The pandemic has placed enormous pressure on the global supply chain, which has led to retailers warning goods will take longer to arrive than they would have before the pandemic.
This message has been distilled in recent weeks and days into attention-grabbing headlines, such as ‘start Christmas shopping NOW, retailers warn’.
Another one, is ‘Christmas is just around the corner’. Or maybe you’re seeing ‘don’t miss out!’ reminders about the upcoming Black Friday/Cyber Monday shopping period, from November 26 to 29.
While it’s a fact that the movement of goods will be slower than usual, it is not an objective fact that people need to rush, ‘get in early’ or even panic about their shopping and gift-giving as some people do.
This week we look at the sense of urgency created by warnings to ‘get shopping’ – why this happens, how it can affect us – and our personal finances – and why we need to exercise caution and practice a little healthy scepticism.
Understanding what is behind public messages from retailers
Public messages from retailers about buying anything originate from marketing department.
While it is true that good marketing identifies consumer needs and brings buyers and sellers together, as a discipline marketing falls short if it doesn’t increase sales.
Ultimately the main point of almost messages about shopping is to encourage you to increase or at least maintain your spending.
“Marketing tactics such as one time only sales offerings, promotions and discounts are all designed to get us to spend big,” says Lea Clothier, a money behaviour coach who helped design the Financial Mindfulness program.
“Tactics such as the use of time, or volume-based limitations and ‘buy now or miss out’ messages create a sense of scarcity and trigger a fear of missing out (FOMO).”
Creating a perception of scarcity is a successful way of making goods and services seem more appealing. Big companies spend millions unlocking the psychology of shoppers, because doing so is worth billions.
Generally, red flags include words, phrases and images such as:
- for a limited time only;
- 24-hour sale;
- don’t miss out; and
- any symbol suggesting a countdown, such as a clock.
The consequences of shopping with high urgency
When we are rushed into any decision, we are more likely to base that decision on emotion, rather than logic.
“Scarcity and FOMO are emotional triggers that play on our sense of not having enough and our fears of missing out and therefore not ‘fitting in’ or belonging,” Ms Clothier says.
Any financial decision made from a place of emotion or fear, particularly when spending, can bring negative consequences to our finances.
For a decision to be rational and balanced, it requires time and consideration of whether we truly need or want it, whether we can actually afford it, and whether it is planned purchase or not.
This is the essence of mindful shopping online.
When we are rushing to shop online, or we are emotionally driven to purchase, we are more likely to impulse buy.
Impulse buying is exactly as it suggests, when our impulses or urges drive our spending habits.
Impulse spending can lead to many consequences such as overspending, ‘buyer’s remorse’ leading to emotions such as guilt and shame, difficulty paying bills, financial disagreements and financial stress as well as increased credit card debit or buy now pay later debt hangovers.
These kinds of consequences will invariably create financial stress in our lives.
Financial stress is complex, but when it is a constant in our lives it can put pressure on relationships .
Mindful behaviour with money
Faced with such powerful sales and marketing strategies, it’s important to be mindful of how they can drive our spending habits.
Why? Because we much as you might trust a brand or a store, or online retailer, it is not their brief to help you avoid financial chaos, let alone build wealth. That is up to you.
What does being mindful with money mean?
We refer to it as financial mindfulness.
Financial mindfulness means being aware and paying attention to your finances, and that may mean seeking help.
The help required will vary from individuals. It may be practical financial support, or learning budgeting skills, or seeking assistance to manage the stress of money worries.
The first step to being financially aware is to determine how stressed you are by your finances.
You can do this by measuring your current financial stress using our Financial Stress Indicator, which you can access in the Financial Mindfulness app.
You can read more about the Financial Mindfulness app here and download it from the Apple Store or Google Play store.
You can also read more detail about the complex problem of financial stress here.
We also have more information about techniques to lower financial stress and stress in general.
But what about those supply chain issues?
Marketing messages often do contain universal truths, or real facts about the world, that is partly what makes them seem important.
News of supply chain difficulties in late 2021 caused by the pandemic are not fake news.
Deliveries of gifts may take more time to arrive and no-one wants to have to say ‘sorry your present is in the mail’ at Christmas.
There is a balance to be struck with online shopping – which applies any time of the year.
“The key is to plan ahead,” Ms Clothier says.
“There is still plenty of time between now and Christmas. The better planned you are, the more chances you have of being able to shop around and find the item you’re looking for.”
It can pay to have a plan “b” or “c” for gifts for your loved ones. That way you won’t feel pressured into purchasing something purely on urgency or scarcity basis.
Ms Clothier suggests getting creative about gift-giving.
There are many ways you can give a gift.
“Gifts don’t necessarily have to be product or something you purchase brand new.”
“In fact, there is a lot of research to say that the best gifts are shared activities and experiences that create memories and a sense of longer lasting happiness.”
Some of these ideas might include:
- Booking a fun holiday with loved ones;
- Teaching them to do something;
- Creating a photo album for them; and
- Making something meaningful for them.
There is also a considerable amount of research that shows how highly we value something that has no pricetag – time. So even if you are broke, calling someone regularly and making time to visit someone, listen and talk together, will almost certainly strengthen relationships with loved ones.
The Golden Rules of mindful shopping
If you are paying attention to the real purpose of marketing, open to becoming more financially mindful and to examining your behaviours with money, positive changes are possible.
You will hopefully be able to start shopping for what you really want and need rather than be dragged into buying by emotions, or hooked by urgent-sounding messages.
We’ve come up with a checklist of ‘Golden Rules’ to use when online shopping that may be useful as you try to navigate the busy shopping season ahead.
- Remember to slow down and try to operate without that sense of urgency and excitement. Even if you cannot get a particular item, remember that there are plenty of great gifts out there for everyone. You’re not going to miss out altogether.
- Be mindful of how marketing tactics such as scarcity and urgency might be influencing your purchasing decisions.
- Plan ahead. Having a list for shopping whether in person or online, and sticking to it can help avoid impulse and emotional spending.
- Set a budget for your online shopping each time you shop.
- Track your spending to ensure you stick to the amount you’ve set as your spending limit. Remember to check your bank statements.
- Shop around. There are so many retailers and competitive offers available but oddly we can easily forget this.
- If you’re not sure about a purchase – just wait! You can always add a product to the online shopping cart and come back an hour or two, even a day or two later.
- Check return policies. If you are prone to online shopping and aren’t always happy with your purchases, make sure you can return the items and get your money back.
- Check your emotional state before shopping. Don’t shop to make yourself ‘feel better’, or if you’re over-excited. Our emotions can cause us to make unnecessary or excessive purchases in an attempt to make ourselves feel better. We all like nice things, but it’s also a universal truth that you can’t spend your way to happiness.
- Don’t drink and shop. It’s a thing! Late night purchases after a few glasses of wine can lead to weak boundaries – forgetting sensible limits we made because they matter – and easily blowing the budget.
- Do a quick stocktake of what you already own before you go and purchase more. This is particularly relevant to clothes!
Being mindful with online shopping is about being awake and alert and aware of what we are doing before we do it and while we are doing it.
When we can do that, we tend to buy what we actually need or truly want and almost certainly spend less than we do when we are mindlessly spending.
And we avoid painful regret around money.
Good luck with your online shopping, enjoy!