Revenge Shopping 101: What Is It and Why Is It Important?
Consumers shop for a myriad of reasons. They often do not think about why they are making purchases or the effects of that purchase until long after the purchase occurs. However, the rationale behind revenge shopping is a bit more obvious, compared to the other psychological bases for shopping.
If they plan properly, retail businesses can set themselves up to get the full benefit of shoppers who are planning to do some revenge shopping in the upcoming months (or even years). Incorporating technology can be a good way to help shoppers fully engage in revenge shopping when they are ready to do that.
What Is Revenge Shopping?
Revenge shopping occurs when a customer who previously could not get access to certain goods or services for a period of time suddenly has access. It can also occur when customers have been deprived of other events or happenings.
The term appeared first in early 2020 when luxury goods started to see huge surges in demand after the lockdown in China. The Guangzhou Hermes boutique flagship reported that it sold worth of product on the first day of trading after the lockdown was lifted. Customers were flocking to purchase luxury items simply because they could not make those purchases during the lockdown.
Other stores have reported significant shopping increases as well. LVMH announced a growth rate of 45% after the first quarter of 2021. Hermes is up 44%, and Kering, which owns luxury brands Gucci and Balenciaga, is up 25.8%.
The concept of revenue shopping is not necessarily new. Customers have long been known to seek out specific goods or services that they had to stop receiving for a time after they are available again. They have also been known to engage in impulse purchasing after periods of deprivation as well. However, the difference today is that the surge is on a much larger, wider spread scale because of the COVID-19 pandemic.
COVID-19 and Revenge Shopping
The COVID-19 pandemic curbed a lot of spending across the globe, and retailers felt the difference in non-essential spending. Instead of purchasing “extra” items, many individuals were struggling to keep up with bills, as they lost jobs and their investments dropped in value.
However, those who were able to keep up with their regular expenses also increased their savings. That means that many people are finding themselves with extra spendable income compared to a year ago. As safety and health concerns decrease, many people see the money they have in savings and are starting to consider how to spend those funds.
Unpacking the Thought Process Behind Revenge Shopping
Some experts state that revenge shopping is the result of deprivation and a reaction to no longer having to endure that deprivation. However, others think that the shopping patterns that are focused on luxury are actually more nuanced than that.
As many people sat in their homes during quarantine periods, some have had time to think about the various items in their life and how they spend money on those items. Specifically, consumers may be shifting from cheap, breakable items that fall apart in a short amount of time to more expensive, quality items that will last for years.
Consumers may be starting to view “luxury” items as an investment, rather than just a trendy purchase that will only be “in style” for a short amount of time.
Alternatively, those reviewing this new trend note that the increased focus on luxury brands may have to do with the desire to “see and be seen” now that people are starting to feel safer about leaving their homes. Dressing the part when seeing friends and family that you have not seen for months, for example, might be driving high-end clothing and accessory purchases.
Counting on Increased Spending
In the United States, the National Retail Federation predicts that retail sales will grow between as we continue to move through 2021. This growth is a big deal, as it is the highest rate since 2004. It is also predicted despite decreases in demand in the last three months of 2020, which historically has the highest shopping rates of the year.
In January 2021, U.S. retailers saw department store sales increase by 21%. This was after a round of stimulus checks were received as well.
Many retailers are counting on this “bounce back” to keep their doors open. This boost is necessary to address the significant losses and decreased revenues that many stores have seen over the past several months. While many companies can handle a few months of losses, extended periods of time that have losses or revenue below a certain threshold can result in forced closures or drastic measures to scale back product offerings, locations, and more.
How Technology Can Help Tap into Revenge Shopping Spending
Get Direct Feedback
It is going to be difficult to predict what shoppers are going to want in a post-pandemic world. Some will continue their lower spending levels and increased savings. However, others are going to be ready to spend money as they become more comfortable being out of the home and spending their income or savings.
The best way to know what customers want is to ask them. Surveys, trend tracking, and other similar information will be vital for retail businesses to get a good feel for the type of spending they can expect from their customers. You can utilize technology to take both formal and informal surveys of your clients to get a feel for the types of merchandise they would like offered today.
The spending levels are likely to vary based on industry as well. For example, as luxury-focused spending increases, cheaper products that would have otherwise been a substitute might see a decrease in demand. Offering a wide range of products at various price points may be a good strategy to appeal to a wide variety of customers with varying financial concerns.
Address Safety Precautions
Customers are ready to start spending money again. However, that willingness does not mean that they are ready to ignore safety measures related to COVID-19. Instead, they are likely going to be focused on spending in the safest way possible. Retailers need to be ready to provide safe ways for customers to shop.
Curbside pickup, online shopping, and virtual waiting lines are all technologies that have been used widely during the pandemic. They will likely continue to be in high demand even as customers start spending more money in retail stores today.
Prepare and Track Inventory Properly
The last thing that retailers need right now is to run out of the items that customers want to buy. However, retailers around the globe are dealing with problems addressing the uptick in demand. Be sure that your company avoids this issue by not only ordering the extra product to boost your inventory but also tracking it properly.
Fulfillment methods should be evaluated as well. Products should be available across all sales channels, and you should have a streamlined way to address getting products directly into the hands of customers when and how you have promised delivery.
Start Preparing Now for Revenge Shopping Trends
Revenge shopping has been picking up across Europe, but it is not quite in full swing everywhere. Preparing now to address increased demands that come along with revenge shopping trends is a good idea.
You can work with Ombori to address your technology needs as you get ready for an uptick in sales. Ombori will be able to help you review your overall sales goals and suggest solutions to meet your needs.
Our team customizes technology to fit perfectly with your marketing scheme and tailor-makes technology solutions to target your particular audience. Contact Ombori to learn more about how we can help your business take full advantage of the revenge shopping trend.
Originally published at https://ombori.com.
