Why coronavirus panic buying is on a roll among shoppers
People are not rational beings at the best of times - but Covid-19 has led many of us to some bizarre panic buying
Over the past few days we have experienced a rush on many stores, and a few minutes on social media will expose you to pictures of empty shelves and long queues.
This phenomenon is known as panic buying and these chaotic scenes are not unlike what Cape Town experienced two years ago when all the bottled water was bought in a water-scarcity panic.
This rush on shops and wholesalers has happened in many parts of the world as the Covid-19 pandemic has spread.
Panic buying during times of food scarcity is a means of survival, but SA is not experiencing famine, nor has the retail supply chain expressed any concerns in this regard. Ultimately, the behaviour is normal and probably unavoidable as one person's fear of scarcity quickly spirals into a panic contagion.
EXPLAINING THE CONSUMER PANIC
People are not rational beings at the best of times, but during a crisis we are susceptible to two major behaviours.
First, we tend to ignore the greater good of the community and figure out how to protect ourselves and those close to us. Second, we display classic cognitive biases present in waves of consumer panic.
Both of these responses might be somewhat counterproductive to the calm and orderly distribution of SA's abundant supply of toilet paper, but they are natural.
Think of a herd of animals when a single member senses danger and starts to run. The rest of the herd usually follows suit, with nobody deciding to fact-check before wasting their time.
In this regard, we too are easily influenced by what others do in the face of danger. When a panic buying spree starts, for example, logic is put aside and our cognitive biases take over, five of which I mention here:
• Loss aversion: We are far more motivated by the fear of losing (or being hurt) than we are by the possibility of winning.
As a number of people decide to stockpile, the rest look on and think to themselves (even if out of character): “Hey, if I don't do the same, I'll be the loser in this situation.” This fear of being left in a worse situation fans panic buying to spread like a, well, virus.
• Probability neglect: In times of threat, we tend to throw out the probabilities and assume the worst. Statistically, as of March 16, when the panic buying really gained traction, there were 116 confirmed cases of Covid-19 and no deaths.
While the disease is very serious and things will get worse, 116 cases in a population of close to 60-million mean that there is unlikely to be a national food (or toilet paper) shortage. Nonetheless, thousands of wealthier South Africans participated in a panic contagion and cleaned out the shelves of their local grocery stores.
• Bandwagon effect: This is just a simple case of “Hey, if my friends are doing it, I'd better do it too”. It's just how we have always acted as people.
• Availability heuristic: This is another bias often cited during times like these. It proposes that we are more heavily influenced by recent memory.
For example, we might see some pictures of empty shelves from around Europe and North America and panic, instead of drawing on memories of the fact that no mention has been made of a food shortage, nor of anyone being restricted from the shops (even during lockdown, shopping has been permitted globally).
• Reactivity: People don't like their personal freedom to be attacked, and when they are told that they need to restrict their purchasing, a part of them is drawn to do the opposite. When we are told to take only four, we want five. When we are told to not empty the shelves, well.
All of these behaviours are melded together in a panic-buying spree like we experienced this week.
Fortunately, many retailers have responded well by implementing quotas, designating shopping hours for vulnerable shoppers and not hiking prices.
Some panic buyers have even apologised on social media and offered to provide supplies to anyone who missed the rush.
THE SOUTH AFRICAN INEQUALITY STORY
We have one of the world's most economically divided societies. I would estimate that around 7-million South Africans live in households that have the means to action some form of stockpiling.
That leaves 53-million people that are not economically able to fill up a trolley at short notice in this way.
Unlike in Western Europe and North America, the whole country is not able to participate in a panic-purchasing spree even if it wanted to.
SA is not experiencing an actual food shortage, but the panic spree further exposes our inequality.
This inequality will continue to be exposed in many ways during the crisis.
The low-income majority live in overcrowded conditions, take public transport, use an overburdened public health system and do not have hot running water at home.
All of this will make the pandemic a far more severe experience for the poor.
A WORD ON TOILET PAPER
The poster child of panic buying is the faithful toilet roll. I get asked about why society is so obsessed with stocking up on toilet paper during times of crisis.
I have heard complex explanations around how it is about control (in uncertain times), reducing disgust (during pandemics) and comfort (as a reaction to stress).
I personally think the answer is more simple. Toilet paper is easy to stockpile (it doesn't go off), it does not have many substitutes (unless you start to get creative) and most households don't keep a month's supply, so when a lockdown is pending it is a
A number of people can see themselves going without food for a few days, but not toilet paper.
WHAT CAN WE EXPECT GOING FORWARD?
I have no idea how the virus will continue to impact SA. There are obviously best- and worst-case scenarios.
From a consumption perspective, a few things will happen. In the short term some people will continue to stock up and others will realise that there is enough to go around.
Overall, the spike will flatten and unless social distancing works, we will possibly turn from overcrowded malls to overcrowded hospital beds. Let's hope not.
• Lappeman is head of projects at the University of Cape Town Liberty Institute of Strategic Marketing
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