An impulse purchase or impulse buying is an unplanned decision to buy a product or service, made just before a purchase. It’s the purchase made on the spur of the moment. One who tends to make such a purchase is called an impulse purchaser or impulse buyer. 

The decision taken by the customers to buy a particular product is the result of suddenly seeing the product. The significant factor that drives an impulse buy is the shopper’s emotional state. It may also be due to exposure to an extremely effective promotional message. It has been found that 50 per cent of purchases are unplanned. These purchases, especially impulse buys, present an opportunity for retailers who can entice consumers to deviate from their shopping lists.

What drives us to buy those things we don’t need or really can’t afford to use?

Basic evolutionary drives and the tactics retailers use together make us more susceptible to spontaneously spending our money. Shopping in a sense is a feel-good activity and many say it’s a feel-good activity it makes people feel happier instantly. 

Another prime mover is the money that we aspire to save. The feeling of getting a deal motivates us to spend more. So when you come across a notice or an advertisement detailing that a discount is prevalent only for a short period, we feel like we should grab the offer soon and take advantage of that deal that we fear that we may have to pay more in the future. In such a case we automatically go over and look for it, and then usually buy it even if we’re not sure if we want it because it’s on sale right then and there and it might not be there tomorrow.

On average, customers only visit about a third of the retailer’s floor area. It is here that the architecture of a store impacts consumer satisfaction, which in turn might spur impulse buys. This happens when a store takes you from shopping for a specific item to shopping for shopping’s sake. A classic example of this is the “Gruen effect”, implemented by Victor Gruen, an architect who pioneered the first American shopping malls, which made use of light and space to dramatically stage goods in storefront windows that captured the attention of passersby thereby making them customers. Here the sudden instinct to spend cash overpowers our decision to spend wisely and judiciously. It’s about the aspiration, will, mindset and the environment that they try to create.

Retailers pay close attention to how their floor plan can change store behavior. Grid layouts emphasize speed and convenience. Or freeform layouts allow exploration, which can make customers visit more parts of the shop. 

Spots of light take your mind and eyes to the entrance of the showroom and even before you know it, you have taken the scenic route. So with proper lighting, you can steer consumers’ attention toward the different areas and different product selections. 

The secret persuaders at the supermarket checkout area

As pointed out, retailers adopt certain measures to get customers to do impulse purchases before leaving the store. It’s not just those factors that attract customer attention. The role of secret persuaders at the checkout area is also worth noting. They silently, by their very presence, convince shoppers to reward themselves. Candy, snacks or magazines are effective impulse items, and they may be the last chance to increase sales before the shopper leaves the store. 

Use Point of Purchase- Displays both content displays that inform shoppers of certain benefits of a product. 

For example, a sign that promotes a particular soap.

Samples not only showcase the benefits of the products but also applies the social influence

principle of reciprocity of the product. Samples represent a form of gift to the shopper who in turn may feel obligated to reciprocate by making a purchase. Usage of novel, unusual and high-contrast stimuli also helps a lot in this process. It needs to be understood that the shoppers will not go in search of impulse purchases like they do for products they wish to buy. In this situation, extra effort needs to be put in to draw a shopper’s attention to impulse items. This can be done by highlighting impulse purchase zones with brighter colours, additional lighting or unusual decorations. It should be kept in mind, that the products you consider impulse items must fit this purpose and criteria. Grabbing the shopper’s attention won’t help if the highlighted item isn’t the product most shoppers are willing to purchase spontaneously. 

Another major method to adopt is verbal prompting. It can be used in a retail setting as well. Every time a shopper interacts with sales staff, special offers or the latest innovations and new products in stock could be mentioned. Prompting the customers can also be done through visual cues. For example, by Displaying signs indicating which other items can be used in combination with another product you might show a picture near a sofa to indicate which pillows match the sofa design present products with companion items bundle presentation shows shoppers how products can be used in real life. A customer who plans to buy wine glasses might also buy table decorations or other tables where all these products are so appealingly arranged that the shopper cannot resist, however.

How to boost that bottom line and sell a lot more impulse purchases?

Impulse purchases add up fast. Consumers, however, are more likely to spend an extra bit of cash in a physical store. This is because in-store retailers have more control over the entire in-store experience and they can easily introduce the customer to other options available for a similar kind of product.

What exactly are the steps that you can take to improve your impulse purchase sales?

