Impulse buying behavior online on the rise – Industry News

Amita Desai, a 25-year-old finance professional, had just placed her grocery order on the popular Q-commerce platform when she received a message on her mobile phone informing her that her order would arrive within 30 minutes. Taking one last look at her order, she noticed a message advertising a new brand of scrubbing sponge that promised superior cleaning results. The product and price were appealing, so she quickly added the item to her shopping cart.

Desai's last-minute purchase was unplanned, prompted by the product, price and clever ad placement on the order page — the world of online impulse buying, which today accounts for around 30% of average order value (AOV) on Q-commerce platforms, according to the industry. Players, experts and consultancies that have studied this area closely, such as Deloitte, have conducted studies on impulse buying.According to Deloitte, five years ago, impulse buying accounted for around 5-7% of AOV, which means that sales have increased by around 5-6 times today.

According to experts, impulse buys are around 15-20% of AOV in e-commerce and specialized retail websites like home décor, furniture, cosmetics etc. However, this figure is likely to rise to around 25-30% of AOV in future as online players shift their focus from customer acquisition to customer retention and profitability.

“Impulse buying is as prevalent online as it is offline, and in fact, with the help of artificial intelligence, it can be quite effective online. “AI and machine learning can predict what consumers will like and dislike based on their purchasing history and their online shopping and scrolling behavior,” said Anand Ramanathan, partner and leader, Deloitte's Consumer Goods and Retail South Asia practice.

“This creates a call to action for retailers that can lead to last-minute purchases and unplanned additions to shopping carts,” Ramanathan explains.With improved data analytics and predictive tools, recommendations and suggestion prompts from online players are becoming more targeted by the day.However, some experts believe that with the increased focus on unit economics, e-retailers, especially Q-commerce giants, are looking to optimize delivery costs.

“Online impulse buying has been driven by the promise of convenience and fulfilment of e-commerce and q-commerce. This trend is also driven by optimisation of inventory and delivery costs,” said Shashank Randev, founder of venture capital firm 100X.VC in India.E-commerce market According to a Bain report, the online shopping market is expected to exceed $160 billion by 2028 from the current $70 billion as online shopping is growing rapidly, especially in tier-2 and tier-3 markets. To leverage this opportunity, Q-commerce players are expanding their dark store networks beyond metros and tier-1 cities, and e-commerce players are aggressively expanding into India with more fulfillment centers and warehouses, says Randev. This is encouraging players to increase the average order value, he adds.

For example, e-commerce sites such as Amazon and FlipkartBeauty retailers like Nykaa and Q-commerce giants like Zepto, Blinkit and Swiggy Instamart regularly update consumers about bestselling products on their apps and websites, direct them to similar products and categories based on customers’ last purchase or browsing history, and strategically place notifications on order pages and near checkout tabs highlighting flash sales and highly discounted specials.

For example, furniture retailer IKEA has seen an increase in impulse buys with limited-edition home décor and home furnishing collections, says Bhavana Jaiswal, country e-commerce head, IKEA India. Impulse buys increase when the price is affordable, the design and aesthetics are appealing, or the product is not available anywhere else.

“There can be many reasons for impulse buying,” Jaiswal says. “Consumers may not want to miss out on a limited edition product, or the evocative imagery on the app or website may be what prompts them to make a purchase.” For example, a consumer may be looking for a jar of dry food, but may also purchase an additional tealight holder or milk frother on the IKEA platform, Jaiswal says. Consumers are attracted to the website or app's fast delivery options, which prompt planned and unplanned purchases. Customers also feel reassured by the 90-day return policy, which can also be a trigger to make a purchase, she adds.