods
1 2.5
Groceries 1 2.5
Toys 2 5
Fruits &
Vegetables
6 16
Footwear 9 22.5
Total 40 100%
Table 2 Influence of the Type of Stimuli on impulse purchase Across Various
Store Sizes.
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In-Store Stimuli
Store Size
Total
Small Medium Big
Product Display 2 3 10 15
product Price 6 4 6 16
Large variety 1 2 4 7
Store Ambiences 0 0 1 1
Need of the hour 0 1 0 1
Total 9 10 21 40
We analyzed the in-store stimuli across various
store size. The results are shown in Table 3. Table 3 shows that the product
price is the greatest stimulant of impulse purchase for small-sized stores. For
big stores, the product display and the product price influence customer
impulse purchase In other words, in-store stimuli of impulse purchase vary
across store size.
Table 3 Type of the Item Purchase on Impulse Across Various Store Sizes.
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Departments Store Size Total
Small Medium Big
Toiletries 3 2 1 6
Footwear 2 3 4 9
Cosmetics 3 4 2 9
Fruits & Vegetables 2 1 3 6
Total 10 10 10 30
From table 1, we found that toiletries, footwear,
cosmetics and fruits and vegetables were the most frequent items purchased
on impulse. Therefore, we analyze only these four categories across various
store sizes. The results are shown in Table.3 Toiletries and cosmetics formed
the largest categories of impulse purchases from small sized stores. Footwear
contributed the largest category of impulse purchases from big-sized stores.
Table 5 Demographics of Largest Impulse Purchase Categories
Demographics Toiletries Footwear Cosmetics Fruits &
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Vegetable
Gender
Female 3 4 4 2
Male 3 5 5 4
Age
<20 2 4 1 0
20-29 1 2 3 0
30-30 2 2 4 2
>=40 1 1 1 4
Profession
Student 1 1 2 1
Housewife 1 3 0 2
Employed 2 1 3 2
Self
Empl
oyed
1 2 4 0
Other 1 2 0 1
Marital Status
Married 5 6 6 5
Unmarried 2 3 3 1
Purchase
Frequenc
y
<=1 1 3 3 2
2-3 Times 2 2 2 2
4-5Times 2 2 2 2
>5 Times 0 2 2 0
Accompanied
with
Alone 2 3 5 2
Friends 2 4 2 3
Family 2 3 2 1
Total Unplanned 06 09 09 06
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Analyzed the demographics of these four categories of
impulse purchases as shown in table 5 the unplanned purchases were made
by females, except for cosmetics and fruits and vegetables category where
males made most of the purchases. males made most of the unplanned
purchase in cosmetics when they visited the store alone. most of these males
were married and above 30 years and most of the unplanned purchase took
place among the married people. however, when males were accompanied
with their friends, they purchased fruits and vegetables. most of the
unplanned purchase were made by service class people.
Finding
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1) Most of the impulse buyers (37.5%) belong to middle class with an
annual income ranging from one to three lakh per annum.
2) Most of the respondents were employed, married males in the age
group of 30-39 years.
3) Students hardly purchase on impulse.
4) Groceries and electronics attracted least unplanned purchases.
5) Fruits and Vegetables, Cosmetics, Footwear and toiletries contributed
the maximum to impulse purchase in terms of volume.
6) Incidence of impulse buying was common among the initial buyers as
compared to the frequent shoppers.
7) The product price is the greatest stimulant of impulse purchase for
small-sized stores. For big stores, the product display and the product
price influence customer impulse purchase and medium-sized
stores ,need of the hour influences customers to purchase on impulse.
8) The females who made unplanned purchases were mostly housewives,
usually above 30 years. the unplanned purchases took place when
these females were accompanied with their family or were alone.
9) Surprisingly, males made most of the unplanned purchases in
cosmetics when they visited the store alone. Most of these males were
married and above 30 years and most of the unplanned purchases took
place among the married people. when males were accompanied with
their friends, they purchased fruits and vegetables.
Suggestions:-
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1) High impulse purchase items (fruits and Vegetables, cosmetics,
footwear, toiletries, etc.,) that need to be displayed to the customer at
places where they attract maximum attention of the customers (such
as near billing point, or at the shelf level equal to the eye of the
customer).On the other hand, the low impulse purchase items can be
stored as lower shelf levels as compared to impulse purchase items).
Conclusion
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In this study, we attempted to extent the findings of previous study by
analyzing impulse purchase across various store sizes. Surprisingly, the
impulse purchases contribute more to total sales in medium-sized retail
stores rather then big-sized retail stores .Need of the hour was the main
factor that contributed to impulse purchase in medium-sized retail stores,
while product display and product prices were the major in-store stimuli in
large stores. For small-sized stores, product price was the main factor that
attracted impulse purchases. Also ,the product categories that attracted
impulse purchases were different in different stores. One of the reasons for
such a result could be that the customers perceive big retail stores to the
costlier than small stores. Moreover, there is hardly any difference in prices
of a big retailer and a medium-sized retailer thereby inhibiting customers to
purchase from a big retailer. And the convenience obtained in a big-sized
retail store is available in a medium-sized store also. As consumers mostly go
to these stores for purchasing groceries, big-sized retailers do not pose any
special advantage over small-sized retailers. For products apart from
groceries, even big-retailers do not keep as much variety as a specialized
small-or-medium-sized store.
References
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1.Abratt R and Goodey S D (1990), “Unplanned Buying and In Store Stimuli in
Supermarkets”, Managerial and decision Econimics,Vol.11,No.2 pp.111-121
2. Betty S E and Ferrel M E (1998), “Impulse Buying: Modeling Its
Precursors”, journal of retailing Vol.74,no.2.pp 169-191
3. Bellenger D N Robertson D H and Hirschman E C (1978), “Impulse Buying
Varies by product”, Journal of Advertising Research,Vol.18,pp.15-18
4.Hoyer W D and Maclnnis D J (1997),Consumer Behavior, Houghton Mifflin.
5.Kacen J T and Lee J A (2002),”The Influence of culture on customer
Impulsive Buying Behaviour”, journal of consumer psychology,Vol.12
No.2,pp. 163-176
6.Freud.s (1956) “Formulation on the two principles of mental Funtioning” in
the standard Edition of the complete psychological works of Sigmund &
A.freud, eds, London
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Topic:- Impact of Store Size on Impulse purchase
Index
1) Introduction
2) Objectives of the Study
3) Research Methology
4) Literature Review
5) Analysis & Findings
6) Conclusions
7) Bibliography
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