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FEDERAL STATE EDUCATIONAL INSTITUTION

OF HIGHER EDUCATION

NATIONAL RESEARCH UNIVERSITY

HIGHER SCHOOL OF ECONOMICS

Saint Petersburg School of Economics and Management

Department of Management

Bachelor's thesis

FACTORS INFLUENCING ONLINE IMPULSE BUYING BEHAVIOR: EVIDENCE FROM YOUNG RUSSIAN CONSUMERS

Kolesov Denis Igorevich, Mursaev Eugeny Alekseevich,

Romanchuk Vladislav Valerievich

Supervisor Professor at NRU HSE, Doctor

of economic science E. V. Korchagina

Saint Petersburg 2019



Abstract

Nowadays consumers spend a lot of time in shopping environments, and one of them, which is the Internet, is becoming and more significant in their everyday lives. A great number of various factors determines consumer behavior and that makes it complicated and difficult to predict, especially when consumer behavior manifests itself in a form of impulse buying, which happens on spur of the moment. This study examines some of the factors that cause such behavior online and points out possibilities for future research. The purpose of the study is to explore and define the behavior held by Russian youth towards online impulse buying behavior. This study identifies how gender, income, education and employment of people of group age of 16-30 affect the way they conduct impulse purchases basing on a number of relevant factors as main reference points. Quantitative and qualitative methods of data gathering were used in forms of a semi-structured interview and a survey. In qualitative part of the research it was found that Scarcity and Telepresence influence online impulse buying behavior of women and Social presence influences men and people without own source of income. In quantitative part it was found that Price, discount and sales has a weak influence on male respondents, a moderate influence on unemployed respondents and a strong influence on people with lower income, Atmospheric cues have a strong influence on female respondents and a moderate influence on people with higher income, Social presence has a strong influence on male respondents and respondents with lower income, Use of search mechanism has a strong influence on male respondents, Return policy has a strong influence on people with lower income. These findings should help e-retailers and e-marketers to understand their target audience better in order to sell their products in a more effective way and thus strengthen their competiveness and increase profits.

Keywords: electronic commerce, online impulse buying, online shopping, online consumer behavior, marketing stimuli, website stimuli, situational stimuli



Table of Content

online impulse buying behavior

Introduction

1. Literature review

1.1 E-commerce and its difference from traditional commerce

1.2 Impulse buying and its characteristics

1.3 Marketing stimuli that influence online impulse buying behavior

1.4 Website stimuli that influence online impulse buying behavior

1.5 Situational stimuli that influence online impulse buying behavior

2. Methodology

3. Results

4. Discussions and conclusions

4.1 Limitations and future research

4.2 Theoretical contribution

4.3 Managerial implications

Reference list

Appendix 1

Appendix 2

Appendix 3



Introduction

In the era of globalization, the Internet plays an important role in all spheres of society. The Internet is widely used by people to find the necessary goods and services, information and to meet a wide variety of needs. It is obvious that the world of technology, digital marketing and social media has a significant impact on social behavior, including behavior of both consumers and businesses. The Internet is a completely different environment that gives incredible opportunities for communication.

A well-known economist and expert in the field of business administration Michael Porter notes that the emergence of the Internet and the associated electronic economy have led to rethinking of many fundamental ideas related to business and marketing. [Porter, 2007] Nowadays the Internet is one of the most effective sales channels that does not require a large amount of material resources and that is able to spread the necessary information about a product or service and attract a wide interested audience in a very short period of time.

The e-commerce marketplace is growing at a very fast pace followed by the rising number of customers who conduct online purchases impulsively. [Park, 2012] This study explores the relationship between various marketing and website stimuli (such as price, discounts, bonuses, promotions on the side of marketing and various web-site features like customized view, telepresence, use of recommendation agent and so on) as well as some situational stimuli (such as variety of choice and return policy) and online impulse buying behavior. It also examines how gender, income, education and employment affect this relationship.

The relevance of this study is represented by the need of online B2C businesses to better understand their target audience in order to sell their products in a more effective way and thus strengthen their competiveness and increase profits. Revenues have a direct relation to the online shopping behavior of customers, which contributes to the retailers' interest in this subject. The relevance is also supported by the emergence of new technologies (for example, HTML5) that allow web-site developers to enhance the content of the web-site in order to attain more customers and rise the number of purchases.

Although there are various studies concerning online impulse buying behavior, there were few works found, which findings could be applied to Russia. Moreover, there were no studies found, which would pay attention to all three categories of stimuli at the same time, which are marketing, web-site and situational stimuli, except the literature analysis of Chan, Cheung, Lee [2017]. The scholars have consolidated the findings from a number of previous researches devoted to the subject and classified the factors that influence online impulse buying behavior. It should be noted that the previous studies focused only on a single or several stimuli belonging to either one or two separate categories. Therefore, this study is aimed on filling these gaps with the results of our research and creating a big picture of what stimuli have the most significant effect on the impulse buying behavior online among online shoppers from Russia.

