Research Finds a Way to Stop Consumers From Hoarding During a Crisis
Sat, April 10, 2021

Research Finds a Way to Stop Consumers From Hoarding During a Crisis

 

After the World Health Organization declared the new coronavirus a pandemic, panic-buying and hoarding in supermarkets occurred across the world. The announcement has rampantly heightened stress and anxiety, leading many people to get all the supplies and food that they need. 

In France alone, one of the countries with the most coronavirus cases, it was reported that 29% of people had already bought more soap and hand disinfectant than usual in light of the spreading of the virus. Statista, a German online portal for statistics, showed that 18% of people living in France have already stocked up on food products, pharmaceutical drugs or products (8%), and face masks (7%). 

In Singapore, mass demand for rice and instant noodles was reported, prompting Prime Minister Lee Hsien Loong to assure the public that was enough supplies for the people. Supermarket spending in Auckland, New Zeland increased by 40% compared to the same day a year ago. Hoarding in Malaysia, on the other hand, has driven an 800% increase in weekly hand sanitizer sales. 

 

 

What Causes People to Hoard and Panic-Buy?

Hoarding and panic-buying aren’t new. They have happened during earlier pandemics, after 9/11, and other crises across the world. “It’s a natural response to a stressful experience,” said Lisa Kath, an associate professor of psychology at San Diego State University.

Stephanie Preston, a behavioral neuroscientist at the University of Michigan Department of Psychology, said that hoarding and panic-buying are normal behaviors during a crisis. They are hardwired into our nervous systems as an adaptive response to the shortage, which we share with other species. For instance, squirrels that must live all year from the fall nut production and kangaroo rats who must survive desert droughts respond in sophisticated ways to signs of trouble. This response to stress and perceived uncertainty is natural and usually adaptive.

Many historical accounts also showed how panic buying has been rampant in times of crisis, which often precedes climate disasters. For instance, after the 2011 Tohoku Earthquake in Japan, change in consumption behavior across 10,000 products was observed and reported. According to Journalist's Resource, an online site that curates, summarizes and contextualizes high-quality research on newsy public policy topics, the researchers found out that average daily expenditures by households residing in the Tokyo metropolitan area surged immediately after the earthquake.

“Households that did engage in panic buying appear to have done so quite randomly for a wide range of products (purchasing rice, bread, noodles, and whatever they could lay their hands on),” the researchers said. 

According to Time, an American weekly news magazine and news website, this pandemic violates people’s sense of control in fundamental ways. The cycle of panic buying, hoarding and scarcity only stand to escalate unless policymakers can find a way to restore that feeling. “People are really not equipped psychologically to process this type of thing. So that just makes it worse for a lot of people in terms of uncertainty, and then they do whatever they need to do to try and get back some control,” Andrew Stephen, a marketing professor at the University of Oxford’s Said Business School, said.

Steven Taylor, a professor and clinical psychologist at the University of British Columbia, added that panic buying is fuelled by anxiety and a willingness to go to lengths to control those fears such as queueing for hours or buying way more than you need. This helps them to feel in control of the situation. “Under circumstances like these, people feel the need to do something that’s proportionate to what they perceive is the level of the crisis. We know that washing your hands and practicing coughing hygiene is all you need to do at this point,” Taylor said. 

 

 

How to Stop Hoarding and Panic-Buying

A 2017 study published in the INFORMS journal Marketing Science provided a new perspective into how countries can control hoarding and panic-buying during a crisis. According to Phys.org, an internet news portal that provides the latest news on science, the researchers focused on how consumers respond to price promotions in storable goods markets such as food supplies, sanitizer, laundry detergent, and many more. The findings showed that we can determine how far ahead consumers plan on how much to buy in each shopping trip, which usually depends on their current inventory. 

The consumers’ shopping plans usually depend on their expectations of the future prices of the products that they will buy. "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,” author Matthew Osborne of the University of Toronto said. 

Author Andrew Ching of Johns Hopkins University explained that countries can control hoarding if large retail chains and online retailers can restock as soon as possible and assure consumers that they will not materially change regular prices and promotion frequencies. "Putting a temporary limit on how much of particular item consumers can buy, helps ensure product availability for more shoppers. Given that most consumers join a retailer's loyalty program, it is even possible for big retailers to learn consumers' recent purchase histories, and put a temporary limit on how many units one could buy per week, etc,” Ching said. 

Another alternative in controlling hoarding and panic-buying is acknowledging and managing our anxiety. To make rational decisions, it’s important that people are not governed by their fears and make decisions based on unhelpful urges and emotions. According to The Conversation, a network of not-for-profit media outlets that publish news stories written by academics and researchers, cognitive behavioral therapy (CBT) techniques can be helpful because it challenges unhelpful thoughts and encourages us to make decisions based on evidence.

“Anxiety needs to be acknowledged and managed. We do not want complacency, but high levels of anxiety are not useful to prepare [or] prevent catching it,” Helene Joffe, a professor of psychology at University College London, said.