Impulse Buying: Its Roots & How To Overcome 3 Main Triggers

If you read this article you may have caught yourself recently putting one thing (or more) in your cart you initially didn’t have on your shopping list. During the last years I learned the hard way that my impulse buying ruined my budget and bank account. I’d love to help you to not get there too. If we understand what the habit of impulse buying truly means for our personal finances over the course of our lifetime and learn how to get out of that cycle, we will be wealthier and happier. And that’s what this blog is all about.

Unfortunately, these kinds of bad spending habits can creep in too easily. They keep us poor for the long run without us even recognizing it. Especially if we never set the goal to break with them so that we can protect our finances. But how can we save that money for more meaningful financial goals? Simply by developing a strong skill set. The good news is that it’s actually super simple. But it‘s not an easy path and we need to look into our past, as a society and as individuals.

In this post, I will tell you about the root cause of impulse shopping from a historical point of view and an emotional one. So, we look at the psychology behind impulse buying and the 3 main emotional triggers. Also, we clear the costs of impulse shopping that will shock you.

Impulse Buying: What It Is & How Much It Costs You

If you make a purchase you didn‘t plan for, it’s an impulse spending. The 2 overall impulses are first convenience. We buy an umbrella because it started to rain on our day trip and we’ve forgotten ours at home. The other impulse is an emotional spending trigger like treating ourselves to something after a hard workweek like a chocolate cake. Both impulse purchases are small, but those add up.

Studies have shown that the average household in North America spends between 150 and over 300 PER MONTH on impulse buying. In Western Europe that‘s less with around 100 monthly or more depending on the data you look at. For an easier calculation we assume an average of 200 each month on impulse buying being 50 per week.

So, we spend 2.400 Euros in one year and 24.000 Euros in 10 years just on impulse purchases. Over a working life of around 40 years, that‘s almost 100.000 just on impulse buying. For stuff that we never intended to buy or simply don‘t need or use. That money could have paid for a world trip or allowing us to retire earlier than planned, especially if investing that money. For most, that will never be the case.

What would happen if you saved that money you would otherwise spend on impulse purchases? You could invest your savings in a high-yield savings account which is a bank account offering at least 2-4% return on your money. Or you could invest your money into the stock market or somewhere else. If you want to know where to safely invest your savings, you can read about the 7 Best Safe Investments for Financial Independence. If you want to run your own numbers you can take advantage of this free (!) Investment Growth Calculator. See what‘s possible for your money if you consistent invest a specific amount.

The History Of Impulse Buying

Window Shopping & One-Click Shopping

Window shopping means to look through a store‘s window at the items being offered without going inside the store. You have no clear intention to buy something but you’re also not averse to do so.

Harry Gordon Selfridge is known as the inventor of the shop window itself in the UK in 1909. Shortly after the First World War took place from 1914. Selfridges’ store in London with its shop window became a war window. It displayed the latest war news and war photographs. People came just to read or see the news. Then, in the 1930s, a boom in creativity for shop windows took place. Artists were hired to create beautiful displays for shop windows to attract people. It worked. But not for sales.

Shop windows were too artistic to create sales back then. That’s how it was until the 1960s. Then, the first stores simply displayed some items being offered in the store. From there, that trend had spread all over until today. But, there is another even more important reason why the rise of window shopping started in the 60s and 70s and accelerated over the following decades. The birth of the credit card and its incredible spread. If you want to know the history behind the creation of consumers check out the last post Creating Consumers: How We All Got Into Debt & Its Real Cost.

However, before Selfridge invention, customers often had to request in a store what they wanted to buy before they could even see the offers. What turned an idea into a revolution was the rise of the middle class in 17th-18th century in Europe. That combination changed how retail stores operate forever. A simple window display established a whole culture around window shopping. That satisfied the craving desire for recreation during leisure time to reap the fruit of one‘s labor, so to say. I talk more about how leisure time was turned into “time to consume” whereas it should initially be “time to relax” in the last post as mentioned on creating consumers. Until today, that idea still holds strong. Even if we browse through an online store nowadays just to see. Who knows what will come after our modern one-click shopping.

The Rise Of Convenience

The picture above perfectly illustrates: Convenience is everywhere in our modern everyday lives. The more we can outsource our lives the easier they seem to become. Let‘s look at the 2 most impactful examples of the rise of convenience nowadays:

1. Food: Our local supermarket has a new area for convenience food. But one new item caught my attention: colored, pre-cooked eggs. I thought who would buy this? Cooking eggs takes 1 minute. When did we lose taking 1 minute? But convenience food is everywhere, not only in the grocery store. Even farmers’ markets do not only sell ingredients anymore. It‘s understandable, as our lives have become so busy that even our way of payment changed into a more convenient way.
2. Cash: My grandmother always paid in cash. For most of her lifetime, she didn‘t even know what a credit card or debit card was. Just a couple of decades later we replaced paying in cash with paying with a credit card or debit card, our phones, Apple Watches, PayPal and so on. It‘s easier and quicker. But that convenience comes with losing the value for our money. Every time I pay in cash, it‘s almost as if my spending becomes realer. I see my wallet getting emptier and feel a greater sense of awareness when it comes to spending my money. For most of us that feeling got lost with the loss of paying with cash which enhances compulsive shopping.

