E-commerce, social media, and other high-tech wonders have redefined retailing, but old-fashioned impulse shopping is stronger than ever. Applying today's digital tools to this classic retailing principle can give you new ways to reach car wash customers.
Nearly half of all men and 60% of women make impulse purchases online.
Almost everything about retail marketing has changed in the 10 to 15 years since e-commerce took off; then things changed even more with the recent ascent of Facebook and the arrival of digital daily deal services like Groupon. Throughout this retailing revolution, there have been a few beacons of stability – one of the most enduring of them has been the power of impulse shopping.
Today's technologically savvy consumers may get daily deals sent to their iPhones, share them with their friends on Facebook, and comparison shop online until their fingers hurt, but in the final analysis, they're remarkably similar to their grandparents when it comes to impulse shopping. Responding to a 2010 Harris Interactive survey, 80% of consumers said they made at least one impulse purchase in the past year.
A car wash might not be as likely to stimulate impulse purchases as a supermarket or convenience store with their tempting candy bars and other small items, but operators who use the marketing tools in SiteWatch® to highlight specific menu items during the sales process can spur their customers to spend more per visit.
A Consistent Impulse
Psychologists who study consumer behavior have cited a number of factors behind the popularity of impulse shopping: some say it provides people with a sense of power, others ascribe it to a craving for adventure. For whatever reason, making unplanned purchases on the spur of the moment seems to be hard-wired into our brains as consumers.
For a time, some observers believed that the rise of Internet shopping would spell the end to impulse buying. Their theory was that since consumers couldn't actually see and touch a product in person, they would be less emotionally attached to it and therefore less likely to experience the "gotta have it" need that leads to impulsive purchase decisions.
However, the impulse urge has proven resistant to the Internet revolution. According to Michigan State University researchers, as many as 40% of all online purchases are unplanned. A GSI Commerce study found that nearly half of all men and 60% of women make impulse purchases online. In fact, the highly regarded Manhattan Associates research group identified impulse shopping as one of the top five retailing trends of 2012, thanks to its growing influence in e-commerce.
Clever Internet merchants like Amazon, Orbitz, and Gilt Groupe have developed new ways of spurring unplanned purchases online even though the touch-and-feel emotional motivators found in brick-and-mortar stores are absent. Car wash operators would do well to take a cue from these e-commerce leaders when developing their own impulse marketing strategies.
This is especially true for operators who sell washes from a self-pay terminal like the SiteWatch Xpress Pay Terminal® (XPT®). When you think about it, there are many similarities between a customer buying a car wash at an XPT and purchasing a product online. In both cases, customers are alone with a software-based device and no salesperson; and in both cases customers are purchasing something that is not directly in front of them as it would be in a store environment.
Money Talks More Loudly
Although the technology used by Internet merchants to generate impulse sales is new, the reward most often used to motivate consumers is as old as commerce itself – the desire to save money. In the Michigan State survey cited earlier, three out of four of the online consumers who made impulse purchases said they were driven by special deals.
The opportunity to save money has always been a powerful inducement, but it becomes even more compelling when it is coupled with a sense of urgency. This has long been the theory behind traditional "act now" sales at brick-and-mortar stores, but the time pressure becomes even more intense in the digital age, when special offers can be made and withdrawn online with breathtaking speed.
Raising the intensity level of money-saving offers by linking them to a limited timeframe has paid huge dividends for "flash sale" sites like Gilt Groupe, which offers very steep discounts on fashionable merchandise (mostly designer clothes), for a period that is typically less than one or two days. Using this impulse formula, Gilt, which was founded in 2007, grew into $423 million business by 2010 and $500 million last year.
Car wash operators who have SiteWatch Xpress Pay Terminals can follow a similar time-sensitive discount strategy to stimulate impulse sales. Instead of having their discounts last a few days as Gilt does, these car wash operators can create an even more intense sense of urgency by limiting their offers to the length of the customer's transaction at the XPT. For example, the operator can offer a discount on a future wash if the customer purchases it at the XPT during his or her current transaction.
Terrance Elder, owner of Triple Play Car Wash & Quick Lube in Attleboro, MA, followed this strategy and increased "step up" sales by 2,400%. Before customers complete their purchase at Triple Play's Xpress Pay Terminals, they are given a timed impulse offer that many of them find hard to resist. They can get the wash they selected free today if they pre-purchase three identical washes that they can use in the future. (The three washes are entered into the barcode on the customer’s receipt, which can be read by the XPT's built-in barcode reader.)
