Will people go on revenge buying in post COVID world?

French brand Hermes’ Guangzhou flagship store in China reportedly did $2.7 million in sales on the day it reopened in April. This is the biggest single-day shopping at a luxury outlet in China. Long queues were also seen outside outlets of brands such as Apple, Nike, Gucci, Estée Lauder and Lancôme, among others, in Chinese cities. This, analysts say, is a phenomenon called Revenge Shopping.

Simply saying, revenge spending refers to overindulgence in retail therapy by consumers who have missed shopping at their favourite outlets due to the lockdown. Especially, the high net worth individuals, who are flush with cash and could not spend a dime due to lockdown, may go on a spree of buying luxury goods. Of course buying groceries and other essentials may not be called a Revenge Buying.

As per a study of RedQuanta, Indian consumers may forego big ticket retail purchases but may go for reasonably priced indulgences, or what is called a 'Lipstick Effect. According to research by RedQuanta on what Indian consumers are thinking, brands selling reasonably priced feel-good indulgences or accessories will benefit.

As per PwC, a spree of “indulgence consumption” may happen in India after the lockdown is lifted. However, Nikhil Prasad Ojha, partner, Bain & Company, says most shoppers will stick to what they need to buy and hold the urge to splurge for more predictable times.

Some sort of revenge buying is expected immediately after lockdown is lifted. However, due to widespread job losses and salary cuts and uncertainty around employment, revenge buying may not sustain for long in India.