Christmas is around the corner and the supply chains crisis has added to the pandemic disrupting even more traditional Christmas shopping.
Esade behavioral economics lecturer Pedro Rey answered some questions regarding this issue for the report published at Do Better. Here you can find the complete interview:
Will we spend more this Christmas?
The main factor is that people will be less worried about meeting up and there will be more reunions. This will be the first time in two years that friends and relations can at last spend time together at Christmas rather than just parents and children. This will obviously mean spending more on food and presents. We all like to give presents personally, and if we’re going to see each other more, we’ll spend a lot more.
How will the global supply crisis affect this spending? Will it curtail it?
We’d have to look at the statistics but people want to spend money and if they have the chance to, this won’t be a problem. For the last two years, people haven’t been able to celebrate anything and have been spending much less. As soon as they see a glimmer of light at the end of the tunnel, spending will increase.
Since November we’ve been hearing that there’ll be shortages of many products and that we should shop soon to make sure we can buy our presents.
No matter how much advice we get, we always end up doing last-minute shopping because we can’t shop so far in advance. This means a tremendous bottleneck at Christmas, and as a result, many of our purchases will be less than ideal.
For the last two years, people haven’t been able to celebrate anything and have been spending much less
So we’ll have to settle for second-best presents?
We feel obliged to give presents and we’ll end up buying presents we’re not very pleased with. Firstly, this will make the price of these second-best products go up, and secondly, it will trigger a massive logistics problem. This happens every year but this year it will be even worse because of returns: when people are not keen on their presents, there will obviously be far more returns.
Will this affect the economy?
The main problem it may cause is the huge logistics problem of trying to deliver on time, being unable to, cancellations and deliveries not happening. Unrealised consumption, i.e. buying something and then having to wait for it to arrive, is obviously not the same thing as impulse buying when you see a product in front of you. In countries like Spain, consumers are not used to actual shortages. This doesn’t just happen at Christmas, we’ve spent all year getting used to waiting for things not available immediately. Might this slow recovery down? Yes. It’s a drawback because, providing you can rest assured that your products will arrive, a lot of impulse buying, i.e. purchases you don’t hesitate to make when the products are available immediately, will decline and all this could slow down the recovery from the crisis.
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