The Impulse Equation

How to trigger a purchase through high-tech and traditional techniques.

By
Samantha Oller, Senior Editor/Special Projects Coordinator

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See candy, buy candy, eat candy. Repeat.

This, broken down into its simplest parts, may be the definition of an impulse purchase. But triggering that “buy” part of the impulse equation is almost an experiment in psychology.

“If they come in with the intent to buy one thing, how do you influence them to buy something additional? In my mind, that’s the essence of impulse,” said Bruce Earhart, vice president of marketing for Handee Marts Inc., Gibsonia, Pa. “You’re modifying and changing the shopper experience in some way.”

“It’s not planned—that’s my definition,” said Jim Matorin, “business catalyst” for Smartketing, a Philadelphia based marketing consultancy for the CPG and food industries. From his standpoint, triggering the purchase decision is a journey that, thanks to technology, can begin before a consumer even gets a craving.

Earhart and Matorin joined a group of more than 40 retailers and suppliers representing the candy, gum, snack and lottery industries in Chicago in May to wrangle the topic at CSP’s 2012 Driving Impulse Sales Forum. The discussion highlighted how truly 21st century the art and science of impulse marketing has become, as attendees debated how to marry tools such as social media, apps and mobile banner ads with traditional shippers, shelf talkers and signage.

For Matorin, the ideal approach for the times can best be summed up in the concept of  “nanomarketing”—or “intercept marketing strategies that capitalize on mobile technology that will accelerate our moment of truth.”

Putting it more simply, how can retailers and manufacturers best use mobile technology to trigger a purchase from consumers who already are time-starved and, according to some research, who spend only 2 minutes in a c-store? A first step is simply getting customers from the pump into the store.

Matorin pointed to loyalty apps such as Shopkicks—now being tested by ExxonMobil—which awards points to customers just for entering a participating store, which can then be redeemed for movie tickets, gift cards and more.

“Is there anything we can do at the pump with QR codes?” he asked. “Is it text messaging so you’re getting to the person who is third in line at the pump? Our challenge here is to understand what technologies you can utilize to get that person in the door from the pump.”Other opportunities include:

  • Customized Loyalty Programs.Gone are the days of punch cards, said Matorin. Consider using social media such as Facebook and FourSquare to drive a loyalty program. For example, Quick ChekCorp., Whitehouse Station, N.J., offers a free cup of coffee to every FourSquare customer who visits its stores six times.

“It’s a great source for a merchant to up sell,” said Lisa Austin, vice president of sales, convenience, for Kent, Wash.-based Oberto Brands, and an avid Foursquare user. She observed that after checking into a restaurant, many of them will suggest she try a new item at a discount.

  • Mobile Banner Ads. To better target millennials, consider ads on popular music-streaming apps such as Spotify and Pandora. For example, an Oberto meat snacks ad, when clicked, directs consumers to the nearest retailer selling the product. “There are people out there who are hitting all touch points in our life … so that subliminally, it’s in our head,” said Matorin.“We just don’t think generically ‘candy’ anymore. We’re thinking a specific candy because it’s been in our face.”
  • Shelf Talkers. Place QR codes on shelf talkers next to new snack or candy items to take customers to exclusive promotional material, nutritional information or a video. (See “Breaking the QRCode,” p. 95.)

Figuring out how to spur impulse sales with the right mix of social media, mobile technology, traditional merchandising and loyalty strategies is a task best taken in stages. As Kera Smith, merchandising specialist for Top Star Express Convenience Stores, Emmaus, Pa., asked, “If we decided to jump into it, should we keep coffee punch cards? Our older customers won’t use a smartphone.”

Yes, advised Matorin. “People who are going to be most successful are starting slowly and ramping up,” he said. “Instead of being all things to all people, you probably do something as it relates to Twitter and Facebook before you jump into the next thing that comes along.”

Embracing Tradition

While the possibilities of mobile technology seem endless, the holy grail—and the biggest payback—is when high tech is played off tried-and-true merchandising practices.

“When we talk about social marketing… it is to drive people into our location. Then when they’re there, good displays get people to buy,” said Jeff Sinacori, vice-president of retail development for lottery supplier Scientific Games, New York.

For example, Quick Chek has conducted two-hour sampling events at its stores in coordination with DSD vendors, and driven participation through Facebook and Twitter. Recent promotions included samplings of Pepsi Next, DrPepper 10 and blk. Beverages’ blk.water, an enhanced bottled water created by participants of the popular reality show “Real Housewives of New Jersey.” The manufacturers absorbed the cost of sampling promotions for one week, and had access to Quick Chek’s sales data for their products.“

You better make sure the product is there,” Bill Tencza, senior category manager, warned retailers. “Otherwise, someone will do a negative post about it.”

Handee Marts, a 7-Eleven master franchisor with 62 sites in four states, has pursued a social media strategy that includes a Facebook page and Twitter feed, from which it has run contests and gasoline giveaways. It also has an app powered by Gas Buddy’s OpenStoreplatform. But when it comes to making the in-store impulse sell, Handee Marts relies mainly on traditional tactics.

For candy, points of interruption such as shippers have worked well. “We call it ‘merchandising by stumbling into,’ ”said Earhart. “By putting shippers in key traffic areas, if a customer walks into it, they’ll buy.” More recently, the retailer has found success with shippers offering “two-for” pricing on standard bars, seasonal items such as Reese’s peanut butter Easter eggs, and regional favorites such as Mallo Cups.

For snacks, adjacencies have proven key, with gondolas carrying better-for-you and sweet items facing the store’s 12-foot coffee bar. Handee Marts has also designed its own end cap featuring 7-Eleven’s private-label 7-Select line of candy and snacks; positioned near the front of the store, it has delivered a 15% to 20% lift in private-label sales. Similarly, a rack featuring Mars’ Combos, positioned across from the Pepsi door of the cooler, delivered a70% lift in sales of the snack. For general merchandise, Earhart stressed the importance of getting in and out of trends early (see: Silly Bandz), and having an exit strategy for product that doesn’t sell.

One nascent segment that has been a hit for Handee Marts is e-cigarettes. The retailer placed acrylic towers at the checkout by the lighters, offering a value and premium-priced brand at a $6.99 and $8.99 price point, respectively.


Highlights

Attendees of CSP’s 2012Driving Impulse Sales Forum learned:

  • How to trigger an impulse buy with social media.
  • Why QR codes are a promising tool to increase impulse sales
  • Best practices for merchandising impulse categories.
  • How daily multiple pricing can boost candy sales and profits.
  • The reasons for gum’s slump, and what to do about it.
  • How to climb the decision tree for planned and unplanned meat snack purchases.
  • Tips to get lottery buyers away from the counter and loyal to your store.

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