The Psychology Of Impulse Buying

The Psychology of Impulse buying and how to avoid it  

As we approach the festive season, it’s time to start thinking about our Christmas spending/ budget. But surely, that limited edition scented candle won’t cost too much? Or that dress? Go on then, it is on sale after all…

Whether you realise it or not, we have all experienced impulse buying at some point in our lives, but for those who cannot ditch the habit, it can have a monumental impact on their finances. According to a recent survey by finder, 78.2% of British adults have succumbed to the temptation of impulse buying, racking in a colossal bill of £1.06 billion every single year. An impulse purchase is something you didn’t plan on buying, and whilst most of us only do it occasionally, 7.1% of impulsive online shoppers have admitted to unnecessarily spending every single day.

With debt on the rise and more people struggling with money as a result of the coronavirus pandemic, how can you understand your shopping habits enough to stop impulse purchasing?

The Gruen Effect

Australian architect, Victor Gruen is considered as the first creator of the first indoor, climate-controlled shopping mall in 1956. But interestingly, the psychological phenomenon born from his creative layouts changed consumer shopping forever.

Also known as the ‘Gruen Transfer’, it describes the moment consumers enter a shopping mall/ store and are intentionally surrounded by a confusing layout. This forces them to lose track of their original intentions, making them more susceptible to impulse buying.

Price: Retailers and marketers can encourage impulse buying, by simply lowering their prices and offering discounts. Naturally, this increases the perceived value of the product and is more likely to be sold.

Ambiance: Believe it or not, visual and sensory stimuli in stores and online can enhance the visual appeal and trigger impulse purchases. Simply lighting a scented candle or improving a website layout could increase sales.

Merchandise: Unique, unusual or limited-edition merchandise is another stimulant for impulses buyers.

Store Layouts: Stores that force shoppers to walk past a wide selection of products can encourage spontaneous purchases. One of the most obvious examples of this is IKEA.

Despite the decline in malls, this concept is still exploited by modern-day retailers, both in stores and online. But what can you do to resist temptation and supress the need to buy impulsively?

The link between impulse buying and personality

We’ve all heard the expression, ‘retail therapy’ and I dare say at some point, we’ve all succumbed to the temptation of buying to boost our mood. But scientifically, individuals are more likely to spend impulsively if they:

• Are extroverted- because conscientious people and those who need control in their lives are far less likely to buy without reason
• Are social and status conscious- and therefore purchase items to impress others
• Have difficulty controlling their emotions or suffer from anxiety– making it harder to resist spur-of-the-moment purchases
• Experience less happiness- and buy things to improve their moods
• Are naturally spontaneous- and therefore struggle to consider the potential, long-term impact a purchase could have (e.g. on finances)
• Feel unfulfilled- because buying something could help them feel ‘complete’

How to avoid it

Ultimately, the best way to avoid impulse buying is by identifying your triggers. Similarly, dealing with anxiety or finding ways to control unhappiness could reduce the urge to seek fulfilment through shopping. However, these factors can be difficult to address so in the meantime, here are some other tips to help you curb unnecessary spending.

1. Calculate how much you would have to work to buy a product

Sometimes, you just need to put some things into perspective. Whilst it may be tempting to buy a designer handbag or new Xbox, how many days would you have to work to actually pay off this item? Calculating this could encourage restraint, because too often than not, making an emotional connection with a product can cancel out the price.

2. Make a shopping list and stick to it

This is old-school, but it’s still relevant. Making a list is one of the easiest ways to avoid impulse buying and can be used anywhere from a clothes store to a supermarket.

If you’d like to learn more about how to budget, follow this link https://www.financialwellnessgroup.co.uk/blog/uk-budgeting-tools-2020/

3. If you’re feeling down, find something else to lift your mood

Unless you have an obscene amount of money in the bank, spending to improve your mood isn’t a long-term solution and could increase your chances of falling into debt. Start a new hobby, exercise, cook or read a book- anything that will increase your serotonin levels and stop you from spending.

To find out how you could boost your serotonin, follow the link: https://www.healthline.com/health/how-to-increase-serotonin#takeaway

4. If you’re going to spend money, do it in moderation

Money is there to be enjoyed, so restricting yourself completely could simply prolong a gigantic splurge. If you know yourself well enough to know you’ll never fully curve this habit, continue to treat yourself, but in moderation. Rather than spending £100 on a pair of shoes you want (but don’t need), shop elsewhere for a cheaper alternative or wait a few months till you have saved the money.

5. Leave your debit card at home

If you’re heading to the supermarket and know how much you’ll be spending, take the cash you need and leave the rest at home. That way, you can’t impulse buy, even if you want to.

6. Don’t shop when you’re emotional

This is easier said than done, but shopping when you’re emotional should be avoided at all costs. As we have discussed, ‘retail therapy’ is a dangerous hobby to fall into and could be detrimental to your financial wellness. If you can, wait a day or two before shopping and find your pick-me-up elsewhere.

7. Block shopping sites on your computer

We’re all guilty of the occasional online ‘window shop’ to pass the time, but is it really as innocent as it sounds? Absolutely not- shopping online to curb boredom can lead to more than just a casual browse. In fact, you may end up spending money on things you don’t need, just because you can. If you’re committed to reducing your impulse spending, try blocking some of your favourite online stores, even if it’s just for the day.

8. Create a savings account

Spending can certainly induce positive feelings, but so can a growing bank balance. If you ever feel tempted to buy something on a whim, practice self-control and transfer that money into a savings account. Not only will you be surprised to see how much you’ve saved by the end of the month, but it might encourage you to keep saving.