What if the equipment you use to keep food warm could also heat up sales? Display cases and merchandisers have long been utilized to keep hot foods at optimal temperatures in every type of food and beverage operation. With the application of a little psychology and strategy, those same display cases and merchandisers can also be used to increase impulse sales. According to a survey by a worldwide leader in data analytics, Kantar Group, 79% of participants make in-store impulse purchases. This is an astounding number that should not be overlooked. Foodservice operations have long been aware of the concept of impulse purchasing. However, this study quantifies it and suggests that it is a stream of revenue that should not be ignored.
The psychology of impulse buying
Before delving into the strategies to increase impulse sales with display cases and merchandisers, it is important to understand the psychology behind the buying impulse. A groundbreaking study in 1987 by Professor of Clinical Marketing, Dennis W. Rook, at the University of Southern California first identified the impulse buying phenomenon as, “when a consumer experiences a sudden, often powerful and persistent urge to buy something immediately. The impulse to buy is hedonically complex, may stimulate emotional conflict, and is prone to occur with diminished regard for its consequences.”
Ever since the concept of impulse buying was defined, a number of fields of study have expanded upon it. Economists, behavioral psychologists and marketing specialists have devoted tests and studies to the phenomenon for the past three decades, and generally agree that people can be prompted to make an impulse purchase one of four ways.
- Loss aversion is when an individual wants to avoid feeling bad in the future. Loss aversion plays on a natural tendency to prefer avoiding losses to acquiring gains. This can be sparked by the psychological need to not lose out on a deal.
- Urgency appeals to the human sense of scarcity. As former hunters and gatherers, people can’t shake the idea of taking care of a perceived need, now. Creating a sense of immediacy can tempt customers to make an unplanned decision to buy.
- Greed is closely connected to the Jones Effect. The Jones Effect is the idea that people make decisions based on what others around them have or are doing. People don’t want to be left behind, so they are motivated to purchase in order to keep up with everybody else.
- Indifference is textbook reverse psychology. If the seller can resist acting desperate for a sale, a buyer may be intrigued. A best in class description or a citation of an award can be enough to entice the buyer into wanting to be part of the prestige. It is akin to playing hard to get.
The rule of three
There is a misleading assumption that more choices is a good thing. But more isn’t always better. Many studies support the notion that people have difficulty making decisions when presented with too many options. This sensation is known as choice overload. Marketing psychologists generally agree that three options are a good rule of thumb. This number satisfies the need for variety without venturing into the territory of clutter or choice overload. You don’t want the purchaser thinking too long or hard about making an impulse purchase. Resist the urge to overwhelm potential buyers with overactive display cases and merchandisers.
The four p’s: product, presentation, placement and promotion
Now that you have narrowed the focus of your offerings, it is critical to employ these display case and merchandiser strategies to make the most of customer psychology.
- Product. Whatever products you display should go hand-in-hand with one another. This setup encourages cross-selling and ensures the display looks cohesive. When products follow the same theme, or one is a natural accessory to the other, this promotes the sale of both. This means putting deserts after mains. This could also mean putting similar genres of food near one another.
- Presentation. The attractiveness of a display case or merchandiser is critical in attracting impulse sales. Are items displayed in an orderly fashion? Is the display case at the proper temperature? Is the merchandiser kept clean? Can the buyer see everything clearly? Does the “look” of the merchandiser match the vibe of the store? Details matter.
- Placement. A counter display is an effective means to grab customers’ attention right before they are about to check out. The check-out aisle itself can force customers to pass by merchandisers. A post-COVID world has automated lots of retail transactions but that shouldn’t stop you from putting goods in front of customers whenever you can. This includes customer pick-up points.
- Promotion. Deal promotion is a great way to tap into people motivated by loss aversion. People often buy on impulse because they’re worried they will miss out (we’ve all been there!). Signage such as “Lunch special” or “Today only” may be just the right nudge a person needs to make that purchase. Limited-run items or seasonal foods can also increase urgency.
The five senses
Shoppers are influenced by sensory impressions. One reason why brick-and-mortar retail stores continue to exist is because customers still derive value and entertainment from shopping in person. In a non-food retail setting, lots of focus is given by the seller on sight, sound and touch. However, in foodservice, the seller can also appeal to a buyer’s sense of smell. These four factors lead the customer to satisfy his or her fifth sense: taste.
- Sight. This is the most obvious appeal of display cases and merchandisers. Attention-grabbing colors or tried and true strategies can influence foodservice sales. Red appeals to appetite. Green signifies health and vitality. There is an entire field of study dedicated to food color connotations.
- Sound. Music can be used to complement your offerings. Music can also be utilized to uplift your customers' spirits and put them in an impulse shopping mood.
- Touch. Interactive display cases and merchandisers encourage customers to engage with your offerings and brand on a deeper level.
- Smell. This is where food separates itself from traditional retail merchandisers and display cases. Does your food smell good? Olfactory receptors are the closest thing to triggering that fifth sense — taste!
Knowledge is power.
There is a direct correlation between the psychology of a customer and impulse sales. Understanding how those impulse sales come to be is a critical step toward harnessing the power of how items are presented in order to increase revenue.
If you want to increase impulse purchases at your food operation, Hatco can help with an array of display cases and merchandisers.