Unraveling the Concept of Impulse Purchases

Series 2: Episode 3 | 24 January 2023

Show notes | Transcript

When you do a survey or ask a customer in a very generic way, “Why did you buy this?” and they say, “On impulse,” that’s just a way to shut you down.

On today’s episode of the Circuit Breaker Show, Bob and Greg unravel impulse buys. They talk about the classic mattress, the interview with Brian Walker where he explains why buying a mattress was an impulse buy for him. This topic is covered in more detail in Competing Against Luck and Demand Side Sales 101. From a business perspective, you will see why classifying your products as impulse buys is a bad idea: It’s a form of laziness. Greg will use an analogy to show how quickly people can make decisions.

You’ll learn why you should not stop when you hear the word “impulse buy”. It’s time to dig deeper and your job is to help people remember why. Greg will explain if Bob is an impulse buyer. You will also find out why Bob bought the rare Ohio State University medal as well as all of their efforts to get Bob to minimize his purchases. You will understand why people use shopping websites.

Join us for this thought-provoking discussion.

Enjoy!

What You’ll Learn in this Show:

  • Is there such a thing as an impulse buy?
  • Why classifying your product as an impulse purchase is a form of laziness.
  • How quickly humans can make decisions.
  • The two main categories with impulse buying
  • Why irrational becomes rational with context.
  • And so much more…

Hosts

Unraveling the Concept of Impulse Purchases – transcript

Greg Engle
When you do a survey or you ask a customer in a very generic way, why did you buy that? And they say, impulse. That’s just a way to shut you down as an interviewer because they don’t know, they haven’t thought about it, they haven’t spent the time thinking about something that was like that.

And that’s a way that consumers get us to stop asking them questions when they don’t think they have the answers. But what we know is if you ask the right questions, they have the answers. You have to ask questions, and you need to put them in situations where they can remember.

Bob Moesta
Welcome to the circuit breaker podcast where we challenge the status quo of innovation and new product development. We’ll talk about tools and skills and methodologies used to build better products and make you a better consumer. I’m Bob Moesta, the co-founder of the rewired group, I’m one of your co-hosts and we’re joined by Greg Engel, who is my co-founder and chief Bob interpreter. Join us as we trip the circuit, and give you time to reset, reorganize and recharge your brain to build better products.

This is Bob, this podcast that we’re doing today is around impulse purchase. Greg and I get into it, we almost unravel it to the elements of what it’s about. We talk through several examples, the classic mattress example as well. But also, things like how do you pick drinks? And how do you pick the gum to chew? Things that you think are impulse are not. Enjoy the ride and look forward to the assignment.

Greg Engle
Today we want to talk about a subject we’ve been getting a lot lately, it’s something that’s near and dear to your heart, because you’ve harped on it for the 15 years I’ve known you. I know it’s something that you’re going to have a lot of opinions on, it’s a word that people often use, which is impulse buy. I just picked it up, it was just an impulse, I don’t know why I did it. Is there is there such a thing of impulse buy?

Bob Moesta
So the way I see it is there’s two perspectives on it. 1 – As a consumer, I didn’t connect the dots. But if you take a step back and investigate the situation and understand the moment and how fast they think about it, the reality is; No, that’s not an impulse buy. So you realize that we go through space and time and we go through life just in the moment. There are multiple reasons why people say impulse, but most of the time it’s because I didn’t plan to buy it, and I bought it, so, it’s an impulse. When you take a step back and say, why now? why this? But what would make this the right context? You start to realize it’s something that the sun, the moon, and the stars aligned for that thing to find a way into the life. 

Greg Engle
I often say it this way, we make decisions so fast, we’ve been programmed to make decisions. fast, there’s reflex in our bodies, in a lot of things we do, in our mind it’s no different, our decision making is no different. As we get better at decision making, we speed these things up to where we can’t tell somebody else why we did something, we often label that as impulse buy. There’s a ton of stuff we buy without a plan, and not all the time are they labeled impulse. Impulse is usually labeled things that we can’t explain why and they’re generally in a category of things, which is low cost, low threat of failure, is where most people put impulse.

Bob Moesta
A pack of gum is impulse.

Greg Engle
A lot of times they think that but when you talk to people about a pack of gum, you can slow them down, there’s real reasons why they buy. There’s jobs to be done of why we buy gum, it’s just a low barrier so going through your decision making very quick is very easy to do. 

