Global data analytics and measurement firm Nielsen has identified a number of human nature-related thresholds that have influenced consumer behavior around the world and in the United States as the CCP virus has spread, and as measures to combat it have been introduced. The patterns suggest that consumer behavior has been linked to the news cycle, and that as much of the population transitions from a phase characterized as preparation for quarantine to “restricted living,” in-store visits will be significantly reduced.
Negative News Sells, Drives Panic Buying, Stockpiling
A recent Nielsen report suggests that consumers have increasingly turned to local media as the CCP virus spreads, with a “notable spike in local news viewing between early February and early March,” according to the report. Local media can provide information on scarcities or potential shortages in local stores.“The number of press articles mentioning coronavirus stockpiling or hoarding are lower than organic social mentions,” says Reid, “but a peak in news mentions of stockpiling came just before a spike in social mentions of the practice.”
Reid says that according to Brandwatch data, which measures online mentions of the term “out of stock” alongside a store name, “there is a concentrated period in which lots of news articles around stockpiling are published between March 3-6.” Reid then advises users to “scroll across to social mentions of things being out of stock, and you’ll see how these mentions flourished between March 6-8.”
Human Nature Meets Social Media
According to Jim Roberts, Professor of Marketing at Baylor University: “When we are reminded of our own mortality, we search out products that give us comfort. We naturally buy more when we are threatened. We often seek comfort in our spending particularly in times like these.”“The media benefits from creating hysteria—more people watch and listen when they are frightened,” he said. “There is something called the availability bias that can explain why we are so fearful. We view things that we have been recently exposed to as more prevalent than they really are.”
Guilty Consciences
Research from the UK’s Institute of Economic Affairs (IEA) suggests that while consumers view panic buying negatively, they still do it. Only 14 percent asked said they thought it was acceptable to stock up on toilet paper, though this was one of the first products to be sold out as panic buying took hold.Panic Buying: A Self-Fulfilling Prophecy
Marketing professor Utpal Dholakia explained in a recent article that panic buying is an inherently unplanned phenomenon. When nervous consumers see others lined up outside a supermarket, in real life, or on TV, they think that they need to stock up on supplies while there are still some left.“By its very nature, a panic buying spree comes out of the blue,” said Dholakia. “With the coronavirus, as news about its spread in China circulated for weeks, there was little impact on Americans’ shopping behavior. As it spread to Italy and other countries, there were ripples of concern. Then suddenly, it seemed as if everyone was rushing to the store to stock up their pantries and refrigerators at the same time.”
Such consumer behavior is described by Nielsen as “pantry preparation”—the stockpiling of primarily shelf-stable food, hygiene, and health-related products as a time of uncertainty approaches. Food purchases often tend more than usual toward products with longer shelf lives, including canned goods and dry products such as rice and pasta. Pantry preparation is accompanied by increases in the number of store visits and much larger basket sizes.
Moving to the Next Stage
Panic buying can’t continue indefinitely, however—there are only so many chicken thighs your deep freeze can hold. Many of those consumers who have built up stocks of food, toilet paper, and other essentials will have satisfied their desire to prepare a pantry for uncertain times ahead. If lockdowns are mandated by federal or local government, such as Gov. Andrew Cuomo’s “New York State on PAUSE” executive order, consumers may elect to remain at home if they perceive the danger of infection to be peaking in line with the most extreme form of prevention.According to the IEA: “There are many good reasons to believe the current shortages will be temporary. For a start, most people who felt the need to build up a buffer of basic supplies have surely now done so already. We should therefore now be past the peak in demand.”
Once living conditions are restricted by actual quarantine, shopping trips tend to be more severely restricted, while deliveries of online purchases may also be curtailed by the reorientation of online suppliers such as Amazon toward items such as sanitizer and other health-associated materials, as well as bottlenecks in existing last-mile delivery systems.
Defusing Consumer Anxiety
At a press briefing at the White House on March 15, President Donald Trump tried to reassure consumers. “You don’t have to buy so much. Take it easy. Just relax,” he said.“Cut back on media exposure and distract yourself by trying to ease others’ burdens. If you turn off your TV and avoid social media you will reduce your anxiety level,” said Roberts.
“Take the emphasis off yourself and you will reap psychological benefits.”