The pandemic, online shopping and the shift towards 're-commerce'

Due to closed borders and the emergence of coronavirus variants, many people have halted their travel plans and chosen to instead spend their earnings by shopping.

This group of consumers either spends from their savings or through credit cards. And, since their introduction, ‘Buy now, pay later’ schemes have played their part in encouraging irresponsible overspending.

In Malaysia, for example, the country’s finance minister noted that 40 percent of Millennials (those born between 1981 and 1996) are spending beyond their means. Bank Negara Malaysia reported that 47 percent of local youths (aged 18-29) have high credit card debt. These debts’ common internal factors include retail therapy, overspending on occasions, and a need to be part of the crowd.

“During the pandemic, an increasingly stressful life caused people to spend more on themselves,” say the Monash researchers. 

“Retail therapy is a mood booster when stressed [and] the impulse to spend on oneself becomes stronger, as shopping does tend to lift one’s spirits. Special occasions can likewise destroy one’s wallet.”

Being part of the in-crowd is crucial to some, prompting them to purchase the same items as their peers. This peer influence is further boosted by the frequent use of social media platforms, which increases re-commerce (the selling of previously owned, new or used products).

Positive trend towards pre-loved items

“As people buy more things, they often end up with items they do not need or use as often, thereby increasing the supply in the market for pre-loved items,” the Monash team observes. 

According to the researchers, trend reports from the US indicate that consumers there are shifting towards buying re-commerce items due to sustainability and caring about the product’s environmental impact. 

People are motivated towards buying used items such as clothing, furniture and mobile phones as they feel it could prevent wastage. Some have also been driven to buying used items by tougher financial times caused by the pandemic.

Overall, pre-loved is a positive trend amidst the concerns of overconsumption and overspending brought about by the ease of online shopping. It is also good for the environment.

So, how can the growing move towards buying pre-loved goods be accelerated? The Monash researchers believe peer influence can be a significant factor.

“Celebrities, athletes and political leaders are trendsetters. They are known as reference groups that constantly spread messages (eco-conscious) through social media. When these groups encourage the purchase of sustainable products, people are inclined to follow in their footsteps – using them as a standard [for] their purchase decision,” the research team observes.

“The pandemic has changed online shopping forever, and people are likely to continue shopping online even after the pandemic …  and the pattern of overconsumption is here to stay. 

“[So], it is undoubtedly vital to raise awareness about pre-loved items, as they may positively contribute to our environment.”