When coronavirus hit out high streets, nobody could have identified the effect that this would have on our spending trends and, more importantly, the psychological impact of spending online due to our emotional splurges. The reality is that a lot of us are sat in our rooms with more clothes that we need, waiting for that day where we can finally wear that beloved top, which we bought months ago. Not to mention the tinned food and toilet paper that we’ve finally come to use up.
With online ads permeating our digital networks and influencers with boxes and bags of new ‘things’ to try, the idea of spending money on materialistic items punctuates our mind, computers, phones, and life.
While there is a strong correlation between spending money on things we desire and happiness, is it really the things we buy that excite us, or the idea that we are worthy of spending? Perhaps even the knock at the door with your new Gym Shark leggings that ‘you’ve wanted for ages’ gives you a burst of energy. Or maybe that new book you desperately wanted to read thrilled you so much so you read the blurb. Whatever is your reasoning, it has been inevitable during this pandemic. Emotional spending could be caused due to many reasons: with rules changing, regulations confusing your sense of freedom and the isolation and mental health that we have encountered, we want something to make ourselves feel better ─ even if it is for a split second.
But what is the reality to emotional spending?
Data from Barclaycard found that British people have spent over £40 billion on online and non-essential items during lockdown. This equates to nearly £800 per person. Over one third (36%) of these spenders bought clothing, beauty, and accessories, with this figure nearly reaching 50% for women. 13% of consumers spent their money on sports and outdoor gear, with men tripling the amount compared to women, spending on average £941. Other popular categories Britons spent money on over lockdown consisted of home décor, entertainment/schooling equipment for children, technology, and things for pets.
Although this may seem like an impulse, a third of buyers found that the products which they bought made lockdown more enjoyable. When it comes to weighing up happiness and joy against misery during a difficult enough time in itself, you cannot really put a price on happiness.
The impact of these sales on retailers and companies:
Unsurprisingly, Jeff Bezos has become the second richest man in the world, according to Forbes’ list, having a net worth of $195.9 billion since lockdown. With Amazon reaching a net sale of $125.56 billion in the final quatre of 2020, a 43.6% increase from the same quarter in 2019, it is safe to suggest that many consumers are spending their money at Amazon.
Online shopping websites, like ASOS, have done anything but plummet. For example, the number of active users on ASOS customers rose to 23.4 million, resulting in a huge influx of profits ─ an increase of 329%.
Although it is clear some shoppers turned to online fast fashion sites during the pandemic, Depop buyers and sellers have increased dramatically. Depop’s sales increased by 54% which, arguably, has had a positive influence on the fashion industry, but perhaps not. It is possible that these sellers bulk-bought from fast-fashion sites, increasing their sales and profits, ‘modified’ these items, and resold for high prices, labelling clothes and accessories as ‘y2k’. Nevertheless, this increase in sales supports the argument that emotional spending was and is still at a peak due to lockdown.
Is emotional spending an issue? If yes, how do I control it?
Emotional spending may cause difficulties when you quickly spend more that what your budget can sustain, which, in turn, has repercussions on your wallet. But it can be triggered by a variety of reasons, and these could have been heightened due to lockdown. Emrana Khatun states, in an article published on The Guardian, that “when [she is] stressed or [has] lots of deadlines at work, buying things online is a nice release”. Jonathon O’Neil, on the other hand, wants something to fill up his time and has become “an investigate shopper”, especially for “offers!”.
Bankrate suggests that there are also a range of emotions, such as sadness, boredom, fear, and jealousy, that could trigger you to want to spend more.
Controlling emotional triggers diverges for everyone as we react to situations and environments differently. There are sites, such as Bankrate, that offer solutions to controlling these splurges, but if emotional spending is adding more positivity into your life, is it really a problem? Or perhaps trying other activities, like going for daily walks, doing yoga, or even having a bath, might make you feel just as happy as when you press confirm order. That is for you to decipher.
Overall, if you are someone who has saved more this lockdown or even if you’re someone with items still with their label on, well past their return policy, emotional spending has become a craze and a habit for many of us. If you feel that you need financial support, there are services out there to assist and help you. Don’t feel negatively to ask for help.