Fashion Psychologist, Dr. Dawnn Karen taking questions at Concordia University.
The 2020 holiday season will see a rise in ecommerce transactions as consumers take their spending online. This digital shift is unlocking new behaviors as consumers become smart online shoppers and use thriftiness to guide their purchase decisions. In a study by Honey1, we looked to better understand how deal-seeking has changed what and when consumers buy and the emotional benefits that derive from discount discovery.
To provide commentary on these shifts, we partnered with retail and fashion psychologist Dr. Dawnn Karen to discuss the evolving behaviors of online spending and how both consumers and retailers are looking to score in a thrifty new world. Dr. Karen pioneered the field of fashion psychology. She is a graduate from Columbia and author of Dress Your Best Life.
Why are shoppers looking for more deals and coupons than ever before?
With a rising cost of living, consumers are at a turning point where items that were once simple purchases are becoming notable expenses. As a result, shoppers have to establish a benchmark for what they’re willing to pay and then actively find retailers offering deals that match their budget. In addition, COVID-19 has had a major impact on how consumers are spending. According to Honey research, 58% of Americans have experienced a decrease in household income and 79% of Americans believe finding deals are paramount during the pandemic compared to previous times.
There is also a need to mitigate anxiety, guilt, and other negative emotions that can come into play after making a purchase. Honey research postulates that making a full-priced purchase during the pandemic can lead 38% of consumers to feel anxious, 22% of consumers to feel frustrated and 22% to feel guilty.
What are the emotional stages shoppers go through when deciding to make an online purchase?
When a consumer decides to shop online, they often begin with a feeling of excitement as they envision their lives enriched by the products they wish to buy. But that can be fleeting as the shopping journey can create an array of emotions dictated by the prices they encounter. If the consumer discovers discounts or deals, it’s likely they’ll retain a sense of joy not just while shopping but each time they use the item. When a consumer is confronted with a full priced item, particularly one above what they'd hoped to pay, they can feel anxious about making the purchase. Afterward, shoppers may feel guilty about paying full price and question their shopping decisions. Honey research shows 61% of Americans feel buyer’s remorse after making a full-priced purchase.
How does discovering a discount or finding a deal change how shoppers feel about what they buy?
As shoppers are looking to gain some certainty in a world that seems to be fleeting, discovering a discount can bring about such positive emotions and return a sense of control to consumers. I would emphasize that mindful shopping and deal-seeking can help broker a positive relationship with the items we buy and the brands we engage with. Each interaction is a reminder of our savvy thriftiness that can boost our mood. However missing a deal or overpaying can leave shoppers with a lasting sense of guilt or pressure to engage with their purchase in order to justify the cost. Honey’s research also shows that deal discovery brings delight as shoppers compared it to eating comfort food (feeling pleasure) and randomly finding money (feeling lucky).
How has being a smart shopper altered how people think of thriftiness?
Being a smart shopper has altered how people think of thriftiness in progressive ways. Finding a deal is not looked down upon but considerably praised. Shoppers are now flaunting their Frugal Franny or Frugal Frank ways instead of hiding it. Gone are the days where thriftiness is viewed as poor. Now it is viewed as smart! More than half of Americans (52%) reported sharing deals to help their loved ones save money when needed. When someone shares a deal, it means that someone cares about not only your financial wellbeing but your mental health. It can also signal that they’re making thoughtful choices than could also be present in other parts of their lives which is an appealing quality we look for in others.
What should retailers know about consumer smart shopping and how can that help strengthen their relationship with their audience?
Consumers are always going to find delight in a discount because of the lasting impact it has on their mood and their financial wellbeing. Retailers should be considering these transactions as they look to establish a long-term relationship with their customers. If a deal is rejuvenating, then it returns the fun to shopping and gives the customer reason for more frequent and continuous engagement. The good deal or coupon can be the handshake that lets both the shopper and retailer win.
1Honey, a PayPal service, commissioned Atomic Research to conduct an online study of 2,007 American adults 18 to 55 years old. The margin of error of the overall sample is +/- 2 percentage points with a confidence interval of 95 percent. The field work took place between August 21 and August 23, 2020.