Sales are down across the board for retailers and brands, especially those in the fashion industry. Store closures to slow the spread of COVID-19, followed by an economic downturn in many cities, have forced consumers to shop less frequently. Now brand owners are hoping that a phenomenon called “revenge shopping” will save them. According to The Economic Times, revenge shopping or revenge spending is an “overindulgence in retail therapy by consumers who have missed shopping at their favourite outlets due to the lockdown.” The idea started popping up at the end of March when consumers in China began to exit their lockdowns. Since then, numerous publications have optimistically written about the shopping spree that brands desperately need.
Whether or not revenge shopping is happening, though, remains unanswered. PYMNTS.com writes, “The big problem with revenge spending is that it never really came to fruition in China. Yes, consumers got back to the malls and some long queues were seen at regional favorites like Nike. But by and large the predictions of a spending surge as the coronavirus abated were quickly replaced by a more conservative tone.” This trend has continued as Europe and the U.S. reopen as well. Shoppers are eager to go to stores, mainly to get out of the house, but theoretically, those who have money want to spend it as well. Unfortunately, unlike past economic downturns or store closures that have led to revenge shopping, the current situation is different. Consumers are cautious about going out in public, and with record unemployment numbers, many don’t have the money to partake in splurge shopping for nonessential items. Even the wealthy, who luxury brands count on to survive, are spending conservatively to avoid showing off their economic status.
It is possible to see a plus that revenge shopping is not fanning out to be what analysts had hoped. Without splurge shopping, overconsumption is reduced and consumers think through their purchases more. However, weighing the economic good of revenge shopping with a negative impact on the planet, brings up a different concern. If a business is not profitable or cannot stay in business, it can't implement sustainability initiatives. Already several brands, including brands that have become successful because they claim to be sustainable, like Madewell, have said that the pandemic has forced a reconsideration of sustainability projects. That does not mean they are abandoning the company's progress, rather that the brand, and many others, are trying to stay afloat. Sustainability initiatives sometimes take a complete redo of brand operations, which costs lots of money and may not necessarily increase revenue. Vogue Business writes that caring for the environment may be too important to ignore, though. "Whether or not sustainable investments will be prioritised moving forward will likely hinge on one key question: whether public and industry opinion now categorise sustainability as a basic need."
As for how revenge shopping impacts the implementation of sustainability investments, it depends on if the phenomenon actually happens. After months of dropped sales, a sudden increase in spending would help keep brands in business and maybe give them some extra funding for projects that do good for the environment, but as of August, revenge shopping has not led to a sustained increase in sales. The initial jump following reopenings at select retailers seems to be more a fluke than the start of a V-shaped recovery. Now that a quick return to normal is not guaranteed, brands will have to figure out how to keep in business without vengeful consumers. Maybe sticking with sustainability pledges is the way to do that; only time will tell if brands' environmental investments pay off.