R. Jeanette Martin
One danger in the current crisis, experts say, is shoppers who wait for deals: postponing spending freezes the economy.
The holiday retail frenzy probably has sensible folks communing with their credit card statements just about now. All the more so when everyone's bracing for the worst and nervously minding their pennies.
Not so this purchasing fool.
Talk about the perverse consequences of good advice: any memo to self about trimming some fat from the old spending habit is like a message to squeeze into that teeny, slinky skirt I used to wear. Impossible! Just when I'm about to eat carrot sticks, I mistakenly scarf down a couple of Krispy Kremes.
In my psychological universe, finances feel a lot like food. At the very mention of cutbacks, my body goes into deprivation mode and I just suck up all the nasty deep-fried dough and drippy glaze I can get my sticky paws on.
Budgets are like diets. They only serve to stimulate my hunger. An estimated 5 per cent of the population, apparently, has compulsive buying issues, and recessions offer their own hazards: dropping prices.
I'm determined not to use any plastic this week, but a hot new pair of fake-fur boots suddenly appears in a nearby store window. Ughh, Rosedale prices. I must have them!
Then something strange happens: it's as if I go into a blackout, during which some kind of financial activity takes place. Shortly thereafter, the boots magically appear in my apartment.
"Some people are very seriously over-shopping, especially with the kinds of bargains out there," says April Benson, a New York psychologist and author of I Shop Therefore I Am: Compulsive Buying & The Search For Self. "It's like giving matches to a pyromaniac."
Yep, that's me. I'm a fiscal fire hazard. Having been a massage therapist for many years, you'd think I'd be familiar with the dwindling clientele at this time of the year and the ensuing lack of income. It's cash I need to fund my penthouse suite - okay, it's a bachelor on the top floor. But it is in the depths of Forest Hill. Yep, I'm a sucker for location.
Despite my efforts to be thrifty in difficult financial times, I have acquired a massive box of boots - so massive that recently a man who cleans my carpet asked, "Ma'am, do you have a problem?" My guilty face said it all. Benson's caution echoes in my mind: for the junkie shopper, "happiness is only as far away as the next purchase," next purchase, next purchase....
Dilip Soman, a professor of marketing at U of T's Rotman School, says one of the problems is that "credit cards dissociate payment from the product. People used to be price-focused, but now they don't think of flashing a card as an act of paying."
Though he predicts a decline in consumption, he says it won't be in products as much as in services. "If you buy a Starbucks at 3 pm every day, a lack of that is a loss, whereas losing house cleaning [doesn't feel like] as much of one." Massage is no exception, he tells me. "It will be hit more than tangible products."
He also sees a likely shift from high- to low-ticket items. "We tend to trade down the quality of what we buy and keep the quantity," he says.
Soman is surprised at the way people justify their spending in bad times. "Consumers do strange things," he says, citing an acquaintance who rationalized an expensive vacation by pointing out all the things he won't buy next year. "He has borrowed stuff from his own future," Soman says.
Dale Orr, managing director of Canadian Macroeconomic Services at financial forecaster Global Insight, is pretty confident most folks will be careful with their cash in recessionary times. "Not many spend irrationally. Most hunker down. They realize that they have to watch their credit and are overwhelmingly rational," he says.
Says Robert Soroka of McGill's Desautels Faculty of Management. "Consuming is largely an emotional rather than a rational activity. When the forecast is gloom and doom," he says, "the consumer's automatic-buy switch gets turned off."
So what's with me? I'm a shoo-in for an experiment in reverse psychology. I am a full-out faux-fur-clad moron (lookin' good). The end of the financial world is near, yet I'm out there contradicting consumer behaviour. The markets are crashing, but the guilty voice inside is saying, "I'll take one in every colour."
But then again, maybe I'm an accidental anti-recessionist. "We need more people like you to get out there and keep spending," Orr reassures me. "As the economy gets weak, prices drop and consumers start expecting the prices of things like furniture and cars to keep falling. Why spend today when the item will be cheaper in the future? This is a dangerous dynamic. When we postpone spending, it makes the economy weaker."
So think of me as a willing benefactor doing my part to help make this recession a short one. A friend of mine muses, "In some circles you might be called a visionary."
Soroka puts it differently: "Let's just say that you're ahead of the curve with respect to consumer confidence... uh, way ahead."
Ever the expert, Orr encourages me with, "Keep up your shopping and help my wife rescue the Canadian economy."
Sigh. Maybe I should meet up with his wife sometime - at Holts, just for "coffee"?