COMPARATIVE STUDY ON THE IMPULSIVENESS OF ONLINE BUYERS

Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Over the years, the internet has grown to play a very significant role in people’s lives.
With social media gaining a particularly huge boost in popularity upon entering the 21 st
century, it has certainly continued to its way to becoming a natural aspect of everyone’s
day-to-day life. To this day, the internet keeps on achieving new heights; being one of
the most transformative and fast-growing technologies.

According to statistics, the 413 million internet users in the year 2000 quickly surged
into a billion in 2005. That’s a 142% increase in users in the span of just five years. As
of 2016, 3.4 billion people are online and by 2019, Asia became the region with the
largest number of online users – over 2.3 billion in count. Now, in the latest count in
October 2020, almost 4.66 billion people are active online users, which amounts to 59%
of the global population. (Johnson, 2021).

By definition, e-commerce or electronic commerce is the buying and selling of products

or services via the internet. It was invented in 1979 by entrepreneur Michael Aldrich in
the United Kingdom and by 1994, the first online transaction was made. Today, over
75% of the population shop online at least once a month – with 43% of shoppers
research products via social networking sites. With the continuous growth of e-
commerce websites which are widely available in mobiles, it is expected that by 2023,
22% of the global retail sales will be coming from online shops – boosting its revenue to
$740B. (Estay, 2020).

In relation to the immense popularity of online shopping, the concept of impulse buying
quickly made itself known in the current situation we are in. It is defined as the tendency
of a customer to buy certain products without proper planning and regardless of whether
they need them. Impulse buying is certainly a sales driver for all e-commerce
businesses and therefore, highly encouraged by sellers. By 2020, 84% of online
shoppers have admitted to buying products on impulse which represents 40% of all the
money businesses are raking in. In addition to this, 52% of impulsive buyers are
millennials which makes it possible that age plays an important role in their poor
impulse control. (Saleh, 2020).

Background of the Study

Nowadays, modern technology is slowly innovating, becoming widespread and

made our day-to-day tasks easier, especially with the help of the internet — where you
find solutions to some problems and seek advice and read opinions. Internet helps us to
communicate with everyone across the globe no matter how far they are. Internet and
gadgets as a medium for communication help create social media apps that we use
today such as Facebook, Twitter, Yahoo, Gmail, and Instagram.

According to senate.gov.ph, The Philippines has been called the "TEXT" capital
of the world since 2002 due to the large volume of Short Messaging System (SMS)
traffic exchange in the country. It has been estimated that the number of cellular phone
subscribers in the Philippines reached over 23 million and is still growing at a rapid rate.
After several years, the apps mentioned have become mainstream to people mostly
teens to adults. As social media apps emerge, people also found a convenient way to
shop online and become easier the way we deliver messages and receive them.

According to paymaya.com, a report released by We Are Social and Hootsuite in

January 2019, 71 percent of the country’s more than 107 million population use the
internet, and of these users, more than 70 percent admitted to buying something online
within the last 3 months. With the millions of Filipinos who can access the internet, we
can say that online shops can also be accessible to anyone. Online shopping websites
and shopping apps are also taking over alongside the rise of social media apps in our
country. One of the examples of leading online shopping apps available online are
Shopee and Lazada who currently has 10 million downloads and 100 million downloads
respectively. According to aseanup.com Shopee and Lazada are also the two leading
online shops in the Philippines. Shopee Philippines, an important player in the “mobile-
first” Philippines, Shopee is a primarily mobile, diversified online shop that also provides
a regular web experience. A leading platform in Southeast Asia, Shopee is also present
in Singapore, Malaysia, Thailand, Indonesia, Vietnam, as well as in Taiwan. Lazada, on
the other hand, is the leader of e-commerce in the Philippines by far, also present in
Indonesia, Malaysia, Singapore, Thailand and Vietnam, Lazada is an online department
store and marketplace for retailers to sell their own products. Founded in 2011 by
Rocket Internet, the Chinese e-commerce giant Alibaba acquired a controlling stake in
Lazada and its operations in Southeast Asia in 2016.

According to interaksyon.philstar.com, Online shopping has been a growing

craze in the Philippines in the past few years. A study conducted as early as 2015 found
that 9 out of 10 Filipinos preferred online shopping.

