Socially distant Americans find comfort in retail therapy
While the novel coronavirus pandemic has changed a lot of shopping habits, one that has remained consistent is people reaching for online retail to comfort themselves when things get stressful. A new study, in fact, indicates that, with plenty of stress to go around during lockdown, therapeutic online shopping has been booming.
Fifty-eight million Americans are spending more money than normal under social distancing restrictions and 43 percent admit to having made “comfort buys” during this time to ease stress and the sense of social isolation, according to a survey by Wallethub. Entertainment (29 percent) and alcohol (23 percent) represent the largest portion of comfort purchases, but consumers are also buying clothing (15 percent), beauty products (13 percent) and electronics (12 percent) to feel better during the lockdown.
Toys (five percent) and exercise equipment (three percent) represent the least purchased comfort buys). In terms of dollar amounts, 35 percent reported spending between $51 and $150 on comfort buys, 22 percent spent between $151 and $300 and 15 percent spent more than $300. Only 18 percent, however, characterized their spending on non-essentials as “over-spending.”
How long people will continue to spend on entertainment and other non-essentials, though, could depend on the duration of the economic ripples of the COVID-19 outbreak. Ongoing mass unemployment could add to the numbers of consumers already being more careful about discretionary spending.
The current real unemployment rate is “north of 20 percent,” according to senior White House economic advisor Kevin Hassett, who spoke to CNN. The numbers of those who will be unemployed is projected to be higher in June before it begins trending downward, although there is a possibility that the U.S. will continue with double-digit unemployment numbers through November.
Credit experts have been warning customers about going too far with indulging the impulse to comfort shop during the pandemic. Paul Oster, CEO of Better Qualified Credit Management, told CBS2 New York that people should be trying to save rather than spend right now, especially given the number of people who may be experiencing reduced wages or are out of work.
- Coronavirus Shopping Survey: 58 Million Americans Are Spending More Money While Social Distancing – Wallethub
- Hassett says unemployment rate could be ‘north of 20%’ in May with possible double-digits in November – CNN
- Consumer Credit Expert Warns Of Pitfalls Of Comfort Spending While Home During Coronavirus Pandemic – CBS2 New York
DISCUSSION QUESTIONS: In what ways, if any, have you seen consumers change how they use retail therapy since the outbreak of the novel coronavirus? Do you expect the practice of buying things to feel better to increase, decrease or remain the same over the next six months?