How Post-Pandemic Revenge Spending Will Impact CXAdd bookmark
With almost a year of the pandemic behind us, people are looking for a little relief. While some may take this transition period as a moment to catch up, others are ready to break out of their stagnant routines and spend some money. Although it seems like we’ve been through enough, there’s another caution lingering around post-pandemic life: revenge spending.
After a year of isolation, void of lavish vacations, big nights out, and holiday gatherings, many individuals are looking for some excitement in their lives. With this in mind, experts are warning of the impending influx of revenge shopping and its impact on consumer behavior. While these warnings focus on the personal effects of overspending, businesses are taking this trend as a sign of economic optimism.
Who Will Benefit?
Because many individuals spent their year inside, preparing meals at home and avoiding in-person retail experiences, those fortunate enough have put away a significant amount in savings. This can be attributed to opportunity loss -- without the opportunity to spend on travel and entertainment people were able to save, and in theory, once those opportunities present themselves again, customers will begin spending.
Therefore, travel and leisure industries, or any experience-based product will likely reap the most benefits from this shift in consumer spending. But, more broadly, any product or service that aligns with this shift in customers’ lifestyles will be rewarded. For example, fashion brands and other retailers should also prepare for the influx; customers may start racking up bills on clothing for their eventual big night out or home decor for their first dinner party or holiday with friends.
However, it’s unlikely that this transitional period will initiate a complete 180-degree shift in customers’ pandemic-formed habits. Just because customers may spend more money, doesn’t mean they will be running back to their former brick-and-mortar favorites. Individuals expecting a swift return to the traditional mall or retail space may be initially disappointed if customers continue to shop online post-pandemic.
Position Yourself Now
Businesses that focused on creating safe and welcoming environments during the height of the pandemic should reap the benefits throughout this transition. Companies that prioritized relationship building while engaging customers through meaningful support will likely be rewarded most with revenge spending.
Trust has been a consistent factor for consumers throughout the pandemic, back in July Experian found that 52% of customers who felt businesses treated them fairly during the pandemic planned to give them more of their business. This makes it a great time to test these statistics. If customers truly reward businesses that held their trust, we will be able to pinpoint companies that emphasized customer relationships and authenticity.
Therefore, businesses should take this moment to position themselves in a way that continues building or at the very least regains a level of trust to solidify your brand during this time of increased spending. Additionally, any efforts in the past to facilitate excellent and safe experiences for your customers should be emphasized to show off the hard work put into making your customers feel valued.
Lastly, customers may take this time to begin researching trips, experiences, and products to take advantage of in their post-pandemic lives. Businesses that recognize this period as an opportunity to increase advertising and personalization efforts to attract these patient customers will see the most success.
Prepare for Regret
While all of this may positively reignite the economy, this overzealous spending might catch up with customers and lead to regret. This kind of regret will undoubtedly put a strain on customer service teams if there is a rapid increase in returns or inquiries from customers who overextended themselves. Therefore, companies need to be aware of this potential shift in volume and equip agents with the skills needed to take on this new influx of customers.
According to Bankrate, revenge spending is, “when you take out all your frustrations of the past year by deciding to drain your savings on everything you haven’t been able to do.” When looking at it this way, it seems likely that some customers may begin to rethink these purchases once they see their dwindling bank accounts. This is even more likely to occur with emotionally charged decisions; after ‘breaking out’ of quarantine customers may make more spontaneous purchases, demanding a more complex and compassionate level of support.
Therefore, companies that take the time to retrain and enhance agents’ skillsets to reflect customers evolving behaviors and upcoming lifestyle changes will be positioned for long-term success. Additionally, brands that pay careful attention to customers’ new preferences and behaviors can quickly make meaningful changes to their customer experience efforts. This transition period, if analyzed and addressed, can be a key differentiator in providing exceptional future customer experiences.