With lockdown restrictions being lifted in many parts of the world, consumers are heading back to stores with a vengeance as ‘revenge buying’ – or the post-lockdown spending rebound – hits high streets around the world. Consumers eager to shop in physical stores and from brands they’ve not been able to find online are driving traffic and spend as they compensate for months of lost purchasing.
But is this a long-term consumer desire? It’s unlikely. With many people losing jobs and with reduced incomes, this initial response will probably recede, evolving into a longer-term trend of revenge saving as many consumers grow increasingly concerned about the financial crisis and forthcoming recession in many parts of the world. Brands should acknowledge that ‘revenge buying’ is not a long-term strategy and should create product that consumers will want to invest in because it will last a lifetime.
Revenge Buying in Asia
Hermès brought in at least RMB19m ($2.7m) in sales on the reopening day of its flagship store in Guangzhou in April. Rare bags, including a diamond-studded Himalayan Birkin, were shipped to the location specifically for the opening. The single-day tally is believed to be the highest ever for a single boutique in China. However, this isn’t indicative of a wider or long-lasting trend, with more than half of Chinese consumers saying they have been affected financially by the crisis, according to Mintel.
In England, release of pent-up spend was already in evidence last Monday, with the huge queues amassing outside Primark stores around the country. However, UK consumers are likely to be more cautious about their spending amid fears about the impending recession – spend will be on smaller ticket items or in stores that don’t have an online offer (eg Primark) which people have missed during lockdown.
There will still be a fair amount of uncertainty about spending, even as we show signs of recovery. ‘Revenge saving’ is more likely in the long-term, as the initial buzz of post-pandemic freedom has worn off and people have become accustomed to and even enjoyed saving money during lockdown. Consumers will also be more likely to streamline and declutter due to anti-excess mindsets setting in and an eagerness to clean out their closets for financial gain.
What is Driving this Trend?
Self-gifting and pent-up desire to spend will drive the trend in the very short-term, but retailers should be mindful that this will not be a sticky behaviour and should not be relied upon to drive sales in the longer-term.
With the coronavirus pandemic affecting livelihoods and putting rational consumption into focus, brands need to focus on offering good value and helping customers to feel good as they emerge from the crisis. Brands will need to continue with strategies that saw increased online activity through the outbreak period, with engaging and interactive digital campaigns surrounding conversational and social commerce to stay on top of consumers’ minds post-outbreak
Key Long-Term Categories
There will likely be an uptick in purchasing hard luxury items which are difficult to purchase online, such as fine watches and jewellery, as well as categories such as fragrance, of which the experience of buying can’t be replicated online. There is also likely to be an upsurge in buying luxury holidays and experiences as well, once travel restrictions are lifted and the rules made more clear.
In most cases, we will find that priorities will shift towards saving and budgeting in light of the impending recession, and aspirations will move from wanting a designer handbag towards something more meaningful, such as ensuring good health and wellbeing.
Moving forward, brands should prepare for consumers who are looking to make considered purchases. Ensure your marketing and strategy is geared toward this and consider how to make the most of in-person experiences and in-store purchases to give consumers excellent service and incentive to purchase.