Bob Moesta
I would say is a very low cognitive load, it’s something you just don’t even think about, like ‘I need more gum, and it’s there. 

Greg Engle
But then there’s another time we use impulse buy, the most famous one from the rewired perspective is the mattress interview; he person said that was an impulse buy. It’s in multiple books, if you don’t know we’re talking about you can find it at competing against luck and in demand side sales as well. But the reason why I bring that up is because as an industry, we usually don’t think of mattress being an impulse buy. Because people don’t usually use that word. Why did Brian use the word impulse? 

Bob Moesta
Yeah, so Brian’s buying story is, he says, ‘I bought a mattress’, I say ‘Okay, tell me about the mattress’. He goes, ‘Well, I totally bought it on an impulse’. ‘When did you buy it?’  ‘I bought it on a Saturday at a Costco’. ‘Saturday at a Costco is crazy, what were you thinking?’ ‘I don’t know but at some point, it was just the right time’. So we dig into this, and as we go through the story it turns out the he hasn’t been able to sleep for almost two years. He’s been thinking about it, he’s been doing things about it, but the things he tried hasn’t worked. Finally, he’s at Costco with his wife and two kids, they get to the point of I’ve got this big meeting coming up, I haven’t been sleeping well, and his wife turns around and goes; if you need it, then let’s get it in. So bam, running outside, getting the orange card, flowing the thing up and taking it home. In his mind he didn’t plan to buy it, it wasn’t on sale, it was a total impulse thing. But the reality is, as you piece the story together, you start to realize that it’s a very different story, because at some point, he’s been creating that space in his brain for a new mattress for almost two years. 

Greg Engle
I think the other thing, if you listen to the interview you also find that, as with most people when they start to be interviewed, they start putting pieces together they actually never thought about because it’s just in their brains. So when you start talking to him about how long has it been since you have had a good night’s sleep? He didn’t realize, he never took the time to say, oh it’s been two years, until you ask. So that’s what I mean about decision making, we get good at making these decisions, we get good at holding all this information in our heads. And a lot of people say well, oh, no impulse buy, the reason is because we’re trying to buy 1000s of things at a time, we have all these thoughts in our heads. But no, it’s that we have all these struggles in our heads and we go through buying decisions every day, we just get good at making this decisions faster and faster, that we don’t even realize we’re doing it. 

Bob Moesta
Yeah. I also have this notion in this memory of Dr. Taguchi and talking about randomness and it’s very similar. Random – If you believe things are random, then you just have to wait for it to happen. In his mind, it was just a waste of time, so part of this is if you think of impulse, and I can’t predict when, we just need to get more people that will impulsively buy. This is a very bad concept from a business perspective to think about it as impulse or random, because at some point in time, it’s then a numbers game and you don’t really understand the value of creating and the moments that make that matter. I think it’s a weakness that we label something on that doesn’t cause us to go deeper, it just causes us to wait, and waiting is one of the deadly sins to me. 

Greg Engle
Well, I think from our perspective, impulse buy is 2 things when people use it; 1, it’s an excuse for people that make product, oh our products are just impulse buy, we don’t have to think about it, or think about why people do things, we’re going to support {GM} out there, and they’re going to buy it when they buy it, or we’re going to put a bag of chips out in the aisle. I don’t want to call it pure laziness, but it’s one form of laziness. It’s one of those things where they can say that, so they don’t have to do more work to do something. 

Bob Moesta
Yeah, I don’t think they’re trying to avoid work because they don’t know how to explain it to a 100%, to a level of perfection, it’s more accurate to say that it is random, because I can’t predict it, as opposed to try to understand the causation behind it. 

Greg Engle
But if you understand jobs, and shopping behavior, and that stuff, and you can triangulate all those things, you can figure it out. It’s very predictable. 

Bob Moesta
It’s way more predictable than people think it is for sure. 

Greg Engle
The other one is when you’re doing interviews or when you do a survey or you ask a customer in a very generic way, why did you buy that? And they say, impulse. That’s just a way to shut you down as an interviewer because they don’t know, they haven’t thought about it, they haven’t spent the time thinking about something that was like that.

And that’s a way that consumers get us to stop asking them questions when they don’t think they have the answers. But what we know is if you ask the right questions, they have the answers. You have to ask questions, and you need to put them in situations where they can remember.

Bob Moesta
My example of this is the home when we were doing homebuilding right and I was interviewing that couple around why they bought a house and, or bought one of our condos. It got to the point where they hired a real estate agent and like, well, it was just the right time. You’re like ‘well tell me some more about it’. 

