Gotta Have It!

Impulse By Design

Jim Daniels is one online merchant who has succeeded with this technique. Daniels, 36-year-old president and founder of Smithfield, Rhode Island, JDD Publishing, a publisher of Internet marketing books, services and software, says that when he began offering daily sale items on his main page, impulse buyers took advantage of them. "My orders increased immediately," he says. "Most of these impulse buyers are first-time visitors and first-time buyers at my site. And these are usually the hardest eggs to crack. The fact is, lots of people just can't pass up a sale."

Marc Malaga, founder of Gift-Baskets.com, a Web site that provides gift and food baskets, flowers and unique gift ideas for any occasion, also uses techniques to encourage impulse buying. For example, Malaga, 34, says his site's "Gift Emergency Center"-which is displayed front and center on the home page and allows customers to purchase gift baskets and have them sent the same or next day-encourages impulse buying. "People might be coming to the site for one thing, and then they see that they can send something the same day or next day, so they may choose to buy it," he says.

Another technique Malaga relies on is highlighting new, featured or best-selling gift baskets on his home page. This way, he says, "they may see a gift basket on the site they weren't even thinking about buying and buy that one as well [as what they originally planned to buy]."

But in addition to designing your Web site to facilitate impulse buying, there are a number of interesting technologies you can experiment with to help push visitors toward purchasing on impulse. E-mail marketing systems, for example, are a great way to persuade visitors to make these kinds of purchases because they take a variety of products off the virtual shelf and put them in front of your customers' noses in the context of an e-mail message. Malaga, for one, often sends e-mail messages promoting specific products, and to make orders even more enticing, he adds special promotions for customers who purchase immediately. For example, he may send out Val-entine's Day-themed e-mail that allows his customers to get 10 percent discounts on orders they place before a particular day. "This is a form of impulse buying because the customers may or may not be thinking about buying gifts for Valentine's Day, but since they are given the option to buy something [within] a certain period of time, they often do," he explains. Malaga says that, in general, this type of e-mail promotion brings a 3 percent return rate.

New transaction-enabled e-mail technology also allows you to close the sale from within the e-mail. Cybuy, a New York City B2B services provider, is one company offering this kind of product; it lets customers buy without having to click to a different page and complete a lengthy checkout process. Although helpful, the cost is somewhat steep: Cybuy says you can set up a transaction-enabled campaign with any of its e-mail deployment partners-e2 Communications, 24/7 Media or L90-for between $2,650 and $4,500, which includes a one-time setup fee. After that, expect to pay fees of $5 to $10 per thousand e-mail messages deployed.

Later this year, Cybuy will also announce a contextual selling service that enables customers to immediately purchase products they read about in editorial content on your site. For example, if they're reading a record review, the album being reviewed can be transaction-enabled and highlighted so that when they click on the highlighted album name, they can seamlessly and automatically purchase it.

You can also use online marketing systems that monitor what type of people are viewing your home page, allowing you to create a Web page that appeals to that specific demographic group. Using such quantitative statistics, you'll be able to improve the amount of impulse buying that takes place on your site. One company that specializes in this type of technology is Angara in Mountain View, California; its system starts at about $7,500 per month.

In the future, you may be able to experiment with data-mining systems that allow you to collect and track customers' purchasing behaviors in real time. With that information in hand, you can then make offers to specific customers that are relevant only to them while they're on your site. Chances are, that will increase the probability that they'll buy a product from you impulsively. In the future, you may even be able to use this technology to create a customized checkout counter that offers up products relevant to your consumers based on their purchase histories.

In order for data mining to work, however, it must be linked to a customer database. Once the links are in place, testing has to be performed to allow you to decide what to offer any given visitor at any one time. As a result, the technology is very complicated and time-consuming to implement and, not surprisingly, pretty expensive. But that may change. "These technologies are a bit cost-prohibitive for entrepreneurs right now," says Stevens. "But in the technology world, prices do come down. So if you see something that looks interesting to you at the higher level, you should explore it, because you can be sure that, in six to 18 months, it will be made available at a more reasonable price."


Melissa Campanelli is a writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.


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Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.

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This article was originally published in the April 2001 print edition of Entrepreneur with the headline: Gotta Have It!.

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