Decision making is largely constructed of two main components, logic and emotion. Impulse buying has traditionally capitalized on the latter of the two, tapping into the consumers’ emotional desires and moods to make purchases that don’t involve much thought.In this model logic follows emotion as consumers rationalize or justify their reason for making the purchase, whether it be big or small. As brands continually deepen their understanding of the consumer experience they will not only increase their revenue through impulse purchases, but open new In 2011, US$7.5 billion of US consumers’ money went towards individual impulse sized chocolate confectionary.opportunities to strengthen their brand with the consumers – creating long-term, profitable relationships.The Core ‘Impulse’ CategoriesWithin the food and beverage industry, the most common impulse purchase is confectionary; an affordable indulgence that brightens the day. In 2011, US$7.5 billion of US consumers’ money went towards individual impulse sized chocolate confectionary. Manufacturers like Mars, Kraft and Ferrero all plan marketing and distribution strategies around impulse purchasing. But with changes in disposable income has led to changes in impulse purchasing patterns. The question is what long lasting impact will this have.Shrinking Size and Lower Unit PricesChocolate and sugar confectionary along with chewing gum retail sales were up 3.4% in 2011. Brands like Kraft and Wrigley are hoping to make their impulse appeal even stronger with consumers by releasing gum packs with fewer sticks at a much lower cost. Trident and Stride currently offer 5-stick packs for 50 cents and Wrigley plans to launch a similar pack format this year. The goal is to land more pocket-change purchases, mainly from Gen Y and Gen Z targets.While these are small, inexpensive items they are enough to help consumers relieve stress and anger. With the added frugal mindset brought on by the economic downturn, these examples do not cost enough to give the consumer spending guilt. There is a sweet spot between spending guilt and buying something that gives the consumer a short but sweet delight. Brands need to understand where that opportunity lies, and importantly, which can be specific to their category.New Media Outlets for Impulse PurchasingImpulse buying could see a substantial increase as Smart TVs become more mainstream in the marketplace – and they are well on their way. In 2011, 17% of all TVs shipped in the US had Internet connection capabilities. The market is expected to continue to expand and reach approximately 123 A better understanding of consumers and their emotions can open up new channels for brands to build long-term profitable relationships with consumersmillion shipments by 2014. As these devices become more common and advertising media becomes more sophisticated it could open a new channel for brands to capitalize on a consumer’s emotional state influenced by a show to prompt them into an impulse purchase directly from their TV.A better understanding of consumers and their emotions can open up new channels for brands to build long-term profitable relationships with consumers based on emotional, impulse purchases that bring revenue in for the brand and delight to the consumer.

Impulse buying is on the rise despite consumers’ penny-pinching mindset driven by the down economy.A late 2011 study reported 76% of over 1,000 British adults make impulse purchases. Out of that 76%, 77% of women and 71% of men stated those purchases happened when grocery shopping. Major pushes for impulse buying are due to advances in technology combining with mega trends like health and wellness, on-the-go, affordable indulgences, and lower overhead costs to brands. This blend creates new opportunities for every value chain member in the food and beverage industry. As these trends persist, brands can create new revenue streams by giving consumers a delightful experience through impulse purchases.Technology To-GoThere is a consistent blending of the virtual and physical retail world – and this includes the consumers’ wallet. Google has launched Google Wallet, which uses Near-Field Communication technology to allow consumers to use their phones as a tap-and-pay device at any MasterCard PayPass device. The application is still in an early phase of its lifecycle as consumer acceptance and retail availability both grow. One hurdle Wallet faces with mass adoption is the number of banks participating. Currently it is linked with MasterCard and a reloadable Google card, but the device needs more brands like Visa and American Express; as well as debit card capability.Another is the number of phones equipped with NFC, which is currently lacking. With an already impressive number of retailers supporting the Wallet system, this new payment method should continue to grow. More recently, it is expanding into five more US cities: Charlotte, Kansas City, Milwaukee, San Antonio, and Tampa. Connecting pay methods to smartphones streamlines the purchasing process, making impulse purchases more immediate and tangible.Transit... a Key Impulse Purchasing DestinationTesco’s South Korean-based grocery chain, Home Plus, has been capitalizing on consumers’ busy lifestyles and mobile technology by creating a shopping experience at subway terminals. Large posters mimic the grocery shelf with pictures of products that are labeled with QR codes. While consumers wait for their ride, they can scan and purchase different grocery items that will be at their doorstep by the time they get home. During it’s trial run, Home Plus reached more than 10,000 customers and saw a 130% increase in online sales. Surprisingly, such a system has not yet hit condensed US markets such as New York City, which has an average weekday metro ridership of over 5 million.By understanding the consumers’ daily journey, transit points and time between transit points, these grocers have been able to identify a profitable new business model whilst tapping into the impulse market. The chocolate confectionary market is just one portion of the impulse market and is expected to grow to US$19 billion by 2015....accelerate the consumers’ purchasing decision process, making impulse buying more convenient.Both examples accelerate the consumers’ purchasing decision process, making impulse buying more convenient, more impulsive. Brands need to continue to explore ways to streamline purchasing decisions and the barriers by syncing their products and services with technology and the consumers’ daily journey.