Five easy ways that you can maximize your store’s performance with a few small changes.

1. Start with the product of disability. No one will purchase a product that is not properly placed or which is not seen. The structure and arrangements of your retail space matters, and there are ways to highlight particular impulse purchase items. 

2. Get a lot of signage, large signs. Try to grab the attention of the customers and direct them to those areas. They can make the customer feel like it’s too good of a deal to pass up. Use bright colours. 

3. Use rounded corners on displays too curved around the edges to appeal more to the average consumer. They’re seen as more welcoming and less intimidating. Packaging matters to the look and feel of a package and can affect a customer’s perception of the product. It gives a great shopping experience and adds to customer satisfaction. Make a few changes to try out and see if sales change. You also need to choose the location of your impulse products carefully. In addition to making sure the product is easily seen, take some time to consider where to position your impulse buys. The common spot is at or around the sales area. It’s near the checkout zone, where you’ve probably noticed the most impulse buys in many retail stores.

4. Seasonal items are also a great way to fill your impulse buy shelves. These are one of the best choices for your checkout space and it is suited to the impulse displays as they cater to that sense of urgency. As such products will be available for a short time there’s the possibility to bring more customers.

5. Don’t forget about pricing strategies too. Pricing your products well, giving discounts, bundles or sales add appeal to the purchase and makes it more attractive to the people. Make it affordable. Place lower-priced impulse buys near the checkout area.

During the time of shopping, consumer behaviour is largely found in our subconscious. Most of us love spending money and we’ve been trained to feel happiness when receiving something new, limited time or limited product promotions and still a sense of urgency in the shopper. Putting a constraint on a deal makes it seem even better, Upping the perceived value of an item is a great extra push to convince someone to make a purchase.  By this, you can get the shoppers excited about the unique and new products. Those products that are exciting can bring in great demand from the customers. Like the other strategies mentioned, try out several changes and monitor how they impact sales in your product margins. This will aid in finding the most optimal combination. Finally, make sure you’re relying on a great retail team.

How do you create the advantage of impulse buying?

1)Create FOMO ( Fear of Missing Out)

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Identify the impulse products/services. On an e-commerce site/website, you should put these items on your homepage.

2) Simplify the buying process

3)Provide ease of access to customer support

The phenomenon of Impulse buying is getting great attention from consumer researchers as well as marketers. Having a good sense of knowledge about the factors triggering impulse purchase is very much needed for companies 

Online marketplaces give you the chance to showcase your brand and products on channels that link you to diverse and increasingly global consumers.

What are online marketplaces?

Online marketplaces often provide the following regardless of their style or income model:

• A single platform that many sellers use.
• Web hosting, transaction processing, and general website interface upkeep. Fulfillment services could also be available for extra money depending on the platform.

Although this definition covers the essentials, the lines are becoming more hazy today.

Google Shopping and other search engine shopping destinations show products from various vendors in a marketplace-like setting, but historically, consumers clicked back to retailer websites to find out more and make purchases.

Google is moving toward becoming a true marketplace by now providing its own payment mechanism. Similar to how social networks have long included product listings connected to eCommerce websites in paid advertising, Facebook, Instagram, Pinterest, and even TikTok now accept transactions within their environments, fusing with markets to create new social commerce platforms and experiences.

 Why should I sell on an internet market?

Marketplaces may be advantageous for your company for the following reasons:

Online markets are used by consumers. The attractiveness of buying a variety of things from several merchants in a single transaction is its convenience. Six online marketplaces, accounting for 62% of all eCommerce transactions globally, were among the top eight most popular retail websites on the internet in 2020.

The infrastructure is kept up by the marketplace. You can concentrate on your primary company since you can use an eCommerce site that has already been created and perfected by someone else.

International exposure is provided by online markets. You can acquire exposure across borders without any hassles by using a number of the most well-liked marketplaces in the globe, which cater to viewers outside. Regional competitors like MercadoLibre compete with Amazon, which is powerful globally.

