The Journal of Asian Finance, Economics and Business

Korea Distribution Science Association (한국유통과학회)
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The Impact of Impulse Buying on Retail Markets in Indonesia

  • Received : 2020.11.20
  • Accepted : 2021.02.03
  • Published : 2021.03.30
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Abstract

This research aims to examine and analyze the impact of customer shifting behavior on the shopping emotion. Based on impulse buying, customers tend to behave recently based on the constructed variables of impulse buying, outlet ambience, hedonic shopping value utilitarian shopping value, and shopping emotion. This study employs samples/survey data of the population consisted of Asian women parents in Indonesia. The survey data of this research is based on observations using time series with cross-section/one-shot, which was done in 2019. The results indicate that variable outlet ambience, hedonic shopping value, and shopping emotion have a positive and significant impact on impulse buying. Whereas the utilitarian shopping value variable has a positive but not significant relationship against impulse buying. There is a positive influence between ambience outlets and utilitarian shopping value on shopping emotion. The variable hedonic shopping value has a negative and not significant relationship towards shopping emotion. The finding of this study suggests that both the retail stores and even the superstores must pay more attention to the design of outlet ambience to create the hedonic shopping value and eventually may attempt the attention of the impulse buying customers.

Keywords

1. Introduction

One of the changes in human life is the customer buying behavior shifting process, change also happens with the economic aspects in mind. Many companies that focus on the customer goods business have been developing to match with the customer behavior (Ramli et al., 2020). The economic growth and development of a country is also influenced by several economic activities, such as trade and customer purchase. The role of the trade sector in the national economy is very significant, both in quantity and quality (Puspaningrum, 2020; Rejekiningsih, 2004).

In terms of quantity, the importance of the role of the trade sector can be seen from the increased contribution of the Gross Domestic Product (GDP) to the trade sector in the National Income (Kussudyarsana et al., 2018). The retail industry is one of the strategic industries for the development of the Indonesian economy; in this case, retail contributes greatly to the Gross Domestic Product (GDP) and also absorbs a large amount of labor (Ramli & Soelton, 2018; Soliha & Euis, 2008).

The development of a modern retail business in Indonesia is based on the format of mass products or supermarkets which started from the first department store in Sarinah Department Store, established in 1962. In 2000 the modern retail business began to grow with the existence of several Indonesian supermarkets from various retail from foreign countries. Since then, the local supermarket with most of the local brands still remains very attractive. (Murti, 2018; Puspaningrum, 2020). According to data from the Association of Indonesian Retail Companies (APRINDO) and also the research from (Katadata, 2017a), that the number of retail outlets in 2018 has grown to 40, 000 outlets spread throughout the whole of Indonesia.

Even though the digital industries have been emerging rapidly and enormously, the local offline store remains attractive. In fact, the retail markets still provide opportunities for local and foreign companies. Based on the 2017 Global Retail Development Index data reported (Katadata, 2017b), the value of Indonesia’s retail sales has reached the US $ 350 billion. This is supposed to be above the value of retail sales of other countries in the Southeast Asia (ASEAN) region countries.

According to Southeast Asia Partner and Head AT Kearney Soo Ghee Chua, Indonesia has been the target of foreign retailers. Some of the factors are high consumption of customer goods and political stability. Still, the most attractive aspect is the high customer consumptions. This is the main reason why the Chinese retail company, Miniso, has expanded into the Indonesian market. Miniso is a small- scale retail store with the collaboration of the Japanese designer Miyake Junya and Chinese businessman Guofu, a businessman with the daily necessity’ food background. This retail store was established in 2013 and has opened more than 2, 600 outlets in a number of countries, including Indonesia. The high customers’ demand for Miniso is also in line with shopping behavior in Indonesia. The Indonesian consumer spending behavior patterns change and develop in line with the changes of needs and want behavior. (Becker & Lee, 2019; Pemayun & Ekawati, 2016; Soelton & Nugrahati, 2018; Utami, 2010). The consumer behavior that often occurs with unplanned purchases or commonly called as impulse buying (Suprapto & Dewi, 2015).

The impulse buying behavior is an enigma in the marketing world, which means that the literature and consumer’s behavior of buying change how they bought something without any plan beforehand. This behavior has impacted a substantial volume of the goods sold almost every year across a broad range of product categories (Hausman, 2000). Customers go through behavioral changes that influence their buying intention (Wuryandari et al., 2019). Today, consumers are facing different consumption options from the fast mode retailers. This consumption changes the material and energy, and hence, have environmental consequences (Bhardwaj & Manchiraju, 2017). However, researchers need to do additional investigations in future to understand the influence of the store environment on impulsive purchases (Changa et al., 2011; Dam, 2020; Mattila & Wirtz, 2008).