Ever heard of retail therapy? Did you know that only a third of purchase decisions are made ahead of time, outside the store? Since a key report by Knutson uncovered the basic neurology of impulsive purchases, recent studies continue to affirm alternating activation of pleasure and pain centers.Companies need to understand those strategies that lead to unplanned, or impulse purchases. This is especially important in a time of diminishing disposable income.The Impulse BuyImpulse buys satisfy the desire of the moment – often at a higher cost than the price tag. With today’s social climate of transparent information, consumers increasingly hold companies accountable for pollution, excessive packaging, and unethical employment practices. The question is – are we seeing a new breed of impulse products? And are they being influenced significantly by macro consumer trends? The answer is, inevitably, yes, at least for developed markets. Brand manufacturers need to develop strategies that increase market share over the short to medium term.The New ConsumerAs the sustainability meme spreads, more and more consumers aspire to be “green.” A pivotal study, “The Green Revolution” discovered “light” and “dark” green consumers. Dark greens– who insist on sustainability and gladly pay a premium—compose a mere 9% of shoppers. However, 89% identified as shades of “light green,” leaning towards green products while realistically balancing considerations like effectiveness, safety, and price. BBMG, took the concept to heart: they have released annual reports on the evolution of “light green” consumption for three years. Their 2011 report predicts a tipping point in green consumption, where the influence of light greens will finally scale true sustainability to mainstream consumption. The increasingly-knowledgeable light green consumers weigh many factors whilst purchasing, so their pain response could be tripped by a number of Although light greens do not research products, they remain fiercely loyal once they have found an effective sustainable product.considerations. Because environmental awareness has been on the social radar for a while, consumers face green fatigue and even toss around the phrase “green-washing.” Although light greens do not research products, they remain fiercely loyal once they have found an effective sustainable product. Socially connected, this group spreads the word of mouth to their friends via connected social media on mobile devices.Disdainful of advertising, this group trusts friend recommendations more than company claims, especially within Gen Y who as a core impulse purchasing demographic group crave realism and rely on peer advice.Impulse Without RegretOver 60% of all “green” product purchases are made on impulse, often out of simple curiosity.Over 60% of all “green” product purchases are made on impulse, often out of simple curiosity.In fact, 84% of light greens admit their first eco-conscious product was an impulse purchase brought on by curiosity and an impulse urge. And the environment is only one facet of sustainability – everything from workforce employment, to packaging, ingredients source and waste disposal is subject to scrutiny. Companies can use in-store contact points including, POS displays, or RRP to stimulate light green consumers’ curiosity, and even charge a higher price for products successfully positioned as sustainable.When Clorox first introduced their Green Works cleaning products, consumers gladly paid a 25% markup over conventional products. Even wading into the crowded Wal-Mart shelves, and even with the Recession forcing prices lower, the company’s market share continued to climb through this year to nearly 50%.Consumers get around green-washing by searching for signs of authenticity, like third-party certification of social and environmental benefits. This may be why 75% of consumers say a Fair Trade Label makes them feel positive about a purchase, and 30% say it increases purchase interest. (Harvard Research, 2011) The most important signal of sustainability in almost every single product category is packaging. It makes sense – not many will buy an item designed to help the environment if it comes wrapped in polluting layers.Sitting PrettyPackaging influences purchase even more than store atmosphere. People first notice color, then shape, and finally labels and logos. A sustainable product should hit those three notes. Color can be used as a cue. Consumers most likely associate green with sustainability, but too much green is perceived as green-washing. A distinct shape, like Method’s home and personal care products, can be made with earth-friendly materials to strike an authentic harmony. Finally, third-party certifications can be used to position the product as a holistically sustainable alternative.The Green Works product line features iconic natural images of flowers, accented with the sustainability cue, green. The traditional spray bottle prevents confusion about the product’s purpose. Finally, the Clorox logo adds credibility and trust – especially when combined with the Design for the Environment Certification.Taking it to the TribeThere are three key appeals to the new consumers: practicality, sustainability, and community. Light green consumers trust each other, and brands that enable communication between advocates will amplify this tendency. Clorox’s “Green Works” line includes a portal where consumers can post and discuss ideas for natural cleaning products. Beyond the web, emerging technologies let light green consumers explore and share sustainable products, or even punish unsustainable companies, anywhere. And as more and more people tune in to light green and sustainable consumption, companies will benefit or suffer in proportion to their efforts to court the new consumers. Companies that do not address light greens’ concerns will face social networks and media savvy. Just look at PETA’s sabotaging of Volkswagon’s Twitter campaign for signs of things to come.The New DesirePost-recession, consumers continue to demand fewer items of higher quality. From event give-aways to private-label groceries, less is more. A single item that will last twice as long can command a premium price. Using packaging to catch attention, including authenticity cues to overcome green fatigue, companies can seal the deal with a quality product. The combination will trigger an impulse buy, and create a foundation for customer loyalty rather than regret. The right positioning can overcome the pain response, giving consumers the joy of buying without the guilt.