Thus, the research question is “How does gender, income, education and employment of people of group age from 16 to 30 influence their online impulse buying behavior with apparel products basing on marketing, website and situational stimuli?”

Apparel is chosen as an example to study the online impulse buying phenomena, since it is one of the most popular products to be bought online in Russia, according to Yandex's recent research [“Розничная онлайн-торговля в России,” 2015]. Regarding the chosen age group, according to the study of Russian scholar that aimed to define term “young people” [Белый, 2012], it is advisable to distinguish at least three sub-groups of young people - from 14 to 18 years, from 18 to 22-25 years and from 25 to 30 years. Such categorization is supported by a number of social positions such as obtaining a passport, legislative registration of rights and obligations, electoral law, vocational education, etc. Since Russian young people are allowed to work officially starting from age 16 and that justifies the chosen lower threshold, since we operate with such independent variables as Employment and Income.

The main idea of the study is to explore and define the behavior held by Russian youth towards online impulse buying behavior. The research intends to obtain complete and accurate information regarding the characteristics of the observed group in relation to the phenomena as the result. The aim of the study is to identify whether there is a connection between gender, income, education and employment of an online customer and his online impulse buying behavior.

Independent variables include Gender, Income, Education and Employment. However, in the qualitative part of the research it was decided not to use the independent variable Employment, but to use independent variable Earnings, which means that the interviewee has any source of income, which is not limited by salary gained from the job. Such measure was taken, because a number of the respondents are self-employed, some do voluntary jobs and some receive social assistance. The independent variable Employment is used in the quantitative part of the study. The independent variable Education is also not used in the quantitative part, because the most of the interviews are university undergraduate students.

Dependent variables are divided in three categories:

1. Marketing stimuli that influence online impulse buying behavior:

· Price, discount and sales

· Bonus and promotion

· Scarcity

2. Website stimuli that influence online impulse buying behavior:

· Personalization and customized view

· Social presence

· Telepresence

· Use of recommendation agent

· Use of search mechanism

· Atmospheric cues (store content, ease of use and navigation, visual appeal)

3. Situational stimuli that influence online impulse buying behavior:

· Variety of selection and product availability

· Return policy

These dependent variables are the stimuli that are proved to be significant by a number of studies and they are discussed in the literature review. (Park et al., 2011; Dawson & Kim, 2010; Zheng et al., 2013; Floh & Madlberger, 2013; Khalifa & Shen, 2012; Vonkeman et al., 2017; Moez, 2013; Hostler et al., 2011; Koufaris, 2002; Montoya-Weiss, 2003; Chan et al., 2017; Bressolles et al., 2007; Eroglua et al., 2001; Cyr, 2006; Liu et al., 2013; Chen-Yu & Seock, 2002; Mesiranta, 2009)

Research strategy includes qualitative semi-structured interview and a quantitative survey. Regarding semi-structured interview, the interviewees are asked questions about their online impulse buying experience and the stimuli that affect them while shopping online. The stimuli are represented in the dependent variables section. After conducting the semi-structured interviews, the list of the stimuli, which the youth considers to be the most significant while making apparel purchases online is compiled. The following step is survey, which assesses respondents on the importance of the previously chosen stimuli for their own online impulse buying experience.

The hypotheses are following:

1. Gender as a determinant significantly influences consumer behavior and impulsive purchases based on the stimuli.

2. Income as a determinant significantly influences consumer behavior and impulsive purchases based on the stimuli.

3. Employment as a determinant significantly influences consumer behavior and impulsive purchases based on the stimuli.

4. Education as a determinant significantly influences consumer behavior and impulsive purchases based on the stimuli.

After completing the qualitative part of the research, the most repeatedly named stimulus for the Russian youth are transferred to the quantitative part of the research, as well as those that have correlation with the chosen independent variables.

Regarding time horizons, the study is cross-sectional, because the phenomena is observed at a single point in a time and the research focuses on numerous characteristics at once. There is also no manipulation over the variables as well.

Basis of the study is theoretical (includes studying professional literature) and empirical (semi-structured interview and survey). The research is based entirely on the primary data, which is gathered in the qualitative and quantitative parts of the research, which are semi-structured interview and online questionnaire respectively. The set of primary data is then analyzed with the use of Stata software and thus the secondary data is received.

Our target audiences are online businesses that sell apparel and products alike. The findings of this study are aimed to help them to conduct their targeting in a more accurate and effective way, since this study provides them with the insight regarding the stimuli that trigger impulse buying behavior among Russian youth who buy apparel online. Moreover, this study can be also useful for e-marketers, who are trying to understand impulse buying behavior in the online environment and develop efficient marketing strategies in this regard.