Reputable internet stores–

Some of the most well-known online marketplaces are handled by the greatest names in retail, while others are independent of well-known companies. Top marketplace locations include:

• Amazon- The vast majority of products sold on Amazon come from marketplace vendors in a variety of industries, from electronics to beauty. Amazon is both a seller and a marketplace, thus goods from independent merchants are displayed alongside goods the company sells. The core functionality of Wix eCommerce can be used to create an Amazon shop for those who want to learn how to sell on Amazon.
• Shopping at Walmart With more than 100,000 vendors on its marketplace, which Walmart launched in 2009 (primarily to compete with Amazon), the retail behemoth has had double-digit eCommerce growth since the epidemic. Once their applications have been accepted, marketplace vendors can start selling items alongside those that are available in Walmart shops.
• eBay- With the bulk of things selling for a fixed price utilising the “Buy It Now” option, eBay has evolved from its roots as an online auction site for individuals to sell their used goods to its current status as a popular platform for brands. Approximately half of eBay’s 152 million buyers are based in the United States. Wix eCommerce features eBay as a native sales channel.

Specialized markets

Though the largest online marketplaces provide strong platforms and wide audiences, it may be simple to get lost in the noise, making more specialised niche sites an appealing alternative. In 2021, 42% of shoppers made purchases from one of these locations, demonstrating the popularity of these locations. The top locations are:

• Etsy- Despite offering a wide range of products, from 3D-printed trinkets to vibrant cloth face masks, Etsy places a strong emphasis on handcrafted goods from small vendors. Even though it earned over $330 million in sales in a single quarter with a blistering annual growth rate of 19%, this lends it a specialised appeal.
• Wayfair- Wayfair touts more than 20 million customers and 12,000 suppliers, specialising in “home products” like bedding and kitchen appliances. Wayfair is the leading furniture-related online retailer in the US because to a meticulous vendor selection procedure and attentive curating.
• Newegg- This tech-focused marketplace has gained more than 40 million users since its start in 2011, and they utilise the website to buy electronics, entertainment media, games, and other items.

Choosing the appropriate online market strategy

Selling opportunities on online markets are essentially limitless. But a sound market strategy is essential to maximizing the benefits—both now and in the future. A quick check list is provided below to get you going.

1. Select the location where you will sell

Your marketplace choices can be made with the support of current and potential customers. You can also look at listings on rival marketplaces to get a sense of the hotspots in your industry.

2. Recognize the trade-offs in each market

Markets offer a lot, but they also have their own difficulties. Make sure you comprehend the following before deciding on your product selection and pricing:

Popularity versus rivalry. The largest online marketplaces feature both a large number of sellers and a large number of customers. This implies that increasing visibility might not come naturally, and you might even need to incur additional costs like paid listings in order to attract new clients.

Friend vs foe: the marketplace operator. Some online marketplaces don’t just offer things for sale; they also produce their own private-label products, which could lead to a conflict of interest with other merchants. Amazon has come under fire for stealing the ideas for its new products from marketplace best-sellers and releasing them under its own private label. Due of this, it is crucial to own and maintain your own eCommerce real estate, such as a Wix online store.

3. Select products and establish prices

You can decide which things to sell and at what price once you have a handle on your true costs. The objective is to showcase offerings that are distinctive without being so uncommon as to be infrequently searched for and observed. Established best-sellers (products that fit with popular categories) and distinctive presents or sets are among the items to take into consideration.

4. Construct a robust product feed

Each marketplace has specific guidelines for how product information and photos should be presented. To make use of all the features offered by the marketplace platform, carefully construct your own product stream.

05. Define and evaluate your fulfilment procedure

Larger marketplace platforms charge extra for fulfilment services, which might be especially helpful if your consumers need faster delivery than you can handle on your own.

Make sure to thoroughly test whatever procedure you develop because fulfilment time is frequently one of the factors marketplace algorithms consider to determine which listings receive higher notice.

06. Boost client service

Provide timely attention to them because most marketplace systems track marketplace merchants’ reaction times to customer care inquiries and grievances.

07. Complete, assess, and modify

Once your marketplace products have been released, monitor sales, ad spending, and customer service closely. You may also utilise the built-in monitoring tools to monitor performance. Adjust product offerings, costs, or shipping alternatives as necessary, and always carry out a thorough evaluation before significant occasions, like the busiest holiday season.

What is Inventory?

The most trivial explanation for the term inventory is nothing but the products and commodities that a business sells. This could vary from clothes, shoes, beauty products, or cleaning supplies to paper goods, food products, or beverages. A business succeeds in the simple fact that they sell these products at a reasonable profit margin to make revenue.

