Introduction
Impulse purchasing is a consumer behavior that marketing strategists use as a way to increase revenue. Much research has been done on this topic, as well as studies about the reasons behind it and its implications in the traditional retail business. However, the subject of such behavior is not well-researched in relation to modern e-commerce and online shopping. With advanced improvements in service delivery and an increase in the variety of goods, as well as convenience of purchasing, Internet marketing has the potential to strengthen the stimuli, facilitating impulse buying significantly. As such, it is not entirely known how much consumers are willing to pay for such modern conveniences. Premium services and goods are abundant among Internet-operating businesses, yet is it something the buyers would purchase? The current research attempts to analyze the reasons for impulse buying in the modern-day and answer and discuss the related questions about consumers’ willingness to pay a premium for convenience.
Methods
The current research utilizes various literature on the topic of impulsive purchasing, consumers’ willingness to pay a premium, and the conveniences they receive. The literature is analyzed and synthesized in order to draw a conclusion. The research utilizes articles from peer-reviewed journals, newspapers, and trade publications. The findings’ meaning and potential implementation are discussed; the topics for possible further research are identified.
Literature Review
Impulse Purchasing of the Modern Day
Impulse purchasing is a consumer behavior that can be described as a sudden, irresistible urge to buy products. Typically, this behavior is encouraged by retailers through various marketing decisions (Solomon, 2014). The most common example of such impulse items is candy or gum placed near the checkout or specific aisle placement that cater to the sudden urges of the consumers (Solomon, 2014). However, such notions were proven to be both uncontrollable and controllable. According to Iram and Chacharkar (2017), impulse purchasing is affected by several external and internal factors, such as a customer’s mood and income.
With technological advancement and the popularity of online shopping, impulse purchasing has changed. It was found that in e-commerce, this behavior is stimulated mostly through visual appeal and navigation of the website, contributing to positivity and pleasant feelings of shopping (Zhao et al., 2021). Online marketing also impacts consumers’ decisions through target advertisement and inventory availability information, emphasizing the scarcity effect (Zhao et al., 2021).
In the context of the COVID-19 pandemic, online marketing and related to it, impulse purchasing has been gaining more popularity. In order to avoid contaminating the infections, more consumers make the decision to shop through the Internet (Zhao et al., 2021). Additionally, during prolonged lock-downs and periods of working from home, impulse purchasing has served as entertainment. Not only goods are acquired this way, but also services such as food delivery and streaming platform subscriptions.
Conveniences of The Contemporary Market
Impulse purchasing behavior occurs as a consumer’s response to a stimulus, whether it is a marketing strategy or the product itself. Convenience can be considered one of the main features of the product that influences the decision to purchase. This is due to the fact that it renders other options irrational, such as laundering clothes by hand instead of using a washing machine (Wu, 2018). Despite the former being cheaper, convenience outweighs that option. Just as such, more and more ways of practically replacing mundane labor have been emerging, shaping the contemporary world.
Technological advancement allows convenience to be utilized as the main factor affecting consumer behavior. A phone with Google search at hand when a question arises, or the Amazon company that can conveniently deliver any product to the doorstep is what defines the current era. According to Novita & Husna (2020), convenience is the primary motivation behind ordering food delivery. Since the break of the pandemic, these services became even more in demand since they not only save time but also ensure the customer’s safety.
The ease of acquiring goods or services, as well as the time required for purchase, also affects the consumers’ impulse purchasing. A conveniently functioning website was found to stimulate buyers into spending more money (Bismo et al., 2020). Simple to navigate merchandise and the speed of processing transactions facilitate customers catering to their sudden urges. As such, convenience is not only a motivating element of impulse purchasing, but it also serves as an operational function.
Willingness to Pay a Premium
Paying premium refers to an additional and usually unnecessary payment made for the product or service above its average cost. Typically, spending more than needed is considered irrational and excessive; however, the market continues to offer a premium to consumers. This is because of the fact that a premium label implies a guarantee of higher quality or popularity of the product. As such, paying a premium is usually considered luxurious and prestigious.
Although, with the advancement in online shopping and online services in recent decades, premium pay obtained a new variation. Such services as delivery can now be accelerated for additional cost; adding extra features to the desired product is considered premium. These examples show the lack of luxury and enormous prices for the premium goods, making the premium more affordable to the general public.
The marketing strategy of making a product or service more convenient for an additional charge has gained much more popularity in recent years. One of the first examples of that can be the effect of credit cards and mobile payments. According to Boden et al. (2020), the convenience of using novel payment methods is a new mediator on the way of increasing consumers’ willingness to pay a premium.