As a result of this impulse marketing promotion, step-up sales made through Triple Play's XPTs increased to the point where they accounted for 12% of Terrance's car wash volume at last report. Click here to read a Great American Success Story on Triple Play's promotion.
Putting Time on Your Side
Groupon service is conveying the message that consumers are in charge of the discount selection process.
Orbitz is another savvy Internet merchant that is putting time on its side to generate impulse sales. In 2011, the online travel company implemented a program that offers deep discounts to customers who make same-day reservations at hotels. The new impulse offers proved to be so popular that same day sales now account for 65% of mobile bookings and 14% of desktop bookings at Orbitz. Priceline quickly followed suit with its "Tonight Only" impulse marketing program, and same-day bookings now account for 60% of its mobile bookings.
Car wash operators can create a similar sense of excitement using the SiteWatch Profiles feature on their XPTs to offer time-sensitive discounts. For example, you can offer a 50% discount on your best wash package for one hour on Tuesdays and Wednesdays; then promote this special with signage and on your XPT screens during those periods. This impulse offer should not only generate extra revenue, it will also showcase your best service to more people, some of whom are likely to continue buying your deluxe service in the future.
Focused Impulse Offers
Groupon, the daily deal pioneer that built its business on time-sensitive offers, added a new twist to this concept in May 2011 by launching Groupon Now. Unlike the original Groupon, which offered deals for a day, the new service features multiple deals throughout the day targeted at consumers based on their interest and location.
A Groupon Now feed can have two icons, "I'm Hungry" and "I'm Bored." Consumers who click the Hungry link can see limited time (1-2 hour) deals from restaurants located in their vicinity. Those who click the Bored link access deals on entertainment and leisure purchases.
By targeting deals at consumers based on key factors about them – their interest and their location – Groupon Now makes its time-sensitive impulse offers even more attractive. That's why Groupon Now sold 1.5 million deals by the time it celebrated its first anniversary. (It took the original Groupon 15 months to reach this milestone.)
As a car wash operator, you can focus your impulse offers on the interests of specific customers, not using their location as Groupon Now does, but by drawing on their purchase history. New Profiles Features in the SiteWatch XPT allow you to tailor sales messages at customers based on the date of their last visit, menu items previously purchased, and other factors that will make your impulse deals more compelling.
There's another lesson to be learned from Groupon Now. By offering the option of choosing between two icons "Hungry" and "Bored," the new Groupon service is conveying the message that consumers are in charge of the discount selection process. This appeals to the desire that many of today's consumers have to be in control of their retail transactions.
Car wash operators can follow a similar philosophy when marketing impulse offers on their XPTs. For example, they can have two icons appear on their self-pay station screens, one reading "Save Money Today," and the other reading "Save Even More In The Future." The "Today" icon can take customers to a screen that allows them to add an extra service to their wash for half price; while the "Future" icon allows them to buy the same wash as their current selection for half price.
Amazon, which has made a fortune by using the "recommended" feature on its shopping site to stimulate unplanned purchases, recently introduced a new impulse marketing program that also offers valuable lessons to car wash operators. The company launched its Amazon Add On program in May 2012. The program encourages the customer to increase the size of his or her order (so it qualifies for free shipping) by adding a specially priced single unit of a bulk item that Amazon normally sells only in larger quantities.
For example, Amazon will offer a single tin of peanuts for $5.24, rather than the normal six pack of tins for $30. Aside from offering customers low bulk pricing on single unit purchases, this incentive allows them to qualify for free shipping. From Amazon's perspective, the promotion more than makes up for the cost of these incentives, because it spurs impulse sales and increases the size of the average ticket.
Car wash operators can use the SiteWatch Profiles feature to borrow a page from Amazon's playbook by doing things like offering customers a discount on an ala carte service so they can bring their order up to a level that qualifies them for a 25% off gift card purchase or some other incentive.
The way you configure this kind of offer will of course depend on the particular situation in your market. However, regardless of the incentives you offer, there's a good chance that at least some of them will resonate with customers. Despite all of the changes that have reshaped retailing, the "impulse" to come across a good deal and act quickly on it remains as powerful as ever for most consumers.
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