Both Kraft and Wrigley are downscaling gum packs. Appealing to consumers’ tightened finances and “less is more” mentality, 5-stick packs will sell for 35 cents at convenience stores and retail check-outs. The smaller size lets on-the-go consumers indulge in a craving, for less cost. Satisfying spur of the moment urges will means slightly higher cost per-stick, a price many see as worthwhile for a pack that they don’t have to find later to use that last piece of gum.

Over the last few years, during the economic downturn, a stay-at-home culture has developed that means consumers are not just eating more at home, they are also socializing and entertaining more at home, and the supermarkets are generally benefiting from this behavioral shift.In addition to favorable consumer behaviors, supermarkets are increasingly in a position of power with suppliers and consumers, offering a larger range of own-branded products.Increase in own-branded productsEarlier this year, Tesco made a bold move by reducing the number of suppliers, consolidating less meaningful brands and replacing their products with its own brands. In 2011 Tesco put creating brands at the heart of their strategy – over the next few years we can expect them to fulfill this ambition and become a global brand owner.In 2011 Tesco put creating brands at the heart of their strategyThis year we have witnessed a number of new products from Tesco hit their shelves that don’t state the Tesco name. The first ‘venture-brands’ to come to market this year were ChokaBlok ice-cream, Lathams dog food, NutriCat cat food and the Parioli Italian range. Each of these brands has allowed Tesco to retail products that have met gaps in their previous stock, offering their customers a wider choice.Moreover, Tesco hope that these new venture-brands will be successful enough to be sold in non-competing retailers, such as convenience stores and petrol stations, as well as outside the UK where their biggest growth business is.The business of creating new brandsWith the large amount of customer data gathered from their loyalty card scheme, Clubcard, Tesco know what products customers are purchasing, as well as purchasing patterns and price point accessibility, and as a result they can identify customer segments and patterns. This extensive data, combined with data they receive from suppliers, gives Tesco a raft of knowledge about each one of their shoppers, giving them an unrivalled and detailed understanding of the driving motivations behind consumer behavior, which allows them to create brands that are highly desirable.With control over all of the 4Ps of the marketing mix (Product, Promotion, Price and Place) the world’s third largest retailer will be well positioned to make this strategy work globally, especially as the new products will have the advantage of being automatically listed in thousands of stores in the UK and overseas. It will also give them a stronger hand when negotiating with suppliers, but as this strategy will result in the retailer competing directly with their suppliers we can expect to see a large amount of NPD and marketing from established brands as they look to mark their territory and build share in markets that private label can’t.Looking to 2012As one of the world’s most influential businesses, Tesco’s strategy is a major threat to many global brands, and sets a precedent that many other retailers may follow in 2012. With Tesco’s knowledge of brand building, this may give them the edge they require to crack the US market, where private label penetration is still relatively low.Next year we are likely to witness a shift in route to market strategies, with brands looking to new channels and tactics to compete with the big supermarket brands.

Snapette is a new location-based fashion app enabling users to share and discover the latest fashion accessories from anywhere in the world – now you can window-shop the world from the comfort of your own home.Users take photos of their favorite bags, shoes and accessories and post them to Snapette, along with comments and where they found them. Users can then search by brand, store, description and by what’s new, near or trending (with the most likes and comments), as well as comment on photos, share tips and recommendations.Snapette’s aim is to create a community of stylish techies. With shoppers turning to peers and review sites for inspiration and guidance on purchase decisions, this app is set to become hugely popular amongst young fashionistas.With apps increasingly helping consumers make purchasing decisions before they visit a store, retailers must look at making apps part of their digital strategy.Retailers have to ensure that their products are being seen in the new digital spaces consumers are looking, and make it as easy as possible for consumers to find them and then buy them.

Reduce, reuse, recycle – it was the simple mantra that marked the mainstream arrival of the environmental movement, and it still stands true today as one of the easiest focus that brands and consumers alike can have to help save the planet.

Consumers are beginning to expect brands to be better for the planet, and in the foodservice industry brands have the opportunity to not only attract consumers by implementing sustainable initiatives but also directly improve their profitability by reducing reliance on the utilities grid.