This study also has a theoretical value, since numerous online researchers and scholars would want to understand how online shoppers, while navigating a web store, decide to purchase a product on a spur of the moment, because in another situation they would not buy it. [Park et al., 2012] This study contributes to the subject of online impulse buying behavior by analyzing the connection between three groups of stimuli (marketing, web site and situational stimuli) at once to gender, employment, education and income.

Critical Constraints: Since the findings can be applied to represent behavioral patterns of youth located in Russia, Saint-Petersburg, the study may have difficulties with external validity. This means that the results may not be applied to other countries and regions and to other age groups as well. The fact that the research focuses on impulse buying of apparel is another important constraint, because the findings might not be applied to products with different functions. In addition, the answers of semi-structured interview might be distorted because of the interviewer's presence.



1. Literature review

1.1 E-commerce and its difference from traditional commerce

E-Commerce, as an innovative way of doing business, allows business participants to interact with each other at minimal cost, regardless of the distance and in a convenient mode for them.

According to Gary P. [2011], all kinds of economic activities that use Internet technologies can be defined as “electronic commerce” or “e-commerce”. This term includes not only shopping and doing business on the Web, but also such activities as “businesses trading with other businesses and internal processes that companies use to support their buying, selling, hiring, planning, and other activities.” In the late 1990s, it was still emerging as an innovative way to do business. Its development is facilitated by the creation of inventory management systems, the emergence of computer networks and data transmission systems, payment cards and other electronic payment systems, as well as the whole commercialization of the Internet.

It is evident that access to electronic information exchange drastically improves the efficiency of economic entities by reducing both costs and time needed for a transaction, as well as allowing to receive information fast and accurately, ensuring high speed of financial calculations and reduction of the cost of delivery (mainly for goods that can be obtained electronically). Besides, e-commerce also makes products and services available in remote areas. Thus, the advantages of e-commerce reach out to the general welfare of society. As a tool, it improves market analysis and strategic planning activities and gives great opportunities for marketing researches. The scope of e-commerce is determined not by geographical or national boundaries, but by the spread of computer networks. Because the most important networks are global, e-commerce allows even the smallest businesses to achieve a global presence and do business globally. [Gary, 2011]

In addition to the undoubted advantages, the implementation of e-commerce has a number of disadvantages, both for the consumers and businesses. To start with, electronic commerce is an attractive environment for fraud, since some web-sites lack a sufficient level of security, and that may result in money loss for both a customer and the e-commerce business. Another issue is the imperfection of the legal framework in the field of e-commerce. New ways of conducting transactions, new tools and new service providers require definition, acknowledgment, and authorization from the perspective of the law. [Khan, 2016]

Overall, e-commerce has become one of the main global trends in economic development as well as it has become an integral part of society. It promotes globalization, blurs national borders, accelerates information exchange and contributes to economy growth.

In order to make a number of differences between e-commerce and traditional trade, it is necessary to consider and compare their main features and characteristics, which are presented in Table 1.

Table 1

Comparative characteristics of e-Commerce and traditional trade*

Features	Form of trade
	E-commerce	Traditional
Place of purchase	The website of the online store	Physical store
Grounds for decision to purchase goods	Price lists, visual representation of goods and/or in catalogues	Price tags for goods, organoleptic properties of goods (appearance for food, and smell for perfumery and cosmetic goods)
Contact with the goods when they are selected	None	Direct contact with the goods
The ability to choose a specific copy among the same products	None	Products are available for demonstration or there's an open display with them
Time spent on the purchase	Minimum	Maximum
Personal contact between customer and seller	Is virtual in the process of ordering goods, and if necessary, an advice by phone or e-mail can be made	Direct contact during selection (in the form of consultation), payment and delivery of a product
Form of payment	Pre-payment of the invoice through the electronic payment system	Direct payment by cash or electronic card
When the goods are received	Deferred time after delivery of the goods to the purchaser	Immediately after payment
The range of goods sold	Wide, but unstable, under the order	Limited but relatively stable in view of sustainable demand
Distribution cost	Low	Increased compared to the online store
Consumer segmentation	Limited, includes online store visitors	Unlimited, any visitors to the trading room can buy goods
Risks of illiquid inventories	Minimum	Significant, especially if you do not study the demand and its changes in the selected market segment
Price of goods	Reduced (in most cases)	Increased compared to online trading
How the customers benefit	The process of purchasing goods is simplified, and time spent on the purchase is saved	The purchased goods are received immediately after payment
How the selling organizations benefit	The reduction in distribution costs and operational control demand	Identification of consumer preferences in direct contact with consumers

* Source: Николаева, М., Камолова, Д. (2017). Сравнительная характеристика электронной и традиционной розничной торговли. Торгово-экономический журнал, 4(2), 81-90.

