Impulse Buying & its nudges

Impulse Buying is a term used when goods/service are bought without planning to do so in advance as a result of sudden whim or impulse. Consumer behavior has always been a subject of interest for a marketer. The basics of Consumer behavior as a subject touch upon the consumer decision making journey which is a well laid out path. But often marketers have
noticed that the customer is not so rationale during the buying process as much they had thought them to be.
This has led to market researchers spending a significant amount of time to understand the impulsive buying behavior of the customers. The economic importance of the impulse shopping is well-established in the retail world ( Verplanken & Sato, 2011 ). With an estimated $4 billion being spent annually in an impulsive manner ( Liao & Wang, 2009 ), and about 62% market sales in supermarkets, and around 80% sales in luxury goods being attributed to impulsive purchase ( Ruvio & Belk, 2013 ), the phenomenon is very important to the retail world. The marketers finally were able to separately understand that a ‘need’ of the customer and ‘want’ of the customer can be different and though the need might get fulfilled every time the customer buys certain goods, the wants may be still stay unfulfilled. Researchers argue that impulsive buying is a function of cognitive aspects like lack of planning and deliberation and affective aspects like pleasure, excitement, compulsion, lack of control, regret. Further few researchers also argued that cultural orientation of the consumer, whether individualist or
collectivist will also impact the impulsive buying tendency of the consumers. Behavioral economics and is a branch of economics which has emerged because of the marketer’s need to adopt new techniques to influence customers through directly invoking favorable impulses in minds of customer for the products. Nobel prize winner Dr. Richard Thaler’s nudge theory also
focuses on the nudges that a marketer can deploy to influence the customer to buy the products.
However, it has been argued that with the markets developing to such an extent and marketers using all sorts of psychological techniques to manipulate the buying behavior of the customers, consumerism is on a spree as people are simply buying more than they would ever require.
Obviously, rising consumerism is because of the increase in purchasing power of the people, but also because of the multiple touch points now available for the marketer to influence the minds of consumers. More time, a consumer spends on mobile/social media/e-commerce sites, more is he/she susceptible to the manipulation by marketers to nudge him/her to buy things they
do not need. It is a well-known fact that people assign lesser value to gain which might happen in future than the gain in present moment of time and that value decreases further in this Volatile Uncertain Complex Ambiguous world (VUCA) world. For example, people assign more value to the small pleasure they get from buying a thing which they might not need right now
than the anticipated pleasure they might get if they invest this money and earn a substantial return in future. This is known as hyperbolic discounting.
So if we agree that consumerism is pushing marketers to involve more with the consumers and understand them and come up with better products for the consumers, we have to acknowledge that marketers use the same consumerism to manipulate the minds of consumers to make them
buy what might not be necessary at the moment which is impulsive buying. This has led to rising critique of contemporary capitalism. The present day consumerism and capitalist society is challenged on 4 major aspects like: moral, aesthetics, financial and environmental.

On the moral front critiques argue that rising consumerism and idea of acquisition of things displaces worthwhile priorities. People nowadays put more emphasis on making himself/herself happier through external things/places rather than looking into their own selves. Consumer society/ Capitalist society which might feed our shallow desires today but they corrode our deeper selves. People are no longer satisfied with what they have and are always looking for more and more acquisition of things which puts an unnecessary pressure of misplaced idea of success in minds of people
On the aesthetic front, the criticism is about the brashness and the showiness that comes along with the materialism in today’s world. It is the comparison with the peers and the comparison is done through what you buy vs what they buy. The criticism focuses on the façade that the consumers have to put up with in the current day and age to show-off the success in the capitalist consumer society while the same consumerism feeds products to maintain the façade and in turn feeds its own self.
The financial criticism comes from the rising use of debt/credit to buy things for today from the money that they might get tomorrow. Even the conservative economies like India and China which puts emphasis on saving for the future, the transition is happening into a debt-ridden consumer economy which just buys too much and what is not necessary. The emergence of credit cards and cash backs are actually methods used by marketers to manipulate the buying behavior of consumers by shattering the walls which prevent them from buying less useful things.
The environmental critiques argue that as consumerism gives rise to more consumption and more demand, it also means more production and more use of earth’s resources and more exploitation of resources. The environmental activists argue that earth will not be able to store all these products that the consumers buy which they do not need today. The only way to save planet, according them is to reduce use of energy which means reducing the consumption.
Today when most of the economies around the globe are capitalist economies, though competition is pushing markets towards higher productivity and higher consumption, it is paramount to understand how manipulation of consumer’s behavior can impact the society in both positive and negative ways.