The pandemic has meant we are all staying in a bit more and has prompted a flurry of online spending but what is behind this spending spree. Are they all essential purchases, or is there more behind this.
What have we been spending our cash on?
Mintel’s January 2021 consumer behaviour tracker shows that 53% of adults are shopping more online now, than at the start of the pandemic. Britons have spent £40.6bn online on non-essential items during lockdown – about £770 a person. Takeaway food and drink were the most popular purchases, followed by clothes and plants. Couriers are struggling, there is a cardboard shortage and online retailers, particularly Amazon, have seen record rises in their profits.
We are not equal in the pandemic
The pandemic has been financially devastating for many people, but some of us, the last 11 months have proved unexpectedly lucrative. Research from the Bank of England, found that 65% of households had not experienced a change to their income from pre-pandemic levels. Whilst a huge number of people have lost their jobs and are struggling, many others have kept their jobs and aren’t going out, or commuting, so they’re feeling much more flush than normal and are spending their money online. But why are they shopping? Do they need these items or as they shopping due to boredom, or other emotional issues?
Emotional spending and why we do it
This type of shopping, is called emotional spending and is influenced by how you feel in a certain moment. When we purchase something, you get a little rush of dopamine that gives us a sense of control or a happy feeling. Goodies arriving daily are a welcome distraction from life and the pandemic, a little treat for us all.
Emotional spending can also be triggered by work pressures and stress. Also, we’ve all been spending a lot more time at home so we’re more aware of our surroundings and we want to make those surroundings nicer.
For parents trying to juggle work with the pressures of home schooling young children, emotional spending can also be a way to mitigate guilt that some parents are feeling. Parents find themselves allowing their children to watch more tv or play more computer games than we would usually allow and there are the feelings of guilt about working too much. Working from home can be more flexible but it can also result in many of us blurring the lines between working and not. Working from home makes it easier to sneakily check emails more frequently, then if we weren’t working from home. We all have to be careful to maintain boundaries when we are working from home.
Much of our emotional spending is fuelled by social media, we are spending more time on line and we see something, it looks fun, but do we really need it?
Emotional spending can also be fuelled by quick and easy-to-access credit. Buy. Now pay later companies have sprung up and they make it even easier to purchase items that if we’re really honest, we can’t afford. Many emotional shoppers do not think about their purchases in a meaningful way, it’s so easy, you don’t even need your card to hand if you use Paypal, it’s all stored and Paypal is integrated into many websites, making it easy to pay. E Commerce is designed to make it as easy as possible for your cash to be spent.
How can we break the cycle of emotional spending?
Every day a new parcel arrives for some of us, so many parcels and we lose track of what we have actually ordered and retailers know exactly when to target us so we spend more. Banner ads that follow consumers across devices trap us in a “sales funnel. The only way to exit the funnel is by purchasing the item.
The reason we are buying so many items online is simple: we are online more than ever. In April, Britons spent an average of four hours and two minutes online. It is a straightforward equation: more time online means more time to shop.
There are ways to resist the sales funnels simply by clearing the cookies on your computer. Unsubscribe from email marketing letters and unfollow accounts that tempt you to spend mindlessly. Reintroduce the friction into online shopping by deleting your card details from your favourite sites which means you actually have to find your card to make a purchase.
Start spending in a way that feels purposeful and become more aware of your needs versus your wants. Make a budget, determine the amount of money you will allocate to discretionary spending – and stick to it. Sleep on all purchases for at least one night and actually question whether you need the item or not and then make the decision. Your bank balance will thank you!