Almost 40 years later, Madonna’s words still ring through: “everybody’s living in a material world, and I am a material girl.” Guilty as charged, and mildly ashamed that pandemic me proved to be more materialistic than I would like to admit.
The reopening of non-essential retail marks a return to the throngs of shoppers on UK high streets, but when the first national lockdown greeted us, many bricks and mortar retailers were forced to open their virtual doors – and consumers flocked. 87% of British consumers started utilizing online retailers in 2020, increasing from 53% in 2008. Dependence on e-commerce peaked and the value of online sales reached £99.31 billion in the UK. For some, the pandemic came with the realisation of what is really important, and that, perhaps, life would go on without a new pair of shoes or the latest beauty supplies. For others, online purchases were a treat after a long week of working from home and with less social living expenses, they had more to spend on discretionary items.
When first faced with our new reality, even a trip to the supermarket, an armour of hand sanitiser, face masks, and gloves in tow, was no small feat, and for some, it was easier, safer and more convenient to buy groceries with a swipe and a click. But Tesco and Ocado were not the only delivery vans on the road. In April 2020, online retail experienced an increase of 15.8% and during the most recent lockdown in the UK, the proportion of online spending soared to 35.2%.
The periods of lockdown changed the state of online shopping and retailers were forced into drastic shifts in order to keep up with consumer behaviour. To navigate this new competitive reality, retailers adapted by extending their digital engagement, attempting to bring an ‘in-store’ feel to their online presence, improving their delivery services, investing in warehousing spaces, and simplifying the experience by reducing the number of clicks. Celine Pannuti, Head of European Staples and Beverages Research at J.P. Morgan, said: “In the past few years, some of the big players have invested a lot to be more digitally savvy, accelerating innovation and refocusing their portfolios. I think a few of these companies had come into the pandemic prepared to a certain degree, because they had prepared their company to change and pivot more online. We see retailers narrowing their product range, focusing on what matters more and mainstream brands and products, so the shift to e-commerce for big and small brands is key.”
The word ‘essential’ is difficult to define in a society where, for most, all the basic needs of Maslow’s pyramid are met. Non-essential retail shut but that didn’t stop non-essential purchases. In the midst of lockdown, boredom was rampant and buying online was safer. But deeper psychological theories underpin the online habits of pandemic buyers.
People took to the supermarkets in droves last March, even before a national lockdown was announced. Trollies overflowed with jumbo packs of toilet roll and enough dried pasta to feed the population of Italy. Upon entering a frightening abyss of uncertainty, people clasped at what control they had. Speaking to CNBC Paul Marsden, consumer psychologist at the University of the Arts London, said: “Panic buying can be understood as playing to our three fundamental psychology needs.” He explained that autonomy, relatedness, and competence, give people a sense that they are “smart shoppers”.
Among the top products that boomed during lockdown were jigsaws, to counteract boredom, computer accessories and furniture, to spruce up the home office, and booze, well, to keep sane. Sales of activewear and casual clothes continued to rise throughout the year, but, as we sank deeper into lockdown funks, luxury apparel and accessories also started to rise. Why buy a Gucci handbag when you can’t flaunt it while out for brunch? The answer: because we could. For some, buying unnecessary items also provided hope for time when strutting down to the local pub in brand new loafers would be allowed.
Online shopping enables a similar sense of control to panic buying. A 2013 study published in the Journal of Consumer Psychology found that shopping choices restored personal control and reduced residual sadness. The research was based on the fact that “sadness is strongly associated with a sense that situational forces control the outcomes in one’s life”. The concept of situational forces dictating the events of our lives – sounds vaguely familiar during a global pandemic. A year of turmoil wrought personal upheaval and a lack of individual control, resulting in consumers clinging to their power of consumption. When faced with an uncertain situation we tend to try whatever we can to feel like we have some control. And so, virtual retail therapy and comfort buying provided a sense of control at a time when we felt deprived of so much.