And by digging into it and getting to, when was it? it happened to be on a Thursday and they were wearing dark clothes, because they just came from a funeral. That notion of setting that all up got them to remember, like, oh, our friend had passed. And we didn’t want to move if one of us had passed, we want to do this beforehand. So it surfaced, they thought it was totally random that they got the real estate agent, but when you lay it out and understood the action, it was very much causal. It’s just they couldn’t explain why. 

Greg Engle
I think that happens a lot to consumers, they run out of words, and if you keep asking them questions, they feel bad. So they have to figure out something to say to get you to stop.

Bob Moesta
You don’t want them to feel bad but a lot of times, they don’t know how to connect those dots, so that’s why unpacking is so important. 

Greg Engle
It’s not an analogy, but something for you to think about how quickly humans can make decisions. So most of our audience is going to be old enough to be able to drive. And when you’re going down the road, you’re making decisions that you don’t even realize you’re making, how fast is another car going? What’s going on? When an emergency happens, it slows down so much for you in the moment, but you still don’t really remember what you’re doing because you’re acting on all these other things, all these decisions that you’ve made in the past, all come together. You experience it whenever you have a close call. Someone cut in front of you, you go to the next lane, Did I really look? Or did I just do it? And then when you slow it down, you watch and you see people do it, they actually look, you do all these things so quick because you’ve had these situations before. And it’s the same thing with buying things. We’ve gotten so good at doing these things, we make decisions so quickly, that we don’t even realize we’re doing it.

Bob Moesta
But this also gets back to the big higher, little higher, which is when we talk about when people do new things, they’re doing things that they’ve always done. The habit things are so deep in their subconscious, that they can’t even explain it. But when people do something new, it’s that anomaly of the new the first time or the new time they do something, that’s when all of this can come to the surface, and we can see it. We call them switching interviews, but it’s this notion of being able to understand when are they firing the old habit and building a new habit. 

Greg Engle
Yeah. But I think that the big thing out of this podcast with the impulse buy is there’s two main categories that we see, which is we make decisions so quickly. And then it’s not a planned purchase, people will use that word for that. And there’s other ways people use the word as well. But the big thing we want, people that are in innovation, in sales, in the types of people that listen to us marketing, when you hear the word impulse buy, that’s not a time to stop. No, it’s a time to dig deeper and your job is to help people remember why. Because as humans, we have this thing in the back of our head of danger and we tend not to do things on a whim, there’s always some rationale behind it. That’s what we say is, when we do interviews you look at the person there’s no way a rational person would make the decision they make. But when you understand everything that happened, it becomes very rational. 

Bob Moesta
That’s right, and the irrational becomes rational with context. 

Greg Engle
That’s one of the things that we want you to hear from this when you’re interviewing people when you’re talking to people, when you hear a word that is a stop word or a deflection word; ‘I’m too tired’, ‘This is too much work’, ‘impulse buy’ any of those types of things that we take as we think we know what people mean by that. But it’s just a word to get us to stop, that’s when you’re supposed to dig in and help people remember, not dig in and question and badger but go at it a different way to figure out what exactly was going on. 

Bob Moesta
So if you were to walk in the office, the first thing you would notice would be oh my shit.

All that stuff I buy that people would say (if you don’t know me) is impulse purchase. 

Greg Engle
Yes, we often joke to say you’re the one that breaks all our theories. Yes, 

Bob Moesta
Can you explain to people why I do what I do? Because I’m not sure I can but at the same time I know you know me well enough to explain it. 

Greg Engle
I think you can. So let’s slow it down. Do you buy things randomly?

Bob Moesta
At one point in time, you would say yes. But no, I do not. 

Greg Engle
Do you go through the timeline and everything you buy? 

Bob Moesta
Yeah, I go through the forces and understand where I am in the timeline. Yes. 

Greg Engle
So the reason why he’s saying all that is because we all have stupid stuff in the office, 

Bob Moesta
The balance board.

Greg Engle
The balance board is actually very easy to explain. We’re getting old and we need to keep our balance, otherwise we’ll we won’t be able to walk anymore But the other day, Catherine and I got a package that was labeled to Bob, everything that comes here is labeled to Bob, but he opened it and it’s a big OSU Ohio State acrylic thing. 

Bob Moesta
No, it’s metal. It’s very rare, it’s a powder coated amazing logo that you put on your wall. 