Plastic bottles, and particularly those for milk, are one of the largest culprits of filling landfills. Over 18 billion rigid plastic containers were used for milk globally last year. With the US going through over 6 billion, which was equal to the entire consumption in Western Europe.

Although the wider retail sector is struggling, the supermarkets are flourishing, as food is not a luxury but a necessity.

As the name suggests, 'retailtainment' is a blend of retail and entertainment. The heightened shopping experience is becoming more widely adopted throughout retailing.

The smoothie brand, innocent, has published a new recipe book that is on-brand with fun and humor.

Using the new opportunity of space afforded by the A380, Korean Air has outfitted one with a physical duty-free shop. The store has a dedicated, full-time sales assistant, and will open throughout the flight – offering everything from perfumes to alcohol. The space was designed by L'Oreal, and replaces 13 seats in the aircraft, showing that the airline believes it will be a highly profitable part of their service to passengers.  

Smart technologies are changing the way machines, devices and computers communicate among themselves. Innovative applications based on proximity sensor Near Field Communications (NFC) technology allow devices to exchange information with one another.

For the last 20 years the internet has connected us to each other in increasingly varied ways – beginning with email and chat rooms, and now with social networks. The rise of social media has presented huge opportunities for people to connect with each other via messages, statuses and photos – and now brands have realized the potential to connect consumers to their products, ushering in a new era of innovative services and commercial strategies.

  Next year looks set to be a very exciting year with a number of trends reaching tipping point, resulting in shifts across mainstream cultures and lifestyles, with new products being bought, new business models being exploited, and new services being introduced.

Over the last couple of years, American and European cities have seen a growing trend to utilize public spaces better. This has manifested itself in the development of the guerilla gardening movement, as well as a rise in temporary ‘pop-up’ shops, cafes, restaurants and cinemas. Although previously seen as a retail approach that only small, independent companies would take, we are now seeing big consumer brands running small pop-up stores in major cities.

Retailers are ushering in a new world of self-service buy-and-pay applications, with consumers increasingly using self-checkout stations at grocery stores, paying for travel through airport check-in kiosks, renting movies from self-service DVD rental kiosks, and motorists are refueling their vehicles at pay-at-pump gas stations. Restaurant diners can even order from touch-screens at fast-food chains and use hand-held, pay-at-table devices at sit-down restaurants.

Levi’s revenues are rising - growing 17%, (Reuters) - in no small part to their investment in their retail strategy.

The prevalence of mobile devices, and the continuing increase in the abilities of our technologies, mean that we can now interact with products and places like never before. This has already infiltrated our lives in the form of social networking, where people can connect whenever and wherever they are thanks to their mobile devices, letting friends know where in town they’re having a drink, or rating the latest restaurant and sharing it with the community.

Despite the fact that online retail has been a strong, and growing, presence in our lives for the last decade it still only accounts for around 10% of sales in the US and UK markets – so why is it not larger? We could soon see a change in this, as major retailers and brands start to roll out more innovative and ambitious online retail programs.

Last year, Kellogg’s tested a new cereal box that was shorter and deeper resulting in saving 8% packaging material, whilst still containing the same amount of cereal. It was tested for six months in Kroger and Wal-Mart stores in Detroit.

Nike’s flagship Japanese store opened in Tokyo last year. The store exemplifies Nike’s brand, incorporating a unique design that makes it more like a playing field than a conventional store.

Over the last 3 years cell phones have included increasing sensitive and accurate sensors within them. From mics, to cameras to accelerometers, our phones have gained the ability to further interact with the consumer and the world around them.

With the future of the global economy still uncertain, more brands are looking to developing markets, specifically to the Chinese consumer – who might be able to lift the global economy out of recession.

A superior experience is one of the fundamentals of a luxury brand. Service online and in-store, as well as after-sales are vital for luxury brands. Luxury brands don’t just create well-crafted products, but the experience around them is equally as important.

A better understanding of consumers and their emotions can open up new channels for brands to build long-term profitable relationships with consumers based on emotional, impulse purchases that bring revenue in for the brand and delight to the consumer.

A few fun facts to keep you thinking through this holiday season.

Exploring how the rise in consumers diagnosed with allergies has led to an increase in free-from products, and how the free-from market has moved into the mainstream.

This week TOMS announced a significant repositioning of their brand – from TOMS shoes to TOMS 'one for one'. With this shift, they have moved from being merely a shoe company, or even a fashion-ware brand, to an initiative based business built around the one-for-one model.

Earlier this year TomTom and Nike+ released details of a collaborative project – the TomTom Sports Watch.

The social connectivity that the internet has given us has also allowed consumers to connect with the wider world on a commercial level.