Impulse buying behaviour picks up online – Industry News

Amita Desai, a 25-year-old finance professional, has just placed her grocery order on a popular q-commerce platform. She receives a message on her phone indicating that her order will arrive in 30 minutes. As she reviews her order details one last time, she notices a message promoting a new brand of scrub sponge that promises superior cleaning. Finding the product and pricing attractive, she quickly adds the item to her shopping cart.

Desai’s last-minute purchase was unplanned, driven by the product, pricing and clever ad placement on her order page. This is the online world of impulse buying, which today contributes nearly 30% of the average order value (AOV) for q-commerce platforms, according to industry players, experts and consultancies such as Deloitte, which has studied this space closely. Five years ago, impulse purchases accounted for around 5-7% of AOV, Deloitte says, implying a sales jump of about five-six times now.

On e-commerce and specialty retail websites such as home decor, furnishings and cosmetics, impulse purchases are around 15-20% of AOV, according to experts. But this number could rise to around 25-30% of AOV in the future as online players shift their focus from customer acquisition to customer retention and profitability.

“The trend of impulse buying is as prevalent online as it is offline. In fact, it is quite effective online due to the use of artificial intelligence (AI) and machine learning,” says Anand Ramanathan, partner and leader, consumer products and retail sector, South Asia, Deloitte.Retailers today, he says, can predict what a consumer may like or dislike based on their buying history and shopping or scrolling behaviour online.

“This could trigger a call to action by the retailer, resulting in a last-minute purchase or an unplanned addition to the shopping basket,” Ramanathan explains.Better data analytics and predictive tools are ensuring that recommendations and suggested prompts by online players are becoming sharper by the day. However, some experts believe that e-tailers, especially q-commerce majors, are looking to optimise delivery costs as the focus on unit economics grows.

“Impulse buying online has been fuelled by the convenience and promise of fulfillment by e-commerce and q-commerce players. The trend is also a function of optimizing inventory and delivery costs,” says Shashank Randev, founder, 100X.VC, a venture capital firm.India’s e-commerce market is expected to cross $160 billion by 2028 from $70 billion now, according to a Bain report, as online shopping booms, notably in tier-II and III markets. To capitalise on this opportunity, q-commerce players are expanding their dark-store network beyond metros and tier-I cities, while e-commerce players are aggressively penetrating Bharat with more fulfillment centers and warehouses, says Randev. This is pushing players to increase their average order values, he adds.

For instance, e-commerce websites such as Amazon and Flipkart, beauty retailers like Nykaa nd q-commerce majors such as Zepto, Blinkit and Swiggy Instamart routinely remind consumers of their best-selling products on their app or website; direct consumers to similar products and categories based on the customer’s last purchase or browsing history; and place notifications strategically on the order page or near the check-out tab indicating a flash sale or unique product with good discounts.

Furniture retailer Ikea, for example, has seen impulse purchases grow within its limited-edition home décor and home furnishings collections, says Bhavana Jaiswal, country e-commerce head for Ikea India. When the price is affordable, the design and aesthetics are appealing, or the product is not available elsewhere, impulse buys increase.

“There could be multiple reasons for impulse buying,” Jaiswal says. “Consumers may not want to miss out on a limited-edition opportunity, or the inspirational imagery on our app or website could trigger a purchase.”For instance, consumers may be looking for dry food jars but might also end up buying a tealight holder or a milk frother as add-ons on the Ikea platform, Jaiswal says. Sometimes, consumers are drawn to the quick delivery option on the website or app, prompting both planned and unplanned purchases. Customers may also feel reassured by the 90-day return policy, which can trigger a purchase, she adds.