How Social Isolation is Influencing Our Buying Habits

Every year, American spending makes up roughly 70% of the U.S. economy. The Federal Reserve splits this spending into two categories: non-discretionary and discretionary. Non-discretionary expenses include necessities like food, medicine, housing, and clothing, while discretionary spending covers leisure and entertainment. At the end of 2019, consumer spending reached $13.4 trillion, fueling optimism about the future. But then, the unexpected happened.

As the coronavirus spread globally, governments enforced lockdowns on non-essential businesses, forcing millions of people to work from home and homeschool their children. This sudden change disrupted our routines and reshaped our spending habits. So, how has this impacted our purchasing behavior? Are we spending more or less during these uncertain times? Let’s explore the changes.

The Rise of Impulse Purchases

With our usual social interactions limited, many of us have experienced heightened anxiety and depression. To cope, some people have turned to online shopping as a form of retail therapy. It’s a way to regain a sense of control in our lives. This trend has been reflected in the surge of orders from Amazon, online clothing retailers, and grocery stores across the nation.

However, this spike in online spending has created logistical challenges. Delivery times have slowed, and warehouses are struggling to keep up. Amazon, for instance, is actively recruiting thousands of new employees to handle the increased demand.

Stockpiling Essentials

In the early stages of quarantine, panic-buying became widespread. Items like toilet paper, bottled water, Clorox wipes, and hand sanitizer disappeared from store shelves almost overnight. Grocery stores responded by imposing purchase limits, yet empty aisles persisted in many areas.

Historically, stockpiling occurs during emergencies, such as hurricanes or blizzards. However, the scale of this behavior during the pandemic was unprecedented. People filled their carts with perishable goods like meat, milk, and bread, as well as non-perishables like frozen meals and pizzas. These buying patterns have shifted significantly and continue to evolve.

Materialism in Crisis

According to Psychology Today, anxiety surrounding social distancing and mortality often leads to increased materialism. During crises, individuals may seek comfort in luxury goods as a way to maintain a sense of wealth and security. For example, purchasing a high-end Alfa Romeo or carrying a designer bag like a Hermes Birkin isn’t necessarily practical during a pandemic, but it can provide psychological reassurance for those who can afford such luxuries.

This type of spending isn’t driven by functionality but rather by the symbolic meaning attached to the product. It serves as a status symbol or a source of emotional support during turbulent times.

Changing Shopping Habits

With physical stores closed indefinitely, consumers are increasingly turning to mobile apps and e-commerce platforms to meet their needs. While this shift reduces the social aspect of shopping, it allows people to practice safe social distancing and helps curb the spread of the virus.

Restaurants have also adapted by leveraging food delivery apps like UberEats, GrubHub, and DoorDash. These platforms enable restaurants to stay operational and serve their communities as essential businesses, offering carry-out and delivery options.

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