Although these two forms of trade do compete with each other, they still can coexist, because one of these two forms of trade will not replace another one. This is due to the fact that they both focus on different needs of the customers: online shopping is for busy buyers, who are do not prefer visiting traditional stores, and traditional form of trade is there for shopping enthusiasts or those who do not use Internet. However, e-commerce might experience growth and thus strengthen its positions in some segments as the number of Internet users increases.



1.2 Impulse buying and its characteristics

Defining what makes a purchase an impulse one is not possible without understanding clearly what are its characteristics: the phenomenon is not reduced to a simple quick purchase or a non-rational purchase, but is determined by a set of factors that must necessarily occur. To fully understand what is meant by impulse purchase it is necessary to draw a line on the inside of the scientific researches that demonstrates the evolution of the theory and the most significant discoveries.

The exploration of impulse purchase phenomena starts with the work of Clover, which shows that if the stores were open fewer hours per week, the amount of sales would also decrease. [Clover, 1950] The reason for this variation lies in the hypothesis that a part of the purchases made in the store is not planned and/or necessary, but done simply because the consumer, being among the shelves, felt the urge or the need buy something. If the shop remained closed, this part of the sales would be lost and not recovered in the subsequent hours. Clover provides in this way the first empirical demonstration of the impact of the so-called “purchasing impulse” sales of retailers, delegating to further research the task of determining when a purchase may be considered properly impulsive. The following developments of the research on the subject have, therefore, tried to elaborate a definition of impulse buying which explain clearly the phenomenon, studying, however, only the purchasing behavior of “visible” and ignoring the analysis of psychological characteristics and behavioral patterns of consumers.

During the '60 different theories were brought forward with some divergences between them. In 1962, for example, Hawkins Stern theorizes that there is nothing that can be defined as “the purchase impulse”, but rather that there are different categories of purchases that are not planned [Stern, 1962]: pure impulse, a purchase of a sudden and totally unplanned nature, which “breaks” the normal path of consumer buying; reminder impulse, a purchase that is not planned, which exists when the consumer is in front of the product, and remembers a need for them because he has run out of it or running out of his supply of that product; suggestion impulse, a purchase that is not planned and that occurs when the consumer sees a product and immediately senses need to obtain it; and planned impulse, when the consumer enters the store without a clear idea about product he wants to buy, but with an explicit intention of allowing himselves to be conditioned by special offers or advantageous prices. This theory was later questioned by Iyer pointing out that actually all impulse purchases are purchases that are not planned, but not necessarily a purchase that is not planned can be classified as an impulse buying. [Iyer, 1989] A few years after that research was published, Stern, Davidson and Woody in their manual `Retailing Management' define the practice of impulse buying as a purchase that is not planned and dictated by the spur of the moment (decision made on the moment). [Davidson, 1966] In the initial stages of the study on the topic a little or no importance is given to the consumer and his personality traits: demographic variables, psychological, attitudinal and contextual behavioral, which were not initially considered, and no search was explicitly proposed to deepen this particular topic.

Among those who first moved in this direction, there were two main contributors: Kollat and Willet [1967], and Bellenger, Robertson and Hirschman [1978]. Kollat and Willet [1967] with a research conducted in the supermarkets demonstrate how some elements that are apparently not connected to the buying process affect the probability of making purchases that are not planned and influence the actual number of products purchased. The American scholars, in fact, show the effect of incremental percentage quantity of purchases that are not scheduled during the spending variables, such as the presence of a shopping list, the total of the receipt, the purchase frequency of a particular product or even the number of years of marriage. The study of Bellenger and Robertson [1978], instead, after defining the impulse buying as “a purchase for which the decision to buy is made in store at the moment” aims to evaluate the impact of other variables on impulse purchasing, by detecting statistical significance of a number of factors such as age, the reason why the consumer went to the store or the amount of dollars spent. The most interesting result that was presented by the researchers is the correlation between impulse purchases and some product categories according to demographic characteristics, showing how the impulse purchases depend on the changing of the combinations of sex/age/race categories.

