Crisis spurs wave of spending
Short-term mood boost could be followed by long-term effects on finances, expert warns
Hear that laughter coming from a midtown backyard? That’s the sound of a $300 investment in mental well-being.
The Charles-Fridlyand family is having a whale of a time in the aboveground swimming pool they bought online in April.
“We’re in there hours at a time and we laugh a lot,” Diana Fridlyand says of her husband and two young sons, noting that the daily dips help ease her pandemic stress, which “comes in waves.”
Anxiety and uncertainty over the coronavirus have sparked an urge to splurge as consumers look for ways to take the edge off, scooping up everything from $18 hand cream to $50,000 swim spas. “My showroom is an empty bowling alley,” business owner Jennifer Gannon says of BonaVista Pools’ retail location in Leaside, where they sold more products in the first quarter of this year than all of last year.
“I hear people say, ‘I’m feeling COVish,’ ” referring to the effects of COVID-19 on mental health.
“Water is helping them cope,” Gannon said, citing its restorative and calming qualities.
Fridlyand, a senior manager for a communications company, says their spending, $299 plus tax, was based on her feeling “that everything would shut down” this summer. She’s caring for Aubrey Charles, six, and Bodie Charles, almost four, all day while working from home. Husband, Brent Charles, attests to their pool’s value: “It’s been a lifesaver. A fantastic purchase.”
The 12-footer is big enough to accommodate everyone “and still fit a drink in your hand,” jokes the chef and owner of Rebel Merchant Catering Studio.
And the kids? “The first thing they ask is, ‘Can we go in the pool?’ That’s all they want to do.”
The early days of the outbreak and self-isolation saw a wave of spending sprees, according to a Credit Karma survey. More than a third of respondents said they’d made an impulse purchase because they felt anxious or stressed. Of those, nearly half said they were stress-spending at least once a week. Ten per cent had gone more than $1,000 over their budgets since sheltering in place.
Even the affluent — or perhaps especially the affluent — are indulging if online jewelry sales are anything to go by. Strong results this spring, reported by Sotheby’s and Christie’s auction houses, included a record-setting $1.34 million for a vintage Cartier bracelet sold by Sotheby’s.
Locally, swim spas — a hybrid of a small pool and big hot tub priced from $20,000 to $50,000 at BonaVista — “went off the charts” as customers diverted vacation funds to “create some comfort” at home, says Gannon, who owns the retail division of the family business. Troubled souls still hoping to be soothed this summer are out of luck, however, thanks to depleted stock.
Not so for patrons of Peterborougharea company Walton Wood Farm, where business owner Leslie Bradford-Scott is filling non-stop orders for personal-care products with names like “Week From Hell” and “Nurse’s Rescue.”
Two weeks after the lockdown set in, “We took off like a freight train,” says the entrepreneur, noting that e-commerce sales to consumers — primarily GTA residents — have jumped 300 per cent. In one instance, two months’
worth of products geared to front-line workers, such as $18 hand cream and $13 shower therapy, sold out in six hours. “We’re like the candy store of hand cream,” says BradfordScott, whose own experience as a stressed-out solo parent spawned her start-up six years ago.
She observes that the average pre-pandemic order was $59; now it’s $89. While people often buy stuff for their entire households, including kids and dogs, many purchases aren’t intended for self-pampering, she says.
“There’s a lot of gifting going on. You feel good when you give something that’s creating an emotional connection.”
One shopper bought $2,000 worth of lip balm for nurses and “gave it all to one hospital,” says Bradford- Scott. Another splurged on $800 worth of “Week From Hell” products.
The why behind the buy is often easily explained by the experts. Just the anticipation of a reward causes a dopamine spike that helps spark pleasure, U.S. neuroscientist Robert Sapolsky discovered years ago.
And as Rice University marketing professor Utpal Dholakia puts it: “Shopping offers a perfect avenue” to relieve anxiety or stress — “or at least divert our minds temporarily.”
Researchers call this “mood repair,” he told the Star in an email from Houston. But the short-term boost may be “counterbalanced by harmful longer-term effects for many people,” Dholakia cautions.
Impulse shopping can affect personal finances, create conflict with partners and family members and, in severe cases, even lead to compulsive shopping and hoarding, he says.
Extreme behaviours aside, Credit Karma’s Ken Lin isn’t surprised “that people are spending more money to cope with stress. Retail therapy is a real thing no matter who you are or where you live.”
Lin, CEO and founder of the personal finance website, says shopping can offer a two-forone benefit by making you feel better and more in control. “That sense of control is super valuable, especially during a pandemic.”
But continuing to spend money you don’t have as a way of coping can be “dangerous,” especially if you rack up additional fees and interest on credit cards, he warns. “When you can, pay with cash or debit.”
Another financial pitfall associated with stress-spending is neglecting to put money into savings: “You could find yourself in a tough position when it comes time to pay for an unexpected bill or emergency.”
Lin advocates the “24-hour rule” wherein you to “sleep on it” before buying something non-essential. If, after a day, you still think it’s worthwhile, “it’s less of an impulse buy.”
And he’s not about to throw cold water on purchases like the Charles-Fridlyand family’s. “If you have the extra cash … it’s OK to occasionally spend money on non-essential items.”
The joyful sounds from their backyard say it all.