According to a recent report by consumer platform Klaviyo, consumers believe in spending during stressful times, such as the recent rise in inflation. The survey includes more than 1,000 people in the U.S., which found that more than 60 percent of people use retail therapy to improve their mood.
Notably, a report by the Journal of Consumer Psychology in 2014 similarly found that one of the benefits of consumer spending not only makes people happier, but it can also reduce sadness. The report states that sadness is often linked to a loss of control. Put simply, by making shopping decisions, a person has a sense of regaining control of their life.
Klaviyo found that more than 45 percent of consumers say they treat themselves to retail therapy, with 49 percent of consumers reporting that they will indulge on discretionary items because they are stressed about the economy, while more than 35 percent state their spending because they are stressed about the job market.
Klaviyo’s survey further highlights the consumers’ thoughts on the impact of inflation on their wallets and spending habits with 55 percent of consumers saying that inflation will impact the money they spend on discretionary items in the next six months and 21 percent stating those consumers planning to spend more in the upcoming months.
According to Jen Rapp, vice president of brand marketing at Klaviyo, consumers will be spending on smaller, luxury items for the foreseeable future. The company’s survey found that 80 percent of consumers are spending under $500 on discretionary items each month. For retailers looking to draw consumers in, Rapp suggests adding a small gift with a purchase or analyzing what price points lead to abandoning carts to help retailers understand what their customers are buying.
“Compared to the same time period in 2022, we saw orders for eyeliner, moisturizer and nail polish all increase in March 2023,” Rapp said. “We believe this is because spending on smaller items provides consumers with instant gratification, and distraction from stressors like the economy and job market.”
Highlighting the significant power that psychological behaviors play in a consumer’s spending habits, the company advises that understanding a consumer’s emotional needs and catering to the current state of the U.S. economy is important when brands tailor their marketing and appropriately price their goods and services.