The exact change in attitude towards paying a premium is evident in the food industry. According to Findling (2017), on average, consumers are willing to pay 11 percent more for each convenience layer related to ordering a meal. Modern online shopping acquired a new feature of buying groceries from home. Since it saves the consumers’ time, this advantageous service is seemingly worth paying a premium.
Discussion
Through a thorough literature review, much has been found on the topic of impulse purchasing and willingness to pay a premium for convenience. The contemporary world offers a great many opportunities for businesses to utilize the novelties and advances of modern Internet technologies. Impulse purchasing is seen to be related to the convenience of buying goods; it is also known that the impulse can be stimulated even in the context of online shopping, which is currently popular among many consumers. Convenience itself has been found to be a major motivational and operation element in impulse purchasing. In today’s market and e-commerce, it is utilized in many ways to facilitate consumers’ desire to cater to their sudden urges. Their willingness to pay a premium for services and goods’ quality has increased due to the overall accessibility and advantages of paying a premium.
The results indicate that consumers are willing to pay a premium for convenience in the contemporary world of online shopping and e-commerce. Due to the dangers of contaminating an infection related to the pandemic, as well as saving time and energy, people pay additional money for convenient services (Novita & Husna, 2020). Since offering greater convenience is positively related to both impulse purchasing and willingness to spend additional money, it can be considered to have the potential to stimulate consumers into paying a premium impulsively. However, such conveniences must be beneficial to the people in order to avoid the development of a similar to the ad blindness phenomenon.
In the current era of the increased prevalence of online shopping, the knowledge and understanding of preferences of the consumers’ conveniences and impulse purchasing stimuli can facilitate the development of a highly efficient business model. Since it is known that navigating and visualization of e-commerce websites play an essential role in perceived convenience (Zhao et al. 2021), companies can work towards improving their services to meet the necessary expectations. By promoting practical usability of the service or product and saving people’s time and energy, a business can significantly increase its revenue by offering premium and stimulating impulse purchasing.
Further Research
The current findings suggest a way of potentially successful business model. Future research can be focused on examining possible methods of implementing the strategy of utilizing convenience as a stimulus for impulsively buying a premium. If such a model can be proven to increase impulse purchasing revenue significantly, further studies should center around potential practices of ensuring both the customer and the company’s benefits.
Additionally, the limitations of offering such conveniences are not well-known. The degree of consumers’ willingness to pay a premium and the range of acquired advantages should be researched in the future. The trajectory of possible developments within online marketing and the influence of time-saving conveniences on the traditional market can be considered a relevant subject to study based on the findings of the current research.
Conclusion
The contemporary world is shaped by technological advances and the benefits of their conveniences. In recent years, online shopping has become more prevalent among consumers. Due to this, the traditional ways of stimulating impulse purchasing are no longer as popular. Companies are forced to find new ways of attracting customers through online marketing. However, due to the recent pandemic outbreak and lock-downs, more and more people are interested in time-saving, safe services. People began to order more meals and groceries from home, paying for delivery and streaming platforms, increasing the overall satisfaction rate of such conveniences. In the current research, such amenities were found to be sufficient enough in order for consumers to pay a premium. Not only that, but it is also now known that these advantageous purchases serve both motivational and operational functions. Conveniences stimulate impulse purchasing and take little time, not letting consumers reconsider their choices. As such, convenient services can have the potential to facilitate impulsively paying a premium; however, such strategies should be constructed carefully in order to avoid the possibility of developing blindness to such promotions in customers.
References
Bismo, A., Putra, S., Sarjono, H., & Nasrul, L. (2020). Effect of functional convenience and representational delight on positive emotional effect and impulse buying of discount group site users in Indonesia. Pertanika Journal of Social Sciences & Humanities, 28(2).
Boden, J., Maier, E., & Wilken, R. (2020). The effect of credit card versus mobile payment on convenience and consumers’ willingness to pay. Journal of Retailing and Consumer Services, 52. Web.
Findling, D. (2017). As on-demand services proliferate, consumers pay more for convenience and a personal touch. CNBC.
Iram, M., & Chacharkar, D. Y. (2017). Model of impulse buying behavior. BVIMSR’s Journal of Management Research, 9(1), 45.
Novita, D., & Husna, N. (2020). The influence factors of consumer behavioral intention towards online food delivery services. TECHNOBIZ: International Journal of Business, 3(2), 40-42.
Solomon, M. R. (2014). Consumer behavior: Buying, having, and being (11th ed.). Pearson.
Wu, T. (2018). The tyranny of convenience. The New York Times, 16.
Zhao, Y., Li, Y., Wang, N., Zhou, R., & Luo, X. R. (2021). A meta-analysis of online impulsive buying and the moderating effect of economic development level. Information Systems Frontiers, 1-22.