Purchase intensity
Purchase intensity is the number of items a customer sells simultaneously of a product. In other words, purchase intensity is the number of items purchased within one transaction.
A higher number of purchased copies within the same purchase has the advantage that a store or supplier is assured of the corresponding sales. Because the customer can stay ahead longer with their stock, they are not tempted to choose a competitor for a repeat purchase in the meantime. Buying larger volumes at a time can also reduce operating costs per transaction (think personnel, distribution and marketing).
There are several ways to target increases in purchase intensity, including:
- Structural quantity advantage in the form of tiered pricing, where a discount is given when more copies are purchased;
- Time-based discount promotions, within which the customer is enticed to purchase a larger number of items by benefiting only during the promotional period;
- The size of packages can also influence customers how many copies to purchase at one time. More of smaller packages will have to be purchased to arrive at the same quantity. Larger packaging forces customers to buy more of a product at one time. Price psychology also plays a role here; when customers have a choice of sizes, smaller packages are almost always priced relatively higher than more expensive ones.
The total amount a customer buys of a product in a given period of time is called the purchase volume. The purchase frequency is the number of purchase occasions that make up this.
