Despite recession fears and fueled by ‘revenge spending,’ Americans spend $314 a month on impulse purchases
To be sure, the pandemic has changed the way people spend money.
“Consumers abandoned ingrained shopping habits, hurtling ecommerce into hyperdrive,” according to an analysis by McKinsey & Company.
Americans are spending more on clothing, travel and experiences, the report also said, and are now conditioned “to believe they can get whatever they want, whenever they want.”
But that also makes shoppers more susceptible to impulse buying.
Another recent report by online lender SoFi found that 56% of consumers said that more than half of their online purchases are spontaneous, driven largely by changing habits post-Covid and the rise of buy now, pay later, which has exploded in popularity along with the general surge in online shopping.
Several studies show that BNPL has played a role in encouraging consumers to spend more than they can afford on impulse purchases.
According to one report by LendingTree, nearly half of shoppers said they wouldn’t have made the same purchase if they didn’t have the option to finance.
Sites like TikTok, Instagram and Facebook are also fueling impulse buying.
fast online shopping
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Roughly half of social media users have made an impulse purchase driven by something they saw on their feed, Bankrate recently found. In SoFi’s survey, as much as three-quarters of consumers said they bought something they saw on social media.
It’s not just the allure of celebrities like the Kardashians anymore: Seeing influencers and even friends, posting in restaurants, on vacation or shopping creates a “Keeping up with the Joneses” mentality that is hard to resist.
Nearly 40% of young adults said they spend more of their money on experiences than necessities like paying bills, in part because they want to share it on social media, according to a separate report by Credit Karma.
Two friends with cotton candy taking photos against the ferris wheel
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The surge in spending through social media platforms has also led to an increase in shopping while not completely sober.
With more consumers online around the clock, over half of adults, or 53%, admit they have shopped while intoxicated, SoFi said.
The most-popular post-cocktail purchase: clothing, based on social media posts about drunk online shopping. Amazon was by far the most-mentioned retailer.
Buyer’s remorse is not new. However, under these conditions, it’s more pervasive than ever.
Of those who’ve used installment payment plans, 22% regret their decision, according to a survey by DebtHammer.org.
Based on Bankrate’s report, 64% of shoppers said they have regretted at least one purchase they made because of social media.
And when it comes to drunk shopping, a full 65% of respondents said they forgot ordering an item until it arrived on the doorstep, according to SoFi.
Meanwhile, total credit card debt has creeped back to $890 billion, just shy of 2019′s record high. Allen Amadin, president and CEO of American Consumer Credit Counseling, offers these tips to curb spending and pay down debt.