The research concluded that nine out of ten buyers claim that they make purchases outside their shopping list. In one of the marketing articles, it was pointed out that one of the twelve unique characteristics of Indonesian consumers is less likely to have good planning in terms of buying products (Marketing, 2016). The growth of the economy and also the needs of consumers who have strong purchasing power, has led to changes in the the spending pattern in Indonesia currently and is a reflection of the lifestyle of the modern Indonesians who are more oriented towards recreation, pleasure, enjoyment, and entertainment while shopping (Wahyuni & Rachmawati, 2018). To cater to the changed consumer behavior, businesses would require to be more sensitive to the needs of consumers, especially in the field of retail (Suprapto & Dewi, 2015).

Based on data from the Central Agency for Gross Domestic Product Statistics (GDP), household consumption expenditure for restaurants and hotels in the third quarter of 2018 based on constant prices grew 5.69% compared to the third quarter of the previous year. It was followed by consumption expenditure for transportation and communication increased by 5.68 %. Both grew higher than total household consumption (5, 01%) and consumption for food and beverage needs (5.21%). Nevertheless, food and beverage consumption still dominate around 39% of household expenditure (Katadata, 2019).

Based on this phenomenon, household consumption certainly does not escape the role of “Mom” as the driving wheel of household financial turnover. A woman not only control the purchases for her children and husband, but many more people. The influence she has triggers a domino effect, where she can influence the purchase of other families, including neighbors. Woman turn out to be the dominant decision-makers for purchasing various products, ranging from kitchen utensils, children’s clothing, over-the-counter medicines, children’s schooling, household equipment, to family holidays (Kertajaya & Hermawan, 2005).

Compared to men, women are more likely to make purchasing decisions not purely on the basis of needs, making shopping a method of celebration, buying goods without planning, and buying goods as often as possible (Frankel, 2006). A positive attitude will affect the buying interest and formed based on the combination of beliefs towards the emergence and evaluation of outcomes. (Harwani et al., 2018). It is even interesting because the shift in shopping patterns leading to this lifestyle is based on data from The Asian Parent quoted from (Kontan, 2017) in 2017 against 1, 000 women who have children claiming to shop more than 2–3 times each month. This result also shows that in each of these transactions, 6 out of 10 mothers spent an average of Rp 100,000 – Rp 300,000.

Mega Mobile is not ranked as one of the top brands. Based on the preliminary survey done on 30 customers of Bank Mega, as the respondents have pointed out, there are several deficiencies from Mega Mobile system, which eventually made them leave this service. The purpose of this research to find out why customers left the Mega Mobile banking service.

This is also in line with research conducted by (Astuti, 2013) who found from the results of an interview he did with housewives with the initials AR, saying that every time they see interesting things, they always want it to buy. Even AR said that he had purchased the same item. Still, with a different color, his interest in the item was due to a good model. Hence, he wanted to have two or three of the same items but with different colors. This is in agreement with housewives with the initials ER that ER always buys items outside the household’s needs. If they do not buy the goods then there is a sense of regret, so that ER decides to buy the goods. With the phenomenon of the still high level of unplanned purchases, it clearly becomes a real opportunity for companies to increase sales of their products, especially in targeting the Asian women’s parent market.

2. Literature Review

2.1. Impulse Buying

Most consumers in Indonesia indulge in unplanned behavior and want to act in the last minute (Miranda, 2016). During the shopping time, they often become impulse buyers. Impulse Buying can occur when an individual experiences a sudden feeling of urgency that cannot be resisted. This tendency to spontaneously buy can generally result in purchases when consumers believe that the action is natural (Solomon, 2012). Impulse buying has been recently defined as a sudden behavior, hedonically complex purchase behavior in which the rapidity of the impulse purchase precludes any thoughtful deliberation of alternative or future implications (Sharma et al., 2010). According to Rahmasari and Lisda (2016), impulse buying is the process of purchasing an item, where the buyer has no intention to buy beforehand; it can be said to be purchase without a plan or instant purchase.

