Media-Led Panic Buying Over as Consumers Await Certainty on Stimulus

People are prepped for CCP virus lockdowns
March 25, 2020 Updated: March 25, 2020
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With market analysts suggesting that panic buying has been mostly a media-led phenomenon, reporters at The Epoch Times confirmed today that supermarket shelves in New York City are well stocked.

Global data analytics and measurement firm Nielsen has identified a number of human nature-related thresholds that have influenced consumer behavior around the world and in the United States as the CCP virus has spread, and as measures to combat it have been introduced. The patterns suggest that consumer behavior has been linked to the news cycle, and that as much of the population transitions from a phase characterized as preparation for quarantine to “restricted living,” in-store visits will be significantly reduced.

The Epoch Times refers to the novel coronavirus, which causes the disease COVID-19, as the CCP virus because the Chinese Communist Party’s coverup and mismanagement allowed the virus to spread throughout China and create a global pandemic.

Negative News Sells, Drives Panic Buying, Stockpiling

A recent Nielsen report suggests that consumers have increasingly turned to local media as the CCP virus spreads, with a “notable spike in local news viewing between early February and early March,” according to the report. Local media can provide information on scarcities or potential shortages in local stores.

Leia Reid is a data journalist at the social intelligence company Brandwatch, and writes in a recent article that “our data suggests there could be a relationship between media hype around panic buying and subsequent spikes in conversation around things being sold out and panic buying.”

“The number of press articles mentioning coronavirus stockpiling or hoarding are lower than organic social mentions,” says Reid, “but a peak in news mentions of stockpiling came just before a spike in social mentions of the practice.”

Reid says that according to Brandwatch data, which measures online mentions of the term “out of stock” alongside a store name, “there is a concentrated period in which lots of news articles around stockpiling are published between March 3-6.” Reid then advises users to “scroll across to social mentions of things being out of stock, and you’ll see how these mentions flourished between March 6-8.”

The Brandwatch data is remarkably consistent across the United States as well as for the UK and Australia. “Negativity is, of course, a large driving force in these conversations,” says Reid. “The negative mentions we found were often fueled by price hikes on items like sanitizer, disinfectant, and face masks, as well as toilet paper.” Other staples listed as out of stock included such items as bottled water (in the United States), rice and pasta (Australia), and long-life milk (the UK).

Human Nature Meets Social Media

According to Jim Roberts, Professor of Marketing at Baylor University: “When we are reminded of our own mortality, we search out products that give us comfort. We naturally buy more when we are threatened. We often seek comfort in our spending particularly in times like these.”

In an interview from March 23 with marketing specialist Kaitlyn Rieper, Roberts pointed out who stands to benefit from consumer angst.

“The media benefits from creating hysteria—more people watch and listen when they are frightened,” he said. “There is something called the availability bias that can explain why we are so fearful. We view things that we have been recently exposed to as more prevalent than they really are.”

coronavirus empty shelves
Empty shelves in the toilet paper section at a Target store in Manhattan, New York, on March 13, 2020. (Chung I Ho/The Epoch Times)

Guilty Consciences

Research from the UK’s Institute of Economic Affairs (IEA) suggests that while consumers view panic buying negatively, they still do it. Only 14 percent asked said they thought it was acceptable to stock up on toilet paper, though this was one of the first products to be sold out as panic buying took hold.

“There has been a marked difference between what people say is socially acceptable and how they actually behave in practice,” according to the IEA’s Julian Jessop. “On the one hand, it feels wrong to buy large amounts of a particular product simply because you are afraid the shops are about to run out, especially when this could deprive other people who might be in much greater need. … On the other hand, lots of people appear to have been panic buying anyway.”

Panic Buying: A Self-Fulfilling Prophecy

Marketing professor Utpal Dholakia explained in a recent article that panic buying is an inherently unplanned phenomenon. When nervous consumers see others lined up outside a supermarket, in real life, or on TV, they think that they need to stock up on supplies while there are still some left.

“By its very nature, a panic buying spree comes out of the blue,” said Dholakia. “With the coronavirus, as news about its spread in China circulated for weeks, there was little impact on Americans’ shopping behavior. As it spread to Italy and other countries, there were ripples of concern. Then suddenly, it seemed as if everyone was rushing to the store to stock up their pantries and refrigerators at the same time.”

Such consumer behavior is described by Nielsen as “pantry preparation”—the stockpiling of primarily shelf-stable food, hygiene, and health-related products as a time of uncertainty approaches. Food purchases often tend more than usual toward products with longer shelf lives, including canned goods and dry products such as rice and pasta. Pantry preparation is accompanied by increases in the number of store visits and much larger basket sizes.

A 2017 article in the Journal of Consumer Research suggested that compensation for loss of control is the driver behind panic buying. In times of pending crisis, according to the researchers, “consumers compensate for a loss of perceived control by buying utilitarian products (e.g. household cleaning agents) because of these products’ association with problem solving, a quality that promotes a sense of control.”

Moving to the Next Stage

Panic buying can’t continue indefinitely, however—there are only so many chicken thighs your deep freeze can hold. Many of those consumers who have built up stocks of food, toilet paper, and other essentials will have satisfied their desire to prepare a pantry for uncertain times ahead. If lockdowns are mandated by federal or local government, such as Gov. Andrew Cuomo’s “New York State on PAUSE” executive order, consumers may elect to remain at home if they perceive the danger of infection to be peaking in line with the most extreme form of prevention.

According to the IEA: “There are many good reasons to believe the current shortages will be temporary. For a start, most people who felt the need to build up a buffer of basic supplies have surely now done so already. We should therefore now be past the peak in demand.”

Nielsen‘s researchers believe that consumer behavior begins to shift when the advent of quarantine conditions are announced, with online shopping increasing as brick-and-mortar stores see fewer visitors—in some cases because of reports that shelves of desirable products are already bare.

Once living conditions are restricted by actual quarantine, shopping trips tend to be more severely restricted, while deliveries of online purchases may also be curtailed by the reorientation of online suppliers such as Amazon toward items such as sanitizer and other health-associated materials, as well as bottlenecks in existing last-mile delivery systems.

The final stage in Nielsen’s consumer-behavior model is described as “Living a New Normal,” when consumers return to their daily routines such as work and school. This phase is associated, however, with an increased level of cautiousness about health and hygiene. In this phase, supermarket shopping will tend to gradually return to normal, though online shopping is expected to remain attractive for many.

Defusing Consumer Anxiety

At a press briefing at the White House on March 15, President Donald Trump tried to reassure consumers. “You don’t have to buy so much. Take it easy. Just relax,” he said.

One way to combat the urge to panic buy may be to reduce negative messaging. When asked how consumers can best navigate social media during the CCP virus crisis, Jim Roberts advises users to step back from it.

“Cut back on media exposure and distract yourself by trying to ease others’ burdens. If you turn off your TV and avoid social media you will reduce your anxiety level,” said Roberts.

“Take the emphasis off yourself and you will reap psychological benefits.”