The Art of the Impulse Buy
Posted Nov 17, 2020
How strategic promotions can help capture last-minute purchases and dramatically increase incremental revenue
Whether it’s just a quick bite on the go or an icy cold soda on a hot summer day, convenience store (c-store) consumers just can’t help but make some purchases on impulse.
Research shows that in “normal times” nearly 90% of American general retail consumers have made impulse purchases, including more than 60% who’ve commonly purchased prepared food items like snacks, sandwiches, or ready-to-go pizza. Factor in the emotional stress of the COVID-19 pandemic — and the limited mobility, socializing, and shopping trips — and that number rises to more than 70%, largely because consumers say it helps their emotional state.
Still, despite consumers’ penchant for impulse purchases and the fact that they consume what they buy within an hour of purchase at c-stores, many brands and independent convenience retailers struggle to capitalize on new revenue opportunities because the stores can’t provide the same level of insight, support, and partnership as larger national chains.
As a result, CPG brands are eager to squeeze more margin from a significantly underserved addressable market that’s traditionally been a black hole in their business. At the same time, retailers hoping that more discounts will result in more last-second sales are also increasingly looking for new and inventive ways to drive sales performance.
Seizing hidden opportunities
There are more than 150,000 convenience stores in the United States and a hefty portion of them — almost 80% — operate independently of large corporate parent companies.
Unlike their larger competitors, independent retailers don’t often have access to the affordable in-store tools they need to succeed. They also tend to operate at a smaller scale, which requires fewer financial resources and employees, but creates challenges around developing and deploying new strategies for increasing the rate and volume of impulse purchases.
For brands, it’s an opportunity to bring their clout and expertise and leverage technology like next-generation promotions and data insights platforms to create a mutually beneficial (and profitable) relationship with independent c-stores. For c-stores, it’s a chance to leverage established brands’ name recognition, sales and marketing expertise, and resources to launch targeted promotions that drive net new and incremental revenue.
Now, instead of relying on store owners and operators to create their own discounts or special offers that aren’t rooted in solid data analysis, brands can use tools like Skupos Engage to strategically deploy promotions that create an environment ripe for more impulse purchases. Similarly, c-stores can take advantage of the tools and platform to run a wide range of attractive promotions sponsored by their brand partners, helping to increase last-second sales without having to fund the efforts themselves.
Better information for better decisions
These solutions enable brands and retail partners to better understand the in-store customer journey and spending habits to create new promotions or optimize existing ones.
In particular, brands can use promotions optimization tools to gain visibility into how many products they’re selling per day, at what price, and even which combinations of products are most typically purchased together.
Armed with richer and more accurate data than ever, brands can create a range of impulse purchase-oriented promotions to achieve a host of specific goals like:
- Using ideal product pricing to incentivize purchasing more of the same product, such as with buy two get one promotions or similar offers
- Creating mixed or complementary product bundles at the checkout counter to increase average order value for the retailer and sell through additional units of the brand’s target product
- Launching flash sales or other short-term promotions to improve adoption of a new product
- Pulling in data about outside factors like seasonality, regional special events, or a public health crisis to create attractive promotions at checkout. For example, summer temperatures might make soda or iced coffee products more inviting for an impulse purchase or the ongoing COVID-19 pandemic makes consumers more likely to buy a special treat on a whim that they’d otherwise not purchase.
The temptation to purchase an item on impulse may be too much for the average consumer to resist. But for too long, national brands and their independent convenience store partners had few ways of capitalizing on that irresistible draw. Now, with promotion optimization and in-store insights tools from Skupos specifically designed for the independent c-store market, the systems and data are finally in place to create a significant competitive advantage for both brands and stores.
Start bringing greater visibility, revenue, and profitability to your brand or store with the Skupos platform by contacting us today.