Has the pandemic pushed us to have a healthier relationship with shopping?
With the world wide pandemic impacting millions of people’s jobs and livelihoods, now more than ever we need a healthy relationship with our money.
I spoke to two qualified psychologists to find out about the human psychology behind shopping and if lockdown and the pandemic have made us any smarter about our spending habits.
What is happening in the U.K.?
The pandemic and lockdowns has meant that spending has declined. According to a study by AA Financial Services, 85% of UK adults have spent less during lockdown. Data released by the Bank of England also revealed that personal bank deposits have grown by three times the recent average.
Millions of people no longer travel to work, there are people who have lost their jobs or are working reduced hours or are on furlough and so most of us cannot afford to splurge on luxuries. A survey conducted in June 2020 by market researcher, Opinium, showed that living in difficult times has made us much more wary about how much we spend. 32% of those surveyed said they would go out less in future; 31% said they would cut back on impulse spending; 30% said they would buy fewer clothes; 21% said they would buy fewer “little treats”; 15% said they would spend less on food during the day.
Chartered Psychologist Dr. Stephen Skippon, who runs an independent therapy, coaching, and wellbeing practice called Lemons to Lemonade, told me that shopping is also a social activity but now people aren’t really shopping with one another because of the risk social contact poses.
We seem to be much more focused on buying essentials than non-essentials with only a minority spending more on non-essentials during lockdown than they usually would.Online grocery shopping surged to 70.3% in 2020 and we spent 15.6% less on clothing. Dr. Skippon noted that part of the reason why clothing shopping has gone down is because clothing is not functional, it is a symbolic purchase. “We buy clothes to say something about us. Lockdown means less social contact and so clothing matters less. There is no audience to give a message to about you” he explained.
However, Dr Cathrine Jansson-Boyd, a consumer psychologist who is currently teaching consumer and social psychology at Anglia Ruskin University, notes that although clothing spending in high fashion has gone down, affordable online retailers’ sales have rocketed. “People who are money conscious will typically visit sites like Boohoo” Cathrine told me. Boohoo’s front page on their website show models in tracksuits, joggers and comfortable clothing. The company knows that people are working from home and are in lockdown and so there is a demand for this type of clothing. People want to feel and look fashionable even if they are at home and comfort is the key thing consumers are looking for.
This means that although overall we are saving more we can still fall into the trap of spending money items we don’t need and next thing we know the postman or woman becomes our most frequent visitor. Stores are eager to stay afloat during these challenging times so they are offering discounts, free shipping and new products to try to get us to spend money. “People can end up shopping out of boredom and if we see 25% off everything it instantly draws us in. The idea that we possibility can get a bargain activates the part of our brain connected to rewards and pleasure” she told me.
“We are stuck at home and aren’t going on holidays and so if we do have spare cash we can end up spending money on items we do not need. People are buying large expensive times like TVs. The car sale industry has done massively well. Auto Traders sales are up. People are even spending between £2000 and £3000 on dogs now” Dr Cathrine explained.
Some people still prefer shopping in store but for many of us shopping online is easy and convenient. However, the convenience can trip us up into spending more cash Dr Cathrine warns. “When you’re shopping online and the website has remembered your card so you don’t have to type the card number to make a payment it doesn’t feel like you’re spending money. When we have to physically type the number in the card machine it makes us much more conscious that we are spending money”.
What is happening in Pakistan?
Pakistan is dominated by a cash economy and so Pakistani technology entrepreneurs expected Pakistan’s use of e-commerce to be a slow phenomenon taking up to at least 3 years. However, when strict lockdowns were placed across the country in 2020, grocery orders made online and through mobile apps skyrocketed. The pandemic has pushed people in a different direction to the way they shop out of necessity. CEO and co-founder of GrocerApp, Ahmad Saeed, reported that the business in March, April and May jumped by 50 to 70% month on month and before the pandemic the app’s orders were only growing at 20% per month.
According to GrocerApp and 24Seven their sales were initially from high-income areas but they have seen a recent increase in their sales from middle-income neighbourhoods too. Customers are attracted to the lower prices and the greater variety of products that is offered online compared with small physical stores. Like in the U.K. and the rest of the world there is an increased demand for bargains. This could very well be one indicator that people are thinking about how to shop smart.
However, not everyone is convinced that online shopping will stay as popular in Pakistan. Javed Anwar the manager at Sauda Sulf Grocery Store stated “This trend [of online shopping] is not here in Pakistan yet. [For] groceries, customers have a mentality that they want to buy it themselves, with their own hands.” He received up to 250 orders a month through the store’s website during the 2020 lockdown but as the restrictions eased over the summer, orders dropped too.
Another reason why e-commerce may not last post-pandemic is that many customers do not own bank accounts and debit/credit cards. Children and many women shopping get mahana kharcha (monthly pocket money) from the breadwinner in the family instead. Even people who do own bank accounts and debit or credit cards are sceptical about using them because those who got to the e-commerce market first damaged customer trust by sending low quality or fake products to make a profit.
There are also banks that do not allow digital transactions and so customers have to pay cash upon delivery. This is a particular issue for those who cannot access an ATM. Although online shopping has increased in the country there is still a large proportion of the population who do not shop digitally. Foodpanda is well known and very popular in urban centres across Pakistan, and yet only 10% of its customers use digital payments before and during the 2020 lockdown.
Pakistani consumers are not buying clothes as much as they used to and retail businesses have noticed this. “Fashion is ultimately a discretionary product,” says Waleed Zaman, Creative Director of high-street brand Kayseria and Leisure Club. However, although people are buying less retail outlets have noticed that customers are looking for quality clothing that will last rather than fast fashion that will be worn a couple of times. In order to attract customers at the beginning of the 2020 lockdown, clothing stores like Sapphire and Junaid Jamshed offered huge discounts, some being up to 50%.
How do I control my spending?
With tempting sales enticing us to splash the cash, what can we do to develop a healthier relationship with money?
I asked Dr. Stephen and Dr Cathrine what their advice was for people who want to have a healthier relationship with money and spending. “Plan your spending, do a monthly budget, stay within constricts, prioritise what needs buying, essentials should come first. Planning is essential in these times where our income may be in precarious position” Dr. Stephen advised.
Dr Cathrine emphasises just how useful and important making a shopping list is to control our spending. “When you write a list it is almost like setting a personal contract with yourself and it keeps you focused. Don’t browse on websites unless you need something. When you shop make a list and be specific about what you want and what your budget is for the item. For example if you want a tracksuit and set the spend at £25 don’t go over that” she advised.
Online you can use the search filters to filter out anything more expensive than your budget and refine your search to just what you’re looking for so other items do not distract you and tempt you to spend money on other things. A number of budgeting apps such as simplifi and You Need a Budget can help you monitor your spending.