Sunday, September 30, 2012

Direct Shoppers Toward Needs Over Wants

The recently released “Psychology of Spending Report” from financial services retailer BMO concludes that Canadian consumers are spending money unwisely. This conclusion followed analysis of results from online interviews with a random sample of 1,000 Canadians 18 years of age and older.
  • About 60% of the respondents said they sometimes engage in retail therapy—shopping to cheer themselves up. 
  • More than four out of ten said they buy items they never use. 
  • About 23% said they were unable to buy items they needed because of impulsive spending on items they wanted, but didn’t need. For respondents with annual household incomes of at least $100,000, the figure was, at 19%, not much lower. 
     The report recommends consumers exercise better restraint so they can put more of their money into banking and investment accounts, such as those of the BMO Financial Group. So, even though the survey was conducted by Pollara, a firm specializing in public opinion and market research, the sponsor did have an interest in the outcome. I also believe that the sampling method may have produced results which are not representative of the full population of Canadian adult consumers.
     In fact, I’m thinking that the 60% figure is misleadingly low for the proportion of consumers who admit to sometimes shopping when sad in order to improve their mood. I suspect that almost all of us do that at least sometimes.
     Retail therapy is not necessarily bad. Researchers at Pennsylvania State University and HEC-Paris say that, with the exception of the 2% of adults who suffer from Compulsive Shopping Disorder, people seeking retail therapy are fully capable of exercising self-control. Their shopping is mindful, not mindless. They restrain themselves because the restraint itself helps lift their spirits.
     These consumers do make unplanned purchases, but unplanned only in the sense that they might not have decided in advance which specific treats they will buy for themselves. They prepare themselves to come across both needs they’d forgotten to include on their shopping list and items they wouldn’t realize they wanted until the items were in front of them or in their hands.
     Still, the BMO “Psychology of Spending Report” does remind us, as retail professionals, of the helpfulness in guiding our shoppers toward purchasing what they need over purchasing what they want, but don’t need and may never use. We do have an interest in keeping our target audience financially healthy.

Click below for more: 
Couch Retail Therapy for Chronic Conditions

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