According to Merugu and Vaddadi (2017), impulsive buying behavior is a purchase that is done without much thought and is done without involving many evaluations of different things such as needs, affordability, prices, and others. The tendency to buy spontaneously eventually results in a purchase when the person feels appropriate to act impulsively. Impulse buying can also be described as a different purchase, fun and such purchase behavior uses more emotion than logic, and is characterized by decision making that tends to be fast and can be subjective and apply right away (Andriyanto et al., 2016).

2.2. Shopping Emotion

The study of shopping emotions has taken the view that the retail environment aroused emotions among buyers (Zhou & Wong, 2004). The psychological approach put forward his view of human behavior that human behavior is influenced by the environment. Emotions are cognitive responses, feelings, and actions that appear due to certain stimuli (Andriyanto et al., 2016). According to Park and Lennon (2006), emotions affect mood, which is an important factor of consumers in purchasing decisions. The feeling or emotion factor is a temporary construct because it is related to a particular situation or object.

According to Solomon (2012), a person’s mood (emotional) or psychological condition at the time of purchase can have an enormous impact on what he buys or how he values his purchase.

2.3. Utilitarian Shopping Value

Utilitarian value is the value that is considered objectively and rationally (Hanzaee & Rezaeyeh, 2013). In another sense, Setiadi (2003), states that utilitarian shopping value is a motive that encourages consumers to buy products because of the functional benefits and objective characteristics of these products and is also called rational motives. To attract consumers whose motive for shopping is utilitarian, companies can provide a variety of daily need based on the benefits of these products more varied, both in terms of price and choice or completeness of the product.

2.4. Hedonic Shopping Value

Hedonic comes from the Greek language, which means, meaning pleasure (Poluan et al., 2019). Hedonic shopping value plays an essential role in Impulse Buying. Therefore, consumers often experience impulse buying when driven by hedonic desires or other causes outside economic reasons, such as pleasure, fantasy, social, or emotional influence (Darma & Japarianto, 2014). According to Prasetya et al. (2016), hedonic shopping value behavior is a picture of an instrument that directly presents the benefits of a shopping experience as well as pleasure; hedonic behavior is reflected as an intrinsic value that describes the experience of individuals in shopping. The same thing was also expressed by Putri et al. (2017), which stated that hedonic shopping illustrates the value of shopping experiences, including fantasy, censorship, stimulation, excitement, pleasure, curiosity, and delusion of excitement.

2.5. Outlet Ambience

One of the triggers for the birth of impulsive shopping habits is characterized by shop characteristics. The atmosphere of the store and impulsive buying both have a relationship with consumer buying behavior and persuade consumer buying patterns. It is recognized that when making a purchase decision, consumers respond more to the core products and services offered. So, purchasing environment, more specifically the atmosphere of the store, is more important in purchase decisions rather than the product itself. According to Utami and Utama (2017), the outlet ambience or store atmosphere is a combination of physical characteristics such as store architecture, layout, lighting, display, color, temperature, music, and overall aroma will create the image in the minds of consumers. According to Ramankutty et al. (2014), the atmosphere of a store is a particular shopping situation that is very important to encourage purchases. A similar sentiment was also conveyed by (Ratnasari et al., 2015; Soelton, 2018) which stated that ambience outlets were in and outside of the store environment, some of which were lighting, colors, smells, and music that were made so visibly by entrepreneurs to influence consumers.

3. Method

This research begins with the activities of identifying problems at the research site, conducting problem formulation, and gathering basic theories to strengthen the foundation of each variable. Furthermore, the preparation of data collection methods, instrument preparation, and testing techniques are carried out. Considering the characteristics of the existing population and the purpose of this study, the sampling technique in this study is purposive sampling, namely the respondents’ determination from the population with specific criteria.

OTGHEU_2021_v8n3_575_f0001.png 이미지

Figure 1: Research Framework

This study used a quantitative approach in which the survey through a questionnaire method using the Partial Least Square (PLS) methodology and descriptive analysis using SPSS Statistics 25. The population in this study is the Asian Women’s parents in the Greater Jakarta Area. PLS is used as an analysis tool to determine the minimum sample that is repressive in accordance with (Hair et al., 2010). That depends on the number of indicators multiplied by five to ten. Referring to these provisions, the number of samples in this study was 44 indicators multiplied by 5, then the number of samples became 220 respondents.

4. Results and Discussion

4.1. Results

Seeing the value of R Square (R2), which is a test for the Goodness of Fit (GoF) Model. In assessing models with PLS, one begins to see R Square (R2) for each dependent latent variable. According to Chin (1998), the values of R square are 0, 67 (strong), 0.33 (moderate) and 0.19 (weak). The relevance of the predicted value (Q squared) at 0, 02 (small), 0.15 (medium) and 0.35 (large). Testing Goodness of Fit Structural models in the inner model using predictive relevance (Q2). Q-Square (Q2) value greater than 0 (zero) indicates that the model has a predictive relevance value.