Starting from the '80, the definition of impulse buying becomes progressively more complex and more explanatory of actual human behavior. First important turning point occurred with the work of Rook [1987], which introduces the essential element of the urge to buy as an intermediate condition between the perception of the stimulus and the actual purchase, explaining that the impulse does not directly generates an action (to buy), but rather gives impulse to desire (want to buy). The researcher, in fact, apart from the psychological definition of impulse to adapt and apply to the purchase context, emphasizes that an impulse is not something consciously planned, but rather something that emerges after you have encountered a certain stimulus: once you have had the impulse, this encourages immediate action. The mediator of this process is the ability to delay gratification, which strongly depends on the personality of the individual and the duration of the delay. Rook then formulates his definition of impulse buying, describing it as something that “occurs when a consumer tries on a sudden, often powerful and persistent urge to buy something immediately. The pulse to buy is hedonistically complex and can stimulate a conflict of emotions. In addition, the impulse buying is prone to occur with little regard of the consequences”. Rook manages to define some of the salient features of impulse buying, such as the “irresistible urge to buy” of the consumer, his excitement for the act of purchase itself, the lack of consideration of the consequences and, above all, the hedonic elements, that please the consumer and make him feel happy and satisfied to have completed the purchase; the scholar closes his research demonstrating that the impulse purchase is a distinct type of buying behavior of the consumer as dictated by many variables and by the character traits of the individual, including impulsiveness (impulsivity), paving the way for future research to measure the impact of this value on the behavior of purchase.

Once the concept was cleared, the subsequent developments were proposed to identify the variables that could effectively influence the consumer in his choice, to develop the “mental path” that the individual goes through before making a purchase; and process the dynamics of an impulse purchase. The first analysis performed by Youn and Faber [2000] divides the stimuli that lead to an impulse purchase in two dimensions: environmental and sensory, which includes the stimuli in the store and those stimuli generated by the levers of the marketing mix (promotions, advertising, price, etc.) plus the other sentimental and personal stimuli related to feelings of the individual prior the purchase and his personality traits. A person who feels depressed and dejected might be more influenced by environmental factors if he considers that holding a certain asset will reward him in some way. This study offers an important food for thought regarding the subjects of low impulsivity, showing that a consumer less impulsive and more rational would be much more interested in the price and looking for a bargain and, being in front of an offer that can not be missed, would buy without reflecting too much on the real need of that good.

In 2013, Indian scholars Ganesan Muruganantham and Ravi Shankar Bhakat collected and summarized the progress of the literature to draw a comprehensive picture of the patterns and overall variables most influential on the behavior of the shop [Muruganantham & Bhakat, 2013] divided into four categories:

· External stimuli: it means the set of demands coming from the context in which you made the purchase and from the levers of marketing. In this category all the variables are manipulated by the company/store, such as the environment of the shop (music, colors, layout, etc.), the promotions and prices of the products or the experience purchase offer to the consumer.

· Internal stimuli: those stimuli are related to the personality traits, moods and individual characteristics that may facilitate (or hinder) his tendency to buy impulse. The research demonstrates, for example, how important are the hedonistic values in our choices of purchase, as sometimes they affect the instinct rather than rationality.

· Situational factors related to the product: trivially factors as the amount of time or money available to affect directly on the purchase, but also variables such as seasonality, or location of the store.

· Demographical and socio-cultural factors: these are relevant demographical and socio-cultural factors such as sex (men and women tend to buy impulse different product categories), the income or the education received. Referring to this distinction it is possible to analyze separately the impact of the different variables to contextualize and understand more accurately the behavior dynamics in the different situations of purchase.

1.2.1 Online impulse buying

According to Eroglu, Machleit, Davis [2001], web stores have created pleasant and encouraging conditions that stimulate online shoppers to buy impulsively. This claim is supported by such facts as online shops are open 24/7, they have no assistants who would exert social pressure on customers, and they provide quick and convenient buying process.

Madhavaram and Laverie [2004] found online impulse buying phenomena to be very similar to impulse buying in physical stores. According to their study, online impulse buying behavior is caused in the result of being exposed to stimuli other than product, which provokes them to change their initial intention to buy what was not planned. The scholars also asked the respondents to name the factors that have influenced their decision to conduct an impulse purchase. Among those were named the price of the product, special offers, advertisements and some other.

The research of online impulse buying phenomena has taken to main directions. The first one explores how marketing stimuli affect consumers' intention to make impulse purchases. These stimuli include price, discounts, bonus packs, promotion and use of scarcity [Dawson & Kim, 2010; Zheng et al., 2013; Liu et al., 2013; Xu & Huang, 2014]. The second direction focuses on the web site stimuli that influence shoppers ' impulse buying behavior. These stimuli include visual appeals of a web site, telepresence, social presence, use of search mechanism and some other [Koufaris, 2002; Bressolles et al., 2007; Hostler et al., 2011; Shen & Khalifa, 2012; Floh & Madlberger, 2013; Moez, 2013]. There are also several studies that explore the influence of situational stimuli on consumers' online impulse behavior. These stimuli include variety of selection or product availability [Park et al., 2012; Zheng et al., 2013] and return policy [Mesiranta, 2009].

This study combines these directions in order to find out which factors influence young Russian shoppers' impulsive buying behavior online.

