How fear will change our shopping habits

Fear of chemical warfare changes shopping habits

by BBC New Online's Emma Clark

Across the world central bankers are lying awake worrying about what everyday people are going to spend their money on.

The threat of recession coupled with the shock of the terrorist attacks on New York has made "consumer confidence" headline news.

"Suddenly Western civilisation will survive if you the consumer does the right thing," quips Dr Don Slater, a reader in sociology at the London School of Economics.

Retailers are asking themselves not only whether consumers will continue to spend, but what customers will buy during today's turbulent times.

Sea-change

On September 11, the world changed for many people into an uglier and less secure place.

Consumers are expected to shun the luxuries in life

"I've noticed there is now more a sense of what is morally appropriate, and there is quite a lot of self-consciousness," says Dr Slater.

"It's unseemly to be going on holiday and there is to be nothing frivolous."

Dr Hugh Phillips, who researches the psychology of shopping at Bournemouth University, agrees.

"The post shock trauma in consumer behaviour will be felt most at the luxury end of the market."

In a recent piece of analysis modelled on consumer behaviour after the death of Princess Diana, he argues that conspicuous consumption or entertainment will be seen as "inappropriate".

Protection against attack

To date, the most striking and immediate impact on buying patterns has been the rush to improve individual security.

Many just don't feel like shopping right now

In the UK this week there has been a run on gas masks and protective suits following fears that terrorists might resort to chemical or biological warfare.

Although probably a fad, the buying spree will lift sales for army supply stores around the country which have been selling thousands of masks in only a few days.

Sue Mepham, a sales consultant at HM Supplies in Camberley, has already placed orders for more stock.

After we ran out of gas masks, people were terrified. They were asking, 'Where can I get one?'

Sue Mepham
HM Supplies

"We sold out yesterday and usually we don't sell any. It all started on Monday morning," she says.

"The phones were going non-stop with people asking if we had them.

"After we ran out, people were terrified. They were asking, 'Where can I get one?'"

US panic buying

In the US, the fervour has been even greater.

Despite Mayor Giuliani's efforts to calm the city of New York, there has been a run on tinned food, tankers of water, first-aid kits and firearms.

Even in California, which upholds tough gun control laws, sales of firearms have gone up 50% in the last week.

"This is not like the Gulf War when American troops went overseas," says Lynn Franco, director of the consumer research center at the Conference Board in New York.

"There has been an attack on domestic soil and this has created an insecure atmosphere.

"Defence is going to benefit from any spending."

Long-term trends

In the long term, however, Dr Phillips at Bournemouth University predicts that there will be more significant shifts in consumer trends.

People will now change and there will be a growth of individualism. There will be a distrust of large organisations

Dr Hugh Phillips
Bournemouth University

He believes the shock of the terrorist attacks in New York will be the "last straw" for consumers, following food scares, such as mad cow disease, and fuel shortages last year.

"People will now change and there will be a growth of individualism. There will be a distrust of large organisations, including government.

"People will unconsciously blame governments because this will be one more thing where they have not protected us again."

Flight to quality

As a result, he argues that in the coming months people will prefer to spend money on quality goods, even if this means that they buy less.

Supermarkets may end up selling more organic food

Trustworthy brands will become more popular in fashion, as will organic food in the supermarket sector and well-designed durable goods such as washing machines.

Dr Phillips also believes that consumers will stick to retailers they trust, rather than shopping at a wide range of stores.

"The challenge to business is to adapt as there will be big business opportunities," he warns.

"The worst thing is to go into wait-and-see mode - you will lose out."

He argues that companies will need distinctive marketing campaigns, adding that many who survived the last recession did so through strong marketing.

Pressure to spend

For the present, however, governments will be more concerned with persuading consumers to spend full-stop.

Since the attacks, sales in US retail sector have dropped substantially and people are only just beginning to return to the shops.

While basic staples including supermarket products will hold up, durables, tourism, restaurants, cars and other big-ticket purchases will be under pressure, says Ms Franco at the Conference Board.

In such an unpredictable environment, the one certainty is that retailers will have to work hard to keep consumers happy and to adapt to changing tastes.