Factors Influencing Impulse Buying During an Online Purchase Transaction

Abstract

An important element in retailing is the use of impulse purchases; generally small items that are bought by consumers on the spur of the moment. By some estimates, impulse purchases make up approximately 50 percent of all spending by consumers. While impulse purchases have been studied in the brick-and-mortar retail environment, they have not been researched in the online retail environment. With e-commerce growing rapidly and approaching $20 billion per year in the Canadian and US markets, this is an important unexplored area. Using real purchasing behaviour from visitors to the Reunion website of Huntsville High School in Ontario Canada, I explored factors that influence the likelihood of an impulse purchase in an online retail environment. Consistent with diminishing sensitivity (mental accounting and the psychophysics of pricing), the results indicate that the likelihood of a consumer purchasing the impulse item increases with the total amount spent on other items. The results also show that presenting the offer in a popup is a more effective location and presentation mode than embedding the offer into the checkout page and increases the likelihood of the consumer making an impulse purchase. In addition, the results confirm that providing a reason to purchase by linking a $1 donation for a charity to the impulse item increases the frequency of the impulse purchase.