One of the defining images of the coronavirus pandemic has been the rows of empty shelves in supermarkets around the world, as shoppers flocked to stock up in the event of shortages of supplies. It’s a situation that caused considerable concern, both in terms of the impact crammed stores would have on the spread of the virus, but also on the ability of vulnerable people to get the supplies they needed.
New research from Johns Hopkins University explores some of the psychology behind this behavior. The study began life a few years ago, and therefore analyzes hoarding behaviors long before they became such a feature of our news coverage during the coronavirus outbreak.
Discounting the future
Central to our tendency to hoard is our inability to plan more than a few weeks ahead. This means we’re highly sensitive to small changes in price, such as during a promotion, which can prompt us to buy far more than we need, especially if we have ample storage space to put our non-perishable goodies.
“A key parameter that determines how far ahead consumers plan is the discount factor, which measures the strength of forward-looking behavior,” the researchers explain. “Looking at what is happening now in supermarkets, our research suggests that in order to ‘calm’ people, we need to find a way to change consumer expectation about future prices and product availability in the near future.”
A good way for retailers to counter this is to place temporary limits on how much of any given item people can buy. This was a tactic deployed by retailers across the world in response to the panic buying that became pervasive. Indeed, given the huge amounts of data most retailers have on customers via loyalty cards, the authors even suggest using this data to prohibit surge purchasing of particular items if it’s considerably outside one’s normal behavior.
“Such a policy will help to smooth the product availability for the near term and will bring consumer expectations about future prices and availability in line with the pre-crisis period,” the researchers conclude. “Our model suggests that consumer buying behavior will then return to normal. In addition, online retail marketplaces (e.g., Ebay, Amazon) or Department of Justice can also be more aggressive in monitoring for ‘price gouging.’ This should also help consumers to adjust their expectations.”