Table 1: Goodness of Fit Model (GoF)

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In this case, the measurement model analysis aims to test the validity and reliability of each dimension and the indicators used to measure each of the previously constructed variables. Analysis of the measurement model can be explained by explaining the discriminant validity value by looking at the square root value of Average Variance Extracted (AVE) with a suggested value above 0.5, loading factor (> 0.5), building validity, and composite reliability (Cronbach’s Alpha > 0.70).

The value of R2 indicates that the criteria are strong. It is concluded that the proposed model is supported by empirical research in which the model is classified as an appropriate model. Likewise, the AVE values are > 0.5, which indicates that all variables in the model meet the discriminant validity criteria. The second value of composite reliability and Cronbach’s Alpha for each variable is > 0.70 (above 0.70), which means that all variables studied are classified as reliable.

The measurement results based on analysis of data processing on dimensional models based indicators show that the overall indicator is processed on top of that is in Table 2 were classified as invalid where the majority of value loading factor is greater than > 0, 50 (over 0, 50).

Table 2: Loading Factor between Latent Variables and Dimensions

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4.2. Discussion

The influence of outlet ambience towards impulse buying

Based on the hypothesis test in this study, the results obtained t-statistic Outlet Ambience value of impulse buying of 2.820 and the value of the original sample of 0.214. Value t-statistic is more substantial than the value of the t-table is 1.96, and the value of the original sample shows the value positive; this result indicates that influential ambience outlets positive and significant impact on impulse buying. Positive values in the original sample indicate the direction of a positive relationship between the ambience outlet on shopping emotion of the woman’s parent consumers in Miniso. On variables outlet ambience towards Shopping Emotion, the results of the t-statistic value of were obtained 2.551 and the value of the original sample of 0.139. The value of the t-statistic is more substantial than the value of the t-table is 1.96, and the value of the original sample shows the value positive; these results indicate that the outlet ambience is an influential positive and significant effect on shopping emotion.

Table 3: The Result of Hypothesis Testing

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The influence of hedonic shopping value towards impulse buying

Based on the hypothesis test, the effect of hedonic shopping value on impulse buying obtained the t-statistic value of 2.270 and the original sample value of 0.22. The t-statistic value is greater than the t-table value that is 1.96. The original sample value indicates the value positive; this result shows that hedonic shopping value is an influential positive and significant impact on impulse buying of the women’s parent consumers in Miniso. To test the hypothesis between hedonic shopping value and shopping emotion, the original sample value is equal to –0.026 and t-statistic for 0.592. The value of the t-statistic that is smaller than the value of the t-table is 1.96, and the value of the original sample is negative. The result shows that hedonic shopping value effect negative and insignificant towards shopping emotion of the woman’s parent consumers in Miniso. Based on the hypothesis test of the influence of utilitarian shopping value on impulse buying, the results obtained a t-statistic value of 0.626 and the original sample value of 0.049. The t-statistic value is smaller than the t-table value that is 1.96. The original sample value indicates the value positive; this result shows that Utilitarian shopping value is influential positive and insignificant towards impulse buying in the woman’s parent consumers in Miniso. However, to test the hypothesis between utilitarian shopping value to Shopping Emotion shows that the value of the original sample of 0.668 and the value of t statistic of 16.652 and the value of t-statistic of the more substantial than the value of the t-table is 1.96. The value of the original sample shows the value of a positive. These results indicate that utilitarian shopping value is an influential positive and significant impact on the shopping emotion of the woman’s parent consumers in Miniso.

The influence of utilitarian shopping value towards impulse buying

Utilitarian shopping value is influential positive and not significant to impulse buying. This means that the higher the utilitarian shopping value of the woman’s parent in Miniso, it is not necessarily an increase in impulse buying in Miniso. Then the opposite condition occurs; the higher the utilitarian shopping value of the woman’s parent in Miniso, the higher the level of shopping emotion experienced will be higher. Then it can be concluded that there is a positive and significant effect between utilitarian shopping value on shopping emotion of the woman’s parent consumers in Miniso. And finally, the results of this study indicate that shopping emotion is an influential positive and significant impact on impulse buying of the woman’s parent consumers in Miniso.