1.3 Marketing stimuli that influence online impulse buying behavior

1.3.1 Price, discount and sales

According to Park, Kim, Funches and Foxx, price is the most powerful attraction for online customers [Park, 2011]. In their research, the scholars found out that online customers tend to buy impulsively basing on the price of desired product or during special promotions.

Price discount is a sale-promoting strategy that offers consumers a product at reduced cost [Mishra & Mishra, 2011]. It may be introduced in terms of several monetary units or in terms of several percentages of the starting price off.

Dawson and Kim [Dawson & Kim, 2010] define sales as offers that represent “items on sale such as clearance items, markdowns, or limited time only sales.” They also point out that this factor includes the description of the product on sale, which might be highlighted by the web store to catch customer's attention.

Online shoppers especially pay attention to price, because they are not able to touch or try on an apparel product before buying it. Market participants should develop new offer formats to boost customer's interest in sales in order to attract price-sensitive customers, who make rational and logical decisions [Lepkowska-White, 2004]. When a new sales tactic is generated, it usually comes to creating the "smart-shopper-feeling" that aims at arousing sense of urgency (very limited stocks), when only a few dozen units of products put up for sale; flash offers that last only an hour; dynamic prices that favor the first buyer [Volo, 1995]. Exclusive contracts with brands combined with sale events (that happen at a low frequency) would also create an impression of rarity [Ayadi et al., 2012].

1.3.2 Bonus and promotion

Bonus refers to quantity-based sales promotion tactic, which offers consumers more of the product for the same price [Mishra & Mishra, 2011]. Chandran & Morwitz [2006] claim that when consumers are offered to obtain a bonus pack, they believe that they are going to get it for “free” along with the product they are purchasing, and this may stimulate impulse buying behavior.

Comparing bonus packs to discounts, some scholars find them to be more difficult for the customers to understand in online context. [Chen et al., 2012]. According to the study of Inman et al. [1990], cues that are clear and understandable are efficient in engaging customers in conducting impulsive responses.

Chan, Cheung and Lee [Chan, 2017] in their literature analysis devoted to the state of impulse-buying behavior define promotion as providing a customer with an additional item of purchased good [for example, “buy one and you will get one for free”], some percentage off, free delivery or shipping, free gift, discount coupon and alike. In the research of Dawson and Kim [Dawson & Kim, 2010] promotions were found to be a significant factor enticing consumers to buy impulsively. The scholars suggest that promotions might be more stimulating in evoking desire to make impulse purchases than sales. For example, they found that free shipping was one of the most influential tools leading to increase in rate of impulse purchases made by consumers. However, Kim and Dawson also notice that the decision to implement such promotional strategy might be difficult and burdensome, because of its financial costs.



1.3.3 Scarcity

In fundamental economic theory, scarcity is directly related to supply and demand. The rarer, more unusual and less accessible the product is, the more valuable it is in the eyes of people. Economist Leon Walrus [1874] defines scarcity as “something is useful but of limited quantity.”

An experiment held by Worchel, Lee and Adewole [1975] perfectly demonstrates the work of scarcity as a stimulus. The participants of the experiment, regular store customers, were asked to try some cookies and rate their taste. In one case, they had to get the cookies out of a vase that contained about ten cookies, in another case they had to get the cookies out of a vase with only two cookies. The study showed that in the second case the visitors of the store rated taste of the cookies higher than in the first case. In addition, the participants of the experiment noted that in the future it would be preferable for them to take cookies from an almost empty vase.

The lack of something makes us think that we are missing our last opportunity, that is, the fear of loss. Fear of loss is a very strong motivational stimulus, which has been proved by a number of researches. For instance, those householders, who were told that because of the insufficient thermal insulation they could lose money, were more likely to engage in improving the insulation of their living places than those who were told that the thermal insulation would help them to save a lot of money [Gonzales, 1988]. Thus, people are much more sensitive to possible losses than to possible incomes.

Studies show the scarcity created by marketing means is able to contribute to the products' attractiveness greatly. According to Zheng, Liu and Zhao [2013] scarce promotion is a “promotion with products of limited availability or restricted supply created by marketing means.” The scholars point out three dimensions that scarce promotion consist of:

1. Continuing time scarcity

2. Quantity scarcity

3. Frequency scarcity

Continuing time scarcity stands for scarcity that is created by providing consumers with special offers in a limited time period. A great example that illustrates this dimension is Christmas sale, which lasts only a few days and generates time pressure for the customers, which results in planned buying shortfall.

Quantity scarcity means that “the number of potential co-owners of a product is restricted from the beginning of the market process.” [Gierl, 2010] The producer himself decides to generate quantity scarcity by making his products limited and less available. An example is a product with limited edition. However, there is also another type of quantity scarcity, which arises due to high demand of the product that does match the actual supply. Consumer might see that as a social proof and eventually buy the scarce product, because in his eyes the product is popular with a large group of people.

