Is Retail Therapy Actually Therapeutic?

When Cal State East Bay Professor Lan Wu moved to the United States for graduate school from her native China, she remembers feeling one distinct emotion.

Loneliness.

“I left all my old social connections behind in the country I grew up in and became a first-generation immigrant,” Wu says. “Even still from time to time, I feel overwhelmed by [bouts] of loneliness and find it challenging to keep my head above water.”

But Wu, a marketing scholar, says she turned her experience into research about how loneliness affects consumer behavior, what marketers should know about lonely buyers and why brands are better off not exploiting them.

A SERIOUS PROBLEM

Standard definitions of loneliness include “being without company” or [feeling] “cut off from others,” but in sociological terms, the experience is more difficult to pin down. John Cacioppo, director of the University of Chicago’s Center for Cognitive and Social Neuroscience and the nation’s foremost expert on loneliness has said that loneliness is “perceived social isolation” and “weakly related” to a person’s actual social network. More accurately, loneliness is about the quality and depth of the interactions themselves.

Cacioppo — whose research has been an inspiration to Wu — has completed several studies that not only show large spikes in the number of people reporting that they are lonely (more than 25 percent of the American population) but that the condition of loneliness is linked to serious long-term health problems and medical costs.

In all, efforts to assess the economic impacts of loneliness, and to raise awareness of the signs and symptoms of loneliness have gained steam in recent years. And Wu, given her background in business, is raising questions around one of the most high-profile habits of lonely people: so-called retail therapy.

“Social inclusion is a very important topic that can have long-term detrimental effects if not addressed,” Wu says. “Shopping can be used as a coping measure. I [wanted to know], if you’re lonely, [are] you’re more prone to impulse buying?”

THE LONELY CONSUMER

Armed with that inquiry, Wu began a study that looked at the connection between loneliness and personal consumption, in particular how impulsive buying — the tendency to buy without planning — is associated with feelings of loneliness or social isolation.

The study, entitled “The Lonely Shopper: How Self-Regulation Mediates the Relationship Between Loneliness and Impulsive Buying” focused on an in-depth qualitative survey of 200 adults representative of the U.S. population, and found that those who feel more socially isolated are not only more likely to demonstrate impulsive buying behaviors — but also that the habit is underpinned by a lack of typical self-regulation.

Put another way, the desire to relieve feelings of loneliness is so strong, Wu found, it can actually suspend a person’s ability to control their own behavior.

“Isolation makes it harder for consumers to establish clear and specific goals when they shop, which undermines their physical or mental capacity to resist spontaneous buying impulses,” she says.

RETAILER RESPONSIBILITY

It’s the type of information that can be used to either help stores promote sales, or possibly help consumers understand and modify their own behavior. But Wu, as a marketing expert, is interested in taking a different view of what needs to change in the retail landscape compared to her profit-minded peers. Rather than focusing on margins and sales, or even helping consumers resist the urge to buy, Wu believes companies have a critical role to play in how they approach and build relationships with customers (see Building Brand Community).

However, her research is still preliminary and has thus far focused on impulsive buying at brick and mortar retail stores. The impact on loneliness of the ever-increasing online shopping world remains unclear.

According to the U.S. Census bureau, e-commerce retail sales for the first quarter of 2017 accounted for 8.5 percent of all total sales, an increase of 4.1 percent from the fourth quarter of 2016 and a 14 percent increase from the first quarter of 2016.

The professor hopes to add to the scholarship on this issue in the future, as she says there is already literature about social media and its relationship to loneliness, and she too believes it has serious implications for impulsive buying.

“Ultimately, social media sites are making money through online advertisements so when you’re using social media, they feed you relevant, highly-targeted messages to shop online instead of going into a store where you’d have the opportunity to talk with other customers or employees,” she says.

BUILDING BRAND COMMUNITY

Building off her research that confirms lonely shoppers are more likely to engage in impulsive buying, Associate Professor Lan Wu believes companies that focus on creating loyal, lifelong customers, will be better off in the long run than those that target lonely consumers.

“If retailers can create a reason for [lonely consumers] to keep coming back, they’ll not only help address loneliness, a condition with important ramifications for society, but the customer will likely start encouraging others to support the company as well,” Wu says.

One way to do that: Build a brand community.

The term brand community refers to a group of people who share a common interest and develop a community — either in person or online — based on that interest. Generally speaking, Wu says brand communities fit into three categories: A pool-structured community, a central figure community or a common interest community.

A pool-structured community is one that focuses on a shared value or belief, such as a feeling unity among others in a shared political party. By comparison, a central figure community is built around an individual, for example the Oprah Winfrey book club. Finally, a common interest community — the best option for businesses according to Wu — is built around a brand or product.

“Take for example, Harley-Davidson,” Wu says. “There are people who enjoy not just the Harley-Davidson brand, but events hosted by the brand like fundraisers. Those events encourage and create chances for customers to interact with each other and with the company.”

The iconic motorcycle company has actually been the case study of business researchers who wondered at how the brand bounced back from near death to becoming a global powerhouse. The answer? According to Harvard Business Review, “Harley-Davidson retooled every aspect of its organization — from its culture to its operating procedures and governance structure — to drive its community strategy.”

Wu believes there are many companies that can offer their clientele similar experiences.

“The connection associated with community based brands makes consumers feel confident about their purchases and wanting to spend more money with a particular entity in the future,” she says.