Greg Engle
But who that works that rewired went to OSU? 

Bob Moesta
No one 

Greg Engle
Who in our office building? 

Bob Moesta
It’s for it’s for Allen. 

Greg Engle
So it’s for somebody that has an office in our building, happens to be our attorney. He went to LSU, how long have you been looking for something to give him that was related to his college experience?

Bob Moesta
Three years, four years, you go into his office, and he’s got the Emory legal stuff, and all these diplomas on the wall. I’m like, we need the Ohio State one because I went to Michigan State and to be honest, it’s that Michigan rivalry thing. It’s one of those things where we need to put that on the wall, that needs to go up there. And he’s like, no, no, no. 

Greg Engle
So it seemed like when Catherine, I would open it, we’re like, Oh, my God, that’s stupid. But when you bought it, it served a couple of different purposes. So there were desired outcomes from it. What were your desired outcomes from that? 

Bob Moesta
One is Alan and I have a very special relationship, he’s a very good friend, it’s one of those things where Ohio State’s ranked number two, and it’s another year and he really likes the Buckeyes. I know that he likes to watch them play, it’s one of those things where he has no Ohio State sweatshirt, he has none of that stuff. 

The other one was that a lot of his clients went to University of Michigan and I feel like he’s hiding the fact that he went to Ohio State, so when they walk into his office it’s like, wait, you went to Ohio State, you’re the enemy. The other purpose was to basically make sure that we at least badger University of Michigan a little bit more. 

Greg Engle
So there’s a reason why you bought it. And you’re looking for that all the time. And that’s the joke we have at the office is Bob’s on Amazon all the time. In fact, we’ve discussed a rule that he can’t buy anything on a day that has the word day in it, so he can’t shop anymore. So we’ve actually tried to do that rule, then we couldn’t do that because it wouldn’t be fair. Then we said, well he can’t buy on Mondays, Wednesdays, Thursdays and Saturdays, and I said, that won’t work because he’ll just put everything in his saved account until the day he can buy. We can’t really beat that one, we deal with what it is. But when you’re going through, you have these things in your head and it might be to you the reason you’re going to Amazon is to break a boredom, it might be to reset your brain, it could be a bunch of different things. But you still have these things in your head of things you might be looking for. 

Bob Moesta
To be honest, it’s one of those things where it’s a struggling moment that I don’t know how to solve. So it’s using Amazon almost as Google Search to say well, I can solve it this way 

Greg Engle
I think that’s BS, because we know the jobs of white people. White people use shopping websites and I know exactly why you use them, you use them when you’re bored, or when you’re waiting for something, then you’re then you’re going through the struggling moments of what can I do. But you’re pulling those things up in times that you need to reset, you use Amazon as a reset for yourself. 

Bob Moesta
Yes, it’s equivalent of playing a game. 

Greg Engle
When you don’t want to put that much thought into it and that goes to impulse buy, there’s more thought into a game than there is to that because you’ve already thought about it. So the decision is actually easier than a game. 

Bob Moesta
It’s that notion of it comes up, so how do I fit this in my life? What is the struggling moment that I would go after, but I have the frame by which to add it. It’s never bought without some level of thinking about it and where it fits and, and how it fits. 

Greg Engle
So that brings us to kind of wrapping up and, and as always, we want to do a little bit of homework in the most basic homework I can give people. The most basic decision we make all the time is when we go to the refrigerator for something to drink. A lot of people will say it’s habit or impulse, but you are thinking through your forces. When you do that, I want you to stop and think about what’s going on? What’s pushing you to a certain thing? What’s pulling you to the one you pick? What are the anxieties about picking that? And what are the habits? what are the things you normally pick? And I want you to realize how fast you go through that decision making. Because that’s really the exercise we want you to do. Impulse is just a word, a placeholder for us going through decisions so quickly. So I want you to just take the time to do that. And then the other exercise, if you are in the innovation space, if you are in the product development space, if you are in the marketing space, and someone uses the word, be a customer, be it somebody on your team, I don’t care who it is they use that word, I want you to start unpacking the word. What do you mean by impulse? 

Bob Moesta
When did it happen? Where did it happen? What else? 

Greg Engle
Well, first what do you mean? Then unpacking the mechanisms to get there. So those are that’s couple things I want you guys to take from this. And then go forward from that and just realize that a lot of times we use the word because we’re just being lazy or we want to deflect and we can’t let people do that. And we can’t let ourselves do that for sure. 

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