Why We Can't Stop Spending During the Holidays

Every year, once the big holidays have passed, we always hear that holiday spending has hit yet another record high! Over the recent Black Friday and Cyber Monday, total online retail sales in the United States rose by 19% and 16% respectively, reaching US$7.4 billion and US$9.2 billion. The 2019 Tmall Double 11 (Singles' Day) festival also smashed records, with single-day transactions totalling RMB 268.4 billion. Holiday spending may sound like a matter of course, but behind it lie many consumer-psychology factors (Consumer Psychology) that drive our urge to buy — and even to buy more and more — factors most of us may not even be aware of!

1. Holiday culture already comes with a demand to spend

Holidays usually carry a rich culture and deep, accumulated meaning, and they come with consumer demand of their own — take the Chinese New Year, or Christmas in the West. Consumers have always held a strong psychological attachment to these occasions. At the same time, people generally have holidays off during these festivals, and with some free time on their hands, shopping becomes a major holiday activity. For that reason, an existing holiday is a relatively easy springboard for a large-scale promotional campaign to succeed, and it can strengthen consumers' urge to buy.

These days, whether online or offline, holiday campaigns come in ever more varied forms, with ever greater promotional reach and ever more eye-catching store designs. New competitors keep joining the fray, together cultivating an intense shopping atmosphere.

2. Discounts boost the urge to buy

Take one of the six principles of consumer psychology — the principle of Reciprocity. Its basic idea is this:

"Give a little goodwill, and create a large return."

Based on this principle, consumers adjust their shopping behaviour in response to a store's offers. As you might expect, during the festive season consumers ramp up their holiday spending in return for all sorts of in-store offers — product trial packs, discount coupons, the free shipping so common in e-commerce, and more.

3. Habitual thinking: assuming holiday discounts are always big

Every year, plenty of advertisers and brands push hard during the holiday period. Even when "lowest of the year" or "rock-bottom prices" isn't actually their selling point, over time consumers come to believe that holiday promotions are simply not to be missed! Under this habitual thinking, when a holiday arrives, products both needed and unneeded get tossed into the shopping cart alike.

Once the dust has settled, you may find that end-of-season markdowns or members' appreciation days offered even deeper discounts.

4. The festival-making power of social media platforms

Consensus & Social Proof

Even if you're not especially fond of shopping, you may not be able to resist the power of the major social media platforms.

As the largest social platform, Facebook has reached 2.2 billion monthly active users; YouTube and WhatsApp rank second and third. They long ago became part of daily life, and they are an indispensable element of holiday sales campaigns too. You'll notice that social platforms understand you better and better — without you having to do much searching, they put the goods you might want right in front of you, and even draw you in with extra discounts.

You also judge products quickly and easily from User Generated Content (UGC) and consumer reviews. In psychological terms, these are precisely an expression of Consensus & Social Proof. People are willing to buy products that the majority recommends in order to gain social acceptance, because if everyone is buying it, you can't go wrong following suit.

Liking

In recent years, brands have also frequently enlisted Key Opinion Leaders [Key Opinion Leader (KOL)] and internet celebrities (YouTubers / YouTube Stars) as part of their holiday promotion strategy. Surveys have found that, compared with traditional celebrities, they reach consumers more easily, because they are more entertaining and direct, without a celebrity's distance; they speak and behave more boldly, and easily strike a chord with their audience. A Variety survey noted that, for these very reasons, young people's emotional attachment to YouTubers is seven times higher than to mainstream celebrities.

"People always accept those who are the same type as themselves."

So, with their fame and credibility, plus the rich shopping atmosphere of the holidays and the consumer demand traditionally tied to festivals, a can't-help-but-buy mindset takes shape.

5. The anxiety of not spending

The anxiety of not spending isn't hard to understand. It is similar to the "Liking" principle above — people always accept those who are the same type as themselves (or we find it hard to accept those who are different from us).

When the family, friends or colleagues around you invite you along to shop, or talk about what they've bought, it stirs up your emotions even though you had no intention of spending. The way to ease the anxiety of not spending is to join everyone and shop too.

6. The pull of a holiday theme

The creativity of brands and e-commerce has encouraged spending on non-mainstream holidays.

In recent years, International Women's Day has been reshaped into a shopping-themed "Goddess Festival" or "Queen's Festival." Over the course of this evolution in the festival's name, both brick-and-mortar retailers and e-commerce have continually ridden the momentum to promote sales, working to turn 8 March into a "Shopping Festival." According to some interviewees, the titles "Queen" and "Goddess" are psychologically easier to accept than "woman/women," and put them in the mood to buy. Add to that the fact that women's spending power should never be underestimated — this "she-economy" of consumer behaviour outspends men by more than HK$210 billion (according to data from a joint credit-card centre). So, by reading the potential of your target customers and setting a theme, you can effectively win over the consumer's wallet.