This inventory can be broadly classified into four categories:

• Raw materials or components
• Works-in-progress (WIP) 
• Finished goods 
• Maintenance, repair, and operations (MRO) goods 

All of these need to be directly monitored and any problems that might arise in these cases must be addressed immediately as they are all interrelated. Hence if one of them faces an issue all four categories are affected directly or indirectly.

Other important factors related pertinent to inventory is cab be analysed elegantly by answering these very basic questions: Where one stores the product? The capacity of storage and How your inventory is stored? Answering and contemplating the essence of these questions take us toward one of the most pivotal concepts of modern-day commerce known as Inventory Management.

What is Inventory Management?

Inventory management is one of the most vital elements of successfully running an SMB. It refers to Inventory management refers to a step of paramount importance when it comes to commerce and trading where one tracks the trading and movement of stocks of the company. It also includes other aspects like the Buffer Stock, Overseeing the orders received and the stock in place. 

The goal of setting up an effective Inventory management system is to maintain a stable and ideal inventory that ensures enough stock for the received orders ie to maintain an adequate amount of stock, all the while controlling the cost and ensuring a beneficial profit margin. It’s a very elaborate mechanism which starts from the production of the commodity from raw materials and ends when the finished product reached the customer’s shelves.

The Importance of Inventory Management

Inventory management is considered a cornerstone for the success of a small-scale or medium-scale business because with an elegant strategy in place a proper investment management plan can actually reap benefits that might overtake giant companies themselves. Hence every company relies on strategising the most effective plan to manage their inventory. Lack of proper Inventory Management can throw your company into peril as it could lead to some devastating scenarios as follows:

• Loss of profit when too much inventory gets sold
• Can lead to disruption of sales causing potential damage to the company’s reputation
• Poor management can lead to displeased and angry customers who will seek out your competitors which will lead to a loss in business.
• Delayed Shipments
• Stockouts and Spoilage
• Capital getting stuck on products that ran out of demand
• Sunken cost due to wasted inventory

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Inventory management does a marvellous job of tackling all these threats and reaping benefits that put you leaps and bounds ahead of your competitors. With an appropriate and sophisticated plan of action for investment management one can ensure:

• Increased productivity:  Productivity of the SMB is increased marginally as capable management software allows the operations and work in the warehouse to be completed quickly
• Reduced Costs: Through precise projections of demand and order using the software the company can manage the inventory with a fresh stock of the right amount
• Happy Customers: With an efficient system in place the business will be able to provide the customer with quality products n time boosting the customer’s satisfaction
• Less Waste and Theft: Proper awareness of the amount of stock will aid you in knowing what to sell and how much to sell so that they won’t be expired
• Improved efficiency: Proper management guarantees the seamless flow of stock making the whole process fluid and revitalises your SMB
• Better cash Flow: The strategy will also assist you in finding prospects for freeing up capital for other marketing cavities that will help you improve your SMB
• Eliminate errors: Mechanised checking of stock saves you a lot of time and helps in preventing human errors while keeping track of stock

Choosing the right Software for your Inventory Management

 When it comes to choosing software for the Inventory management of your SMB it is only customary that you first dwell on the problems you are facing in doing so. One should try to choose the most adequate software that would address all the current and possible problems that may arise in the future when it comes to inventory management. Another important aspect to keep in mind is the kind of stock and inventor you are managing. The current market is flooded with various software and it is very often seen that they all specialise in one certain aspect of inventory management. So choose the one which addresses the most crucial part of your kind of inventory.

Yet another factor of preponderant importance is the kind of SMB you are and who will be using the software. This can be broadly seen by understanding the perspectives of Business to Customer(B2C) companies and Business to Business(B2B) companies. One thing that is common for both is that the software should be able to aid them with multi-channel management. This also helps in avoiding overselling. This simply means that the software should assist them in managing their inventory on various platforms at the same time. For B2C companies the most preponderant part is to fluidly process and manage real-time data from sales in marketplaces, physical stores and a native website to ensure consumers get what they want when they expect to get it. Therefore installing an Application Programming Interface(API) that vividly depicts Point Of Sale(POI) is their primary step. So they would seek software that would effortlessly make this happen. For a B2B company, the aspect of paramount importance is the seamless management of the multi-channel environment.

