Shopping warning for South Africans

Experts warn that spending tends to increase in cold winter months, and South Africans should carefully manage their budgets to stay on track with their financial goals.

A 2010 paper, The effect of weather on consumer spending, from the Journal of Retailing and Consumer Services, tracked how weather influences sales by affecting consumers’ moods.

The study found that the weather affects spending patterns in several ways. First, when the weather is bad, people go out to the shops less often, and sales decrease.

The weather also impacts the sales of different types of products. For example, ice cream sales go down when the weather gets cold, while oatmeal sales increase.

Retailers are aware of this and specifically alter their displays accordingly. The study also proposed that weather and sunlight change how people spend, both directly and indirectly.

This is particularly true because a lack of sunlight can negatively affect one’s mood, making one more irritable and low on energy.

They examined six years of sales data from an independent tea shop and found that temperature had an impact on sales.

The colder the weather, the more tea was sold. However, when the weather was really cold, especially with snow, sales dropped off again. This is likely because people prefer to stay at home these days.

Interestingly, the study found that people spend more on sunnier days. However, some mood-regulating behaviours were also noted.

In other words, when the sun isn’t out, people may consume more products, such as tea, to make themselves feel better.

Since this paper was released, one major shift has occurred in the shopping market in South Africa and globally. That is the rise of online shopping, which was pushed forward significantly by the Covid-19 pandemic.

Today, online shopping is a common part of many people’s lives, whether they buy clothes and electronics or order groceries through a service like Checkers Sixty60.

Several eCommerce services have entered and expanded in South Africa’s market in the last 15 years. These include Amazon, Bash, and Takealot, which launched in 2011.

This shift implies some notable changes in how people engage with retail services depending on the weather. Previously, adverse weather may have made people less inclined to leave the house and spend money.

Now, they can shop from the comfort of their homes and get the dopamine they lack from sunlight. Services like Uber Eats also give people easier access to hot drinks and meals without needing to go outside.

Retail spending heats up

Sanlam’s head of channel and segment marketing, Lee Hancox, explained on the Kaya Biz podcast that retail sales heat up during this time of the year in South Africa.

“We tend to get a bit of the winter blues, so what better way to make ourselves feel good than by doing a bit of shopping and getting that dopamine hit that we’re maybe missing in those winter months,” Hancox said.

As a result of shorter daylight hours, the brain produces more melatonin and less serotonin, and that can lead to symptoms of depression.

“So, our bodies are looking for those impulsive ways to feel better and to get that dopamine hit,” she said, urging consumers to look inward and recognise their emotional spending triggers.

For example, if they’re stressed, cold, or bored, they may go onto retailers’ apps and scroll through them. This could lead to impulsive and unnecessary purchases that they cannot afford.

Researching and understanding how you’ve spent over the summer and winter months in the last few years can also help you become more aware of your shopping habits.

“I think being aware of spending patterns and of the way that you react to certain situations really helps you to break the cycle,” she said.

It should be noted that increased spending in the winter, at least in specific areas, is unavoidable. As the weather gets colder, electricity bills tend to increase.

Other costs, such as extra blankets, comfort food, heaters, new curtains, emergency repairs, and clothing, may also bite into your budget.

Additionally, as cold and flu season heats up, you may spend money on doctor visits or medication. Since many of these expenses are easy to overlook when budgeting, they can set you back significantly.

“You need to adapt your budget. You need to make allowances for it and also maybe just build in a bit of a feel-good fund so you can go and have a treat or buy something that you’ve been eyeing,” Hancox said.

However, it is crucial to track your spending and ensure you are not blowing all of your money on extra coffees, for example, just because it makes you feel better.

Hancox gave two key pieces of advice to help consumers manage their spending during winter. The first, she said, is the 24-hour rule.

“If you really want to buy something, leave it for 24 hours and then go back, especially with the bigger purchases, and see if it actually is essential,” she explained.

Secondly, Hancox urged consumers to have a vision of their financial goals. Keeping a vision board or something on your phone could be a good way to remind yourself.

“Never lose sight of the long-term plan, and when you do feel you are losing sight, engage with your financial advisor so they can help keep you on track,” she said.