Impulse Buying and The Digital World: How Retail is Adapting

November 2013

Internet retailing growth has been driven by price and product range, but as store based retailers learn to leverage their multichannel capabilities and smartphones blur the lines between in-store and online, e-tailers must raise their offer in order to compete. Euromonitor International investigates how the online world can harness a key in-store sales driver, impulse buying, by adapting new technologies and reinventing old retail strategies.

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Internet retailing is having to work harder

As the competitive environment within internet retailing becomes fiercer, e-tailers are having to work harder for sales. Impulse has traditionally been weaker online than in-store, but could drive sales growth if harnessed.

Store-based retailing is a more natural fit for impulse

Consumers prefer shopping in-store because of immediacy, convenience, easier returns of unsuitable purchases and being able to try before buying – which are also all key elements of an impulse buy.

Rise of smartphones is a gamechanger for online impulse retailing

M-commerce is more than just internet retailing via a different gadget; mobile online access has made it possible to find and buy products almost instantly and almost anywhere.

Buying no longer happens just in stores or online – the whole world can become a shop

Browsing no longer just happens on a screen – any object can be a potential purchase with new finding apps, while virtual stores create shelves full of products in two dimensions.

Making sure the product is right without seeing and testing it is still a challenge

Further development is needed before apps become virtual replacements for the fitting room or tester pot, but the process has begun. In-home body scanning could be a major change to hit apparel internet retail.

Easier payment methods are opening up sales to retailers as well as e-tailers

Consumers are being freed from the requirement to enter a credit card number to pay online, or even have a card at all. Contact payments have potential for speedy collection, while instant credit will boost big-ticket buys.

Order fulfilment is a focus area – speed or convenience is key

Immediate gratification is a key driver of impulse buys, but same day delivery, 90 minute delivery and convenient collection points are all making order fulfilment issues less of a barrier to online impulse sales.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

Introduction

Scope
Key findings

Current Trends in Online Retail

Cross-industry online penetration patchy
Online vs offline: Different worlds for product categories
Category focus: Beauty and personal care
Category focus: Apparel
Impulse buying: A strategy for online-only retailers too

The Anatomy of an Impulse Buy

Consumer perceptions: In-store v s online
What consumers like about stores fits well with impulse buying
Smartphones: Technology tailor-made for a multi-channel world
Smartphones take over the mobile phones market
Four steps t o an impulse buy

Encountering

Encountering: Virtual stores bring the shelves to the shopper
E-tail specialist gets physical to tap into impulse buying
Encountering: Product finding apps turn the world into a store
Augmented reality makes product information come alive
Encountering: Magazines put virtual showrooms in context

Trying

Tech interfaces bridging the gap between online and in-store
…But apps put product experience right into customers’ hands
Bodyscanners aim to take guesswork out of online shopping
For now, the solution is low tech: A smooth returns process

Buying

Factors making online impulse shopping quicker and easier
Impulse options increase as mobile technology advances
The race to build the next global payment system
Online impulse could lose out as credit card payments open up
The original online impulse format: Flash sales
Instant credit makes online impulse more affordable

Possessing

Possessing: Parcel collection lockers become a focus area
Possessing: Internet retailers achieve almost instant gratification
Crowdsourcing models make shopping easier – but do they pay?

What’s Next?

Mobile phones to define the online world in emerging markets
Impulse opportunities: Apparel
Impulse opportunities: Electronics and appliances
Impulse opportunities: Health and beauty
Impulse opportunities: Home and garden
Impulse opportunities: Media products
Impulse opportunities: Toys and games
Impulse opportunities: Grocery
Apparel to cement its position as leading internet category by 2018
Shifting consumer habits complemented by new technologies
Category potential for “seeing” and “trying” strategies
Category potential for “buying” a nd “possessing” strategies

Report Definitions

Data parameters and report definitions
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