Upon targeting these factors it becomes trivial that the software is expected to integrate various other aspects of the business and inventory management along with its nuances so that there is an impeccable connection between inventory management with back-office financial systems enabling real-time visibility for stating inventory accurately in financial reports and it rejuvenates the forecasting capabilities.

The ideal modern inventory management software is expected to be completely automated, ensures flawless multi-channel management, and is accessible, intuitive and secure to use and handle from anywhere across the globe. 

Maintaining the efficiency of Inventory Management?

The introduction of cloud-based inventory systems revolutionised the Inventory Management sector to a marvellous degree. This ensures a secure and reliable system for adequate inventory management. An efficient software can have a significant impact on SMB and this impact can be broadly analysed in three ways

• MOVING ON FROM A PEN-AND-PAPER SYSTEM

Digitalising the records of inventory management through installing completely automated software shall surely make the process much more fluid and mobile. According to the State of Small Business Report, 46% of SMBs either use a manual system to track their inventory or do not monitor their inventory at all. And this is exactly why many of them are falling behind in their margins of profit. Digitilaising such mundane and vapid tasks also assist in making Inventory management an effortless task and the labour can be used elsewhere in the process for better productivity.

 ELIMINATING INVENTORY SHRINKAGE AND THEFT

A manual inventory system often leads to shrinkage and theft of stock. This is completely expunged through computerising the process. The National Retail Federation 2018 Retail Security Survey ranks shoplifting or external theft (35.7%) and employee or internal theft (33.2%) as the two leading sources of inventory shrinkage. This grave issue is flawlessly tackled by the software

• PREVENTING OVERSELLING AND UNDERSELLING

Efficiency can be boosted and the cost of production can be cut to a good degree by implementing some very basic methods. This helps in maintaining the overall efficiency of your inventory management. Some of them are:

• Order Products in Bulk: Helps in reducing Shipping Costs
• Consider just-in-time (JIT) inventory:JIT refers to a fulfilment strategy where the stock is ordered and sold simultaneously just in time to ship. This minimizes the storage cost and dead stock.  This keeps the on-hand inventory at a minimum.
• Consider dropshipping: Dropshipping corresponds to a management strategy where the supplier ships the order on your behalf eliminating the handling and storage cost for you.
• Accept pre-orders:Helps in building hype for your product and also aids you in studying the market and demand for the product

The Various Techniques to implement an efficient strategy for Inventory Management

So far we have elaborately discussed the various perspective of Inventory Management and why it is so pivotal in successfully running an SMB. It is vital for us to also grasp the awareness of the various techniques of inventory management as well. Some of the very basic and widely known techniques are as follows:

The Barcode System

In this system, a Barcode is given to all products which acts as a unique signature to it throughout the process of inventory management. KIt helps in speeding up the process and keeping a clear track of the product and its whereabouts in the procedure.

RFID Tracking

This is a more advanced method f tracking the product using microchips. The chip stores all the important information regarding the product and is more convenient as it makes the process more automated and simple when it comes to processing them in the warehouses. The RFID tracking system is the most adequate for tracking large volumes of products. An RFID system ensures impeccable efficiency as there will be lesser and your staff will be more efficient in processing orders.

Economic Order Quantity (EOQ) Reordering

This mechanism is centred around the theme of reducing inventory costs and making them as minimum as possible. EOQ reordering aids one in determining the best time for reordering to minimize your overall inventory costs (product ordering costs and inventory holding costs).

With the EOQ method, you can calculate how much inventory to reorder so that you do not end up paying more storage fees than you need to.

The ABC Method

This is one of the most common and widely used inventory management techniques. T categorises stocks into three kinds A, B and C. This assists them in prioritising their product concerning which can bring more profit. The categories are:

Category A: Most valuable products of the SMB contributing to 70-80% of company revenue. One must make sure to have enough stock of this commodity.

Category B: Products that are considered very important but not as valuable as Category Ac

Category C: Least valuable products but they still play a pivotal role in the company’s profit.

The product shifts between these categories according to the prevailing demand and cost and this should be done through regular analysis of the market.

FIFO and LIFO Method

FIFO stands for the first-in, first-out method of inventory control. This aims to sell the oldest stock as soon as possible to bring in fresher stocks and avoid old products from piling and hence prevent the loss that can be caused by piling up of old expired products.

On the other hand, the LIFO or Last-in, First-Out method targets selling the newest inventory is sold first. This assists in prohibiting the products from becoming obsolete.