Frequency scarcity is a specific sort of promotion that is introduced at a rather low frequency. This might be some special event launched by an online shop. The higher the rate of such event the less attractive it becomes, since it devalues itself in the eyes of a customer.

All three dimensions of scarcity can be combined together, serving as a marketing tool, in order to attract potential customers and push them towards doing unplanned purchases.

1.4 Website stimuli that influence online impulse buying behavior

1.4.1 Personalization and customized view

Srinivasan, Anderson and Ponnavolu [2002] in their research use words personalization and customization as synonyms and define them as “the ability of an e-retailer to tailor products, services, and the transactional environment to individual customers.” The scholars point out that this ability gives an opportunity for the web stores to reduce customer's frustration in case the navigation causes troubles and confusion, because it recognizes the customer and improves his shopping experience in a way that customer desires. Besides, Srinivasan, Anderson and Ponnavolu suggest that if the web store is able to adjust or narrow the number of choices for individual online shoppers, it can decrease the time consumers spend searching for the products or services they wish to purchase. Thus, ability to personalize and customize raises the chances that consumers will discover the products or services they are looking for.

According to Floh and Madlberger [2013], e-store personalization and customization play a role almost as big as e-store design or content. They proved this by a series experiments and tests applying S-O-R model to the analysis. The correlation was named «significant»: the more options of customization were provided by an e-store, the more impulse purchases were made. The client compares his expectations of a service, finds out that everything he/she was expecting is available and then buys something. «The more the customer enjoys the actual shopping experience, the more he/she will be engaged in browsing in the e-store, thus the more products he/she purchases impulsively,» - one of the center and, most important, proven hypotheses of Floh and Madlberger's research.

1.4.2 Social presence

Khalifa and Shen [2012] define social presence in context of e-commerce as an ability of a web store to convey “a feeling of human contact, sociability, and sensitivity”. Customers with good sense of social presence while browsing a web-store that contains social presence elements will feel connected to a social actor, such as online assistant, and experience emotional satisfaction. According to Hassanein and Head [2005/2006], social presence is able to evoke pleasure. Besides, the stronger the feeling of social presence, the more engaging the virtual environment experience is [Klein, 2003]. A web store may use such social presence cues as product description [for example, a product description that includes history of the brand or the good and gives a customer an opportunity to feel involved in to it], online assistant, ability to read and write feedback on the product and so on. According to Wang, Baker, Wagner and Wakefield [2007], customers that interact with an online store that has cues of social presence will probably feel aroused and, thus, conduct purchases impulsively.

1.4.3 Telepresence

According to Steuer [1992], telepresence can be defined as the sense of being located somewhere. Seeing something desirable located close will create higher perception sense, and a potential customer will unconsciously consider buying this good.

In their research Vonkeman, Verhagen, van Dolen [2017] explore a similar concept named “local presence”, which they define as “the illusion of nonmediation” that is supported by technology and is “subjective in nature”, because it is based on the online customer's own experience. They point out that the latest development in information technology sphere allow consumer to experience a product presented online as if it was real and not virtual. The traditional way to do that for an online store is to use pictures and videos that may assist customers in building a mental model and creating an internal image of the presented good by showing people that make physical contact with the product, focusing on its design, fabrics and so on. It makes customers feel like the product is located close to them [Spence & Gallace, 2011].

Some web-stores also use such social presence tool as 3D-spin rotation of a product that allows customers to look at the product from different angles. It creates sense of touch and helps customers to experience the product as if they were in a physical store. It is a convenient way that allows buyers to gain full information about an apparel before making payments [Overmars & Poels, 2015].

Another example of telepresence is a virtual dressing room, which allows online shoppers to upload a photo on a web site and try various clothes on it before purchasing the goods. Moez [2013] in his research proved that such possibilities for customization and personalization positively affect the perception of the web store's characteristics by customers.

According to Shen and Khalifa [2012], telepresence is able to stimulate positive feelings in customers and enhance their online shopping experience by making it more imminent and irresistible. If web sites simulate direct experiences efficiently, it may lead to a higher rate of impulse buying.

1.4.4 Use of recommendation agent

Technologies have stepped far beyond just selling. Nowadays, it is a normal practice when a web store with the use of special web tool suggests goods that might suit your taste or needs. Such web tool is called a recommendation agent and it is able to influence consumers' behavior [Senecal & Nantel, 2004].

Dawson and Kim [2010] explore recommendation agents under the name of “suggestions”. They point out four cues that represent this stimulus: 1) the web store offers coordination items while a customer is examining a certain product; 2) the web store suggests non-coordination items (an item that has some similar aspects with the one being examined by a customer); 3) the web store shows items that were favored by other shoppers as well as those reviewed and recommended; 4) the web store shows the last product vied by a shopper.