Places Where Most Impulse Purchases Happen

No. 1 in impulse purchases is shopping in an online store. Nice designed and user-friendly websites and especially an easy navigation and simple refund process like it is on Amazon encourages millions of impulse purchases every day! Most impulse shopping happens in our beds on our phone while using social media. Because a whole culture around special offers has evolved we simply cannot resist this form of one-click shopping.

The second place where most impulse purchases happen are in physical stores like the grocery store. Skilled online retailers are often the best advertisers in a store too as the art of product placement is very similar. But in a store, you are exposed to even more enhancing buying conditions like smooth lighting, gentle background music, and friendly staff. All of that encourage us to make those impulse buys. When we can resist until the checkout line, that is the last hurdle most don‘t resist. We see a candy bar and ads seam to be everywhere that can break even the strongest will power.

I‘ll never forget the first time I visited Manhattan in New York City. Of course I wanted to see the Times Square. But as I was from Europe, all the shiny ads and brightly colored stores overwhelmed me so much that I literally had to sit down in quiet after one hour and felt exhausted.

The Root Cause Of Impulse Buying: 3 Emotional Triggers

If we impulse buy we always do it because of our past. The root cause is either from the past of our childhood or our recent past. Some never learned how to handle money well, how to invest money or save money in the first place. Maybe you‘ve learned that the money will always come back, so to say. Or today you just had a hard workday or you‘re simply overworked in general. Now, you want to treat yourself through any kind of convenient product like ordering food. Or it can be that you just want to fit in with your peers, maybe even unconsciously.

Whatever it is that triggers your mind to make an impulse spending, there is always an emotion behind from your past. There are 3 main emotional states and triggers:

1. Instant gratification
2. The lack of self-control
3. The desire for social status

Instant Gratification

The experience of the pleasure you get when impulse buying is very rewarding. It puts you in an elated mood. Simply the feeling of happiness itself strengthens your desire for wanting more of that pleasure next time. Those positive feelings can lead you to make small impulse buys over and over again that can add up to big amounts spent.

When I entered the grocery store and saw a sale I thought I will save money when I buy it to feed my family. „It‘s a limited deal, right?!“ so I felt the urgency to buy that limited-time offer as it was at such a discounted price. The feeling of instant gratification kicked in. However, this happiness did not last very long.

It was a temporary joy and came along with guilt. The guilt that I‘ve lost self-control over my wallet as the purchase wasn‘t planned. The guilt that I‘ve negatively impacted my personal finances and now lacked that money somewhere else. For you it can be that guilt that you add even more to the unused stuff in your home that already overwhelms you. Because once we have that shiny, new thing in our home, it becomes just one more thing. Always wanting new stuff can then lead to dissatisfaction in our lives if it‘s just for the purpose of adding more possessions.

The Lack Of Self-Control

If we lack self-control when it comes to impulse buying we, mostly lack self-control in another area of our life too. That can be uncontrolled shopping habits in general or uncontrolled eating habits as well. You feel a specific urge you cannot name as it is subconscious but you cannot resist that urge. So, you repeat that impulse shopping behavior over and over again. It‘s almost as your will power is turned off. If you‘re not the type of person who generally practices self-control or simply acts disciplined in daily life, maybe that is your root cause of impulse buying.

The Desire For Social Status

If you have an intrinsic desire to achieve a high(er) social status, that in itself can cause you to make more impulsive buying decisions. It might even be that you want to impress others by making a certain purchase. If you do so then typically you have a concern for your self-image in one area or another. Through impulse buying of a specific product, you feel a sense of community where you belong to or think you should belong to. Especially if you were used to a certain social status and you‘ve lost that but couldn‘t get back you may even get a feeling of nostalgia when buying a certain product.

When you walk away today with at least one new idea to improve your personal financial journey towards F.I.R.E., I’d love to show you some more in the next post. If you haven’t already, you can apply to become a part of the community to not miss any new release. For that you can subscribe to our Newsletter below in the green footer.

Now, I’d love to hear from you: How much do you estimate your impulse purchases to cost you in 1 week or month? Let me know in the comments below! I‘d love to run some numbers for you so that you know what would happen if you invest that money instead.

Title image source: Andrew Konstantinov on Unsplash