The same study found that convenience, cheaper prices, and special deals were
the leading reasons for the respondents’ preference for online shopping. Aside from the
reasons mentioned, social influence and advertising are also some of the reasons why
people are becoming impulsive on shopping online. Social media as an advertising tool
contributes to consumers' buying decisions. According to searchenginewatch.com, Due
to the rise of online shopping and the amount of time people spend on social media,
social media impacts consumer buying decisions.

Therefore, for this research, the researchers aim to answer whether there is a
correlation between the age of consumers and their impulsiveness when it comes to
buying in online shops or not.

Theoretical Framework

The Hawkins Stern Impulse Buying Theory was proposed by Hawkins Stern in
1962. It is contrary to other theories regarding consumer behavior because while other
theories focus on rational action, Stern heavily believed in the idea of impulse behavior.
Stern explained that impulse buying is largely influenced by outside forces rather than
proper decision-making. He also argued that impulse buying fits alongside rational
purchasing, which together depicts the whole picture of the average consumer.
 There are four types of impulse purchases that Stern established. The first one is
the Pure impulse purchase. These purchases are made when a certain product has an
inviting wrapping or when a magazine has a colorful cover. These are the types of
products that are placed near checkout counters and consumers will be attracted to
buying it even though it’s out of their normal buying behavior.

Second is Suggestion impulse purchase. These purchases are made when for
example, a consumer is hungry and sees a protein bar next to the checkout counter.
The consumer will start to rationalize and ends up buying a piece, thus, making an
impulse purchase.

The third one is Reminder impulse purchase. These are made when for example,
a customer decides to only buy hotdogs but hotdog buns are conveniently placed next
to them. This will provoke a thought to buy hotdog buns as well.

The last one is Planned impulse purchase. These are made when a consumer is
triggered by an offer or by low prices. (Riekkinen, 2017).

This theory predicts consumer behavior, how consumers make purchasing

decisions and show marketers how best to capitalize on their behaviors. It truly shows
that impulse chases are an important part of a consumer’s buying patterns. (Four
Consumer Behavior Theories Every Marketer Should Know, 2020)

Pure impulse
purchase

Suggestion Consumption Impulse purchase

impulse purchase impulse decision

Reminder impulse
purchase

Planned impulse
purchase
Figure 1. Types of Impulse Purchases
Conceptual Framework

The researchers will put together a list of questions for online shop consumers
and will be given through social media sites. The questions given will be about their age
and their impulse purchases. The researchers will draw out a conclusion from the data
they will receive.

INPUT PROCESS OUTPUT

 Administrati
 Respondents’
on of survey
Profile forms
- Age
 Data
 Rough idea of Collection

the number of Determining if

there is a
 Data correlation
items a consumer
Analysis between age and
impulsively bought impulsive buying

 Interpretatio
 The type of
n of the
items that were results

impulsively bought

Feedback

Figure 2. Research Paradigm

Statement of the Problem

The objective of this research study is to find out whether there is a correlation between
the age of a consumer and their impulsiveness when buying products online.

Its main goal is to also answer the following questions:

1. Profile of the respondent.

2. What causes people to buy things impulsively?

3. What age range has the greatest tendency of making an impulse purchase?

Scope and Limitation of the Study

The main focus of the study is centered around the age of online consumers and
the number and type of products they often impulsively purchase. It is also limited to
that. Therefore, the coverage of the study does not go beyond determining if there is a
correlation between the age of buyers and their impulsiveness. One of the objectives of
this research is to enlighten the target demographic (consumers and sellers) about the
topic and hopefully give them an insight that would be helpful.

Significance of the Study

The researchers hope that this study will be useful to the following individuals:

Consumers. The study will give buyers a clear idea of their impulsive purchasing
behavior and how sellers benefit from it. Therefore, impulsive buyers who are spiraling
out of control can be more aware of their actions and think twice before buying
something that is out of their shopping list.

Sellers. The study will also give sellers clarity when it comes to consumer behavior.
This way, they can sort out their products accordingly and can develop their strategies
further if they can determine the patterns in the consumer’s purchasing decisions.
Researchers. the study will help them have a theory on the factors affecting buyers’
impulsive behavior that researchers were not able to explore. Thus, a new study on the
impulsive behavior of buyers may be arrived at.