Hostler, Yoon, Guo, Guimaraes and Forgionne [2011] claim that recommendation agents ease the process of promotion leading to the ease of searching aspect, which is directly connected to the pleasure of a certain customer. Besides, the scholars found out that there is a relationship between the use of recommendation agents and impulse buying behavior.

1.4.5 Use of search mechanism

Koufaris [2002] makes a very consistent analysis of this factor. The scholar points out two different types of search mechanisms: 1) nonvalue-added information that represents information, which is available to publicity, such as objective general information regarding the product. It may include the name of the product, its description, country of origin, composition and so on. 2) value-added information can be generated by web stores, third parties and consumers themselves. The scholar claims that since searching for information about the products can be fun, search mechanisms are able to make online shopping satisfying and enjoyable and, thus, make customers more pleased and willing to conduct purchases. According to Koufaris, access to information with the help of search mechanisms can provide consumers with more control over their shopping experience thanks to thorough, complicated and nondirected queries they can make. Besides, search mechanisms help shoppers to concentrate better, since they demand participation of the user and his interpretation of what he is looking for.

Overall, search mechanism as a tool is positively related with shopping enjoyment and may contribute to impulse buying behavior. Thus, a well-functioning search mechanism is also a very influential factor while making an impulse buying decision.

1.4.6 Atmospheric cues and website quality

As single stimulus, atmospheric cues and website quality are divided into three components: store content, ease of use and navigation, visual appeal (design).

· Store content

The need for clarity and accuracy of the e-content provided by a web site takes place due to the absence of physical contact with the seller or the service provider. Montoya-Weiss, Voss and Grewal [2003] define information content or e-store content as “the communicated material that appears on a Web site.” This includes details related to product or service features, price offers, return policies, order status or tracking, contact information, corporate policies and more. The scholars also proved the ability of e-store content (alongside with navigation and graphic style) to influence customer's use of the web-site and his overall satisfaction with it.

One study has found that e-content has a relationship with customers' shopping satisfaction. Korgaonkar and Wolin [1999], based on the study of 420 Internet users' motivations and online behavior, suggest that entertainment and escape are important motives for conducting Internet searches. Brown et al. [2003] found that people's online search behavior depends on their shopping motives: those, who conduct online search for recreational reasons, tend to look for more information about a product than users, who have utilitarian shopping motives. It means that e-content is not only able to reduce uncertainty and perceived riskiness of the web-site and thus boost its likelihood of use [Montoya-Weiss, 2003], but also affect users' emotional states in the online store and help to accumulate shopping enjoyment.

· Ease of use and navigation

Ease of use and navigation are quiet similar and can be hard to distinguish, because when you navigate a web site effortlessly, you consider this web site to be easy to use. Ease of use can be defined as “the perception about the extent to which the website can be browsed at ease,” while navigation is about “the organization and hierarchical layout of the content and pages in a website”. [Chan, 2017] These stimuli are interconnected and, thus, are combined into one.

Bressolles, Durrieu and Giraud [2007] define ease of use of a web site as its usability, the way the user interacts with the web site, how easy is it for him to find wanted information and how easy is it to browse. The researchers refer to ease of use as a dimension for evaluation of perceived quality of online service interactions, which was found to have a significant and indirect influence on conducting impulse purchases.

According to Eroglua, Machleit, Davis [2001], navigation of an online store is the second of the highly task-relevant cues and can be defined as an underlying structure that helps online visitors to browse through various web store sections. [Wulf, 2006] Online stores may provide such navigation aids as a site map or a guide bar, which physically could be compared to a signage in a traditional retail outlet, because they perform the same function, which is to assist a customer with moving around quickly and efficiently and by that easing the completion of the shopping goals.

Since the web environment has no human interaction, which is a key element for the traditional form of trade, the need for simple navigation has emerged. [Holloway, 2003]. According to Kang and Kim [2006], the more difficult it is to browse a website, the more mental resources are required to complete the task. This may lead to confusion and, thus, to disappointment. [Webster, 2006] On the other hand, if it is easy to browse the store, and the navigation is intuitive, comfortable and has logic, then less cognitive effort will be needed.

· Visual appeal

Van der Heijden [2003] defines visual appeal as “the degree to which a person believes that the website is aesthetically pleasing to the eye”. Visual appeal includes every element that creates the virtual atmosphere of the web site such elements as colors, general layout, graphics, logos, text, use of videos and animations, images and so on… The more appealing visual interface of a web site is, the higher the chances that it will influence customer's online shopping experience and, thus, contribute to his long-term relationship with the e-store. [Cyr, 2006] This makes visual appeal of the web site one of the most significant aspects of online environment.

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