Mobile And Impulse Purchases: Perfect Together

Like any key technology change, mobile retail threatens a wide range of unanticipated consequences. A sharp increase in—or at least a radically different approach to—impulse purchases is almost certain.

StorefrontBacktalk columnist, and Yankee Group senior analyst, Nick Holland this week has a very articulate alternative view, where he sees mobile sharply curtailing or even eventually eliminating impulse purchases. Nick makes some excellent points. But I believe the human nature strength of impulse purchases, along with some of the technical nature of mobile features, makes an increase more likely. Please read both columns and then decide for yourself that I'm right.

The unintended consequence is a time-honored tech tradition. My personal favorite was a trend first spotted a few years ago by The IHL Group, and it happened to also involve impulse purchases.

IHL noticed that as self-checkout deployments in grocery stores started to soar, impulse purchases plummeted. The reason was simple: Consumers were so focused on trying to handle their own scanning and tendering that they didn't have time to flip through magazines and be attracted to candy and gum.

Self-checkout, of course, didn't kill impulse purchases. Grocers wouldn't let it. The merchants simply moved those impulse items to other places where the consumers weren't so distracted.

Much the same will happen with mobile. The argument that mobile will reduce impulse purchases has multiple layers—and Nick does a better job than I at explaining it—but a key point is that mobile will greatly facilitate comparison shopping, online research and other data-rich activities that are the natural enemy of emotional impulse purchases.

Although that's certainly true, it won't make a dent. Impulse purchases are indeed emotional, and rationality does not come nearly as naturally. For every in-aisle price- and feature-comparison that an Android or iPhone enables, there will be 20 purchases in the heat of the moment. And those impulse purchases will be enabled by mobile.

Consider a movie whose star is wearing a really cute sweater or using an especially intriguing gadget. In the lobby seconds after the closing credits start to roll, consumers will be able to find and buy those items.

That in-the-heat-of-the-moment urge to buy may have easily calmed long before the consumer gets home to a laptop. But the always-on mobile device will—for the first time—enable such emotional instant buys.

Or consider sitting in a subway car when you see someone laughing out loud at a book. You catch the title, do a quick search on Amazon, download the e-book version (or, for you dead tree fans, have it delivered to your house tomorrow) and you're actually reading that same book while you're still five stops away from your home station. That's another impulse purchase that simply couldn't have happened without a mobile device.

But what about in-store? Much depends on the nature of the product. The mobile-will-kill-impulse-purchases folk will point to the tactile and immediacy elements of touching and bringing home in-store products.

That's true for some items, but not true for others. That's true for some items, but not true for others. It's true for clothing, games and small electronics. But what about one of this season's hottest products: HDTVs?

You go into a store, compare screen resolution and decide that you want the one on the second shelf, fourth from the right. You now have to flag down an associate (good luck!), get it brought out from the back, wait in line to pay for it, wait in line for it to be placed in your car, drive it home (avoiding bumps) and then somehow lug it inside.

Or you could whip out your mobile device, order it online at any place that waives shipping charges (very easy to find these days) and walk out of the store. Tomorrow or the next day, some FedEx employee will lug it into your front door. You might have not closed that deal in-store, but mobile makes it so much easier, you just might. Hello impulse. The store creates the impulse, but the phone allows you to easily consummate the purchase.

Getting back to the research-reduces-impulse-purchases argument, human nature says different. For people who enjoy the act of shopping, stopping for research can be a killjoy. (Retailers love these consumers.) The fact that they have the Encyclopedia Britannica of product research in their pockets won't change that.

Check-in and other geolocation and geofencing services also will sharply increase impulse purchases of a different kind. These are the discovery kind of impulses, where a text message will promote a 40 percent off sale for the next 20 minutes. Yes, indeed, that's 40 percent off something you never really wanted—but at such a bargain, why not get two?

Some chains have been discussing the idea of linking mobile to CRM databases. This approach would allow someone to scan an item and then get instant promotions on related items.

Mobile has yet another pro-impulse-purchase aspect. Because of its small screen and keyboard, mobile sites and applications have had to prioritize ease-of-use much more than traditional Web sites. That means there will be better memorization—either on the mobile device itself or stored on a retailer's server—of address and payment card data.

Not so ironically, that fact will fuel much faster transactions on a mobile device compared with a desktop device and much faster transactions versus waiting in line for an associate and a stationary POS. (If the associate is using a line-busting mobile POS, that's cheating, as The Gap is now doing, along with Home Depot.)

In other words, for every impulse purchase that mobile research kills, it will enable 10 new ones.

I'm not at all worried about the highly profitable impulse purchases going away because of mobile. As long as humans are emotional and impressionable shoppers, those impulse margins are quite safe.