The sight of delivery drivers raised a smile during the height of lockdown when the thought of opening a package was the peak excitement of the day. However, the increase in home delivery had wider environmental impacts. But it’s not unusual to have to tear open a large box and unwrap multiple layers of plastic and cardboard before reaching a product that would fit in the palm of your hand. Amazon’s sales in the UK soared to a record $26.5bn but even before the pandemic, a report from the nonprofit ocean advocacy organization Oceana estimated that Amazon was responsible for 465 million pounds of plastic packaging waste. In 2019, Amazon co-founded The Climate Pledge and committed to “making all Amazon shipments net zero carbon through Shipment Zero, with 50% of all shipments net zero carbon by 2030”.Senior air quality manager for Environmental Defense Fund Europe, Elizabeth Fonseca, told the Evening Standard: “Air pollution is an unintended consequence of this rise, especially since most deliveries happen via diesel-fuelled vans that pump dangerous pollutants into the air we breathe.”
Henry David Thoreau once said that “The price of anything is the amount of life you exchange for it”. Judging by that account, I’ve given Asos much more than they deserve. Fast fashion brands were one of the few retail winners. Boohoo, for example, recorded an increase in its sales by 45% to £368m from March to May. While fewer clicks before being thanked for your purchase may help retailers stay afloat while also being convenient for consumers, for some passive shoppers (those whose go-to procrastination method is adding items to their wishlist), there is a dangerous lack of steps before their bank balance drops a few digits.
During the pandemic, people started to rely on the instant gratification of online shopping. Buying is just one click away. And for anyone with an overdraft, there’s no need to worry about having enough cash at hand. Many people add items to their basket and after finding themselves curious as to how much of a bill they have worked up, they end up confirming their purchase. The only roadblock is entering their card details giving them time to come to their senses and change their mind. But, thanks to autofill, your order is on its way! The ability of devices to save card information also means that all we have to remember is that three-digit CVV. Farnoosh Torabi, a personal finance coach, said: “Money is abstract as it is, and it’s why a lot of us have a hard time managing it. If you have to see money leave your wallet, overspending is harder.”
After days confined to their homes, many people started to spend their time and their money differently. People spent less and saved more. Barclaycard found that overall consumer spending was down by 7.1%. The transition to a cashless society also gained momentum. Eric Leenders, managing director of personal finance at UK Finance, said: “September [2020] saw the proportion of contactless debit card payments hit a record high for the second month in a row, rising to 64% of total transactions in August. The value of overall contactless spending was also up by over 18% compared to the same period last year, as consumers made further use of the increased £45 contactless spending limit.”
Instantaneous access to money, the convenience of carrying only a thin card and no rattling sound of coins in the bottom of your pocket all sounds very appealing but the prospect of a cashless society also brings risks. Sweden has one of the world’s most aggressive policies to become cashless with cash accounting for less than 1% of total transactions compared to 23% in the UK. Many find it harder to control spending when they can’t see the physical cash leaving their hands, and if anything was to happen to your bank account, in a cashless society there are no alternative sources of finance. Diners are also less likely to leave tips when they haven’t got small change and, for children, there’ll be no spontaneous £5 notes from generous neighbours.
Despite the hike in retailers switching to digital sales, for certain stores, such as Primark, online retailing isn’t an option. The related logistics costs to online shopping means that delivery costs would exceed the value of many of its goods. A recent report carried out by IMRG, found that 33% of retailers had to increase prices to cover the cost of returns.
The question now that non-essential retail has reopened and things are gradually returning to ‘normal’, is whether the shifts in online shopping, our attitude towards consuming and our conception of money, are here to stay. Sarah Hunter, Chief Australia Economist at BIS Oxford Economics, said: Australia is a really interesting case study on this as the pandemic is basically under control domestically which means that the majority of restrictions have been lifted.” She added: “We can see in the data that although online’s share of total retail spending has fallen back from its lockdown peak it’s a long way above where it was a year ago.”
According to Statista, online retail is forecasted to grow by 34% in the next three years but Celine Pannuti researcher at J.P. Morgan said: “In the next 12-24 months, consumers are going to be left with less money in their pocket. Many people will be left unemployed and will have less to spend. This will reinforce the trend for staying at home. We could also see some downtrading as consumers settle for more affordable options, though for now, we have seen consumers buying big brands and choosing household names overvalue or private label products.”
Before I left home for Oxford last October, my dad told me that a significant number of delivery drivers were losing their jobs. Why? Because my leaving meant a huge drop in deliveries to the area. After that funny, but not so subtle, nudge, I realised that I may need to reexamine my online shopping habits. At least now, while I’m still a material girl, if I do splurge on a clothing haul, I’ll have somewhere to wear my new purchases, even if it’s only to my local beer garden!
Artwork by Rachel Jung