The influence of shopping emotion towards impulse buying

Furthermore, based on the hypothesis testing the effect of shopping emotion on impulse buying, the results obtained a t-statistic value of 2.428 and the original sample value of 0.190. The t-statistic value is greater than the t-table value that is 1.96. The original sample value indicates the positive value; this result shows that influential shopping emotion has a positive and significant impact on impulse buying of the woman’s parent consumers in Miniso.

The ambience outlets towards impulse buying

The results of this research show that ambience outlets have a positive and significant effect on impulse buying. This means that the better the ambience outlet owned by Miniso, the higher the level of impulse buying consumers in Miniso. The results of this study also show that ambience outlets are influential positive and significant effect on shopping emotion. This means that the better outlet ambience owned by Miniso then it also influences the woman’s parent shopping emotion consumers in Miniso. From this result, we can conclude that the role of the ambience outlet for retail is very important because the atmosphere of the store that is formed will indirectly influence consumer behavior.

5. Conclusion and Implication

The aim of this study is to analyze the impact of shopping emotion that influence impulse buying based on the independent variable of outlet ambience, hedonic and utilitarian shopping value. Based on the analysis of the data and the discussion that has been put forward, it can be stated several research conclusions as follows:

1. The ambience of the outlet variable has a positive and significant effect on impulse buying and shopping emotion of the woman’s parent consumers in Miniso. This means that ambience outlets are one of the critical factors in building impulse buying decisions in Miniso. In addition, the outlet ambience also influences to create shopping emotion for consumers. So that if the ambience outlet level getting better, then impulse buying and shopping emotion will get better.

2. The hedonic shopping value variable has a positive and significant effect on impulse buying on the woman’s parent consumers in Miniso. That means hedonic shopping value is one important factor in influencing impulse buying. When the level of hedonist shopping in Miniso increasingly high, then the level of their impulsive spending is also increasingly high because it is influenced by values that are in the consumer. But on the other hand, there is a negative and insignificant influence between hedonic shopping value on shopping emotion. So, in other words, there is no significant effect if the value of hedonic shopping is increasing on shopping emotion.

3. The utilitarian shopping value variable is influential positive and not significant to impulse buying. That means, the higher the utilitarian shopping value of the woman’s parent in Miniso, it is not necessarily a significant increase in impulse buying in Miniso. Because basically, the value of shopping that is built based on awareness and in accordance with the value of usefulness for a product that you want to buy. Meanwhile, the influence between utilitarian shopping values on shopping emotion has a positive and significant relationship. That means utilitarian shopping value has an important impact in increasing shopping emotion. So, when the utilitarian shopping value increases, it will have an effect on increasing the woman’s parent shopping emotion in Miniso. This proves that the use- value is more advanced than the woman’s parent to judge a product.

4. The shopping emotion variable has a positive and significant effect on impulse buying. That means shopping emotion is one important factor in influencing impulse buying. Increasingly high levels of emotional shopping the woman’s parent then the level of impulse buying will be higher.

The study of this research has generated several theoretical and practical implications such as:

1. Miniso Retail Company, especially in the Jabodetabek area, are expected to continue to be able to maintain and increase the outlet ambience variable. Because it is proven that a good store atmosphere can affect shopping emotions and impulsive buying behavior of the woman’s parent consumers in Miniso.

2. Miniso is expected to pay more attention to the behavior of married female consumers, in this case, the woman’s parent who shops in Miniso. Because it is proven that the impulsive level is not only experienced by teenage women but also women who are adults and already married. Hedonic shopping value is one of the other factors that can influence the impulse buying behavior of the woman’s parent consumers in Miniso.

3. Miniso is expected to further improve the quality and quantity of goods that have a use-value or benefit, especially for the needs of the woman’s parent. Because based on the results of this study, it was found that although the utilitarian shopping value does not directly influence the impulse buying of consumers in Miniso, the utilitarian shopping value has the highest test value that influences the shopping emotion of the woman’s parent consumers in Miniso. Where in this case, the use-value of an item remains a woman’s parent consideration in determining the purchase decision of a product, but the use-value of a product plays a role in increasing positive emotions such as happiness and happiness, which in this case, shopping emotion will help influence the woman’s parent directly in making impulsive buying decisions.

This research may not cover all variables and issues that might be encountered by the impulse buying discussion. So that in the future, if there are researchers who want to examine impulse buying behavior, especially the woman’s parent, they can use other variables outside of this study with a wider area of respondents.

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