Professor Andrew Ching, a marketing expert on the Carey Business School faculty, recognizes that consumer stockpiling of household goods during the coronavirus pandemic resembles “panic buying.” But, he says, there’s a rational element to it as well.
The spread of the COVID-19 coronavirus around the world has coincided with runs on supermarkets and other retail stores, as fretful shoppers have stockpiled items they believe will soon be out of stock or priced at many times the usual cost.
Some observers call it “panic buying.” But a Johns Hopkins University expert on consumer behavior, while acknowledging that panic is an element of the phenomenon, says stockpiling can be seen as a rational approach to shopping during a pandemic.
“In this current situation, consumers are seeing that the prices of some retail products are going up two, three, four times what they were before, so they decide they should buy now – and buy as much as they can – rather than take the chance of waiting while prices possibly increase and supplies decrease. It’s almost the rational thing to do, even though it looks like panic buying to some,” says Professor Andrew Ching of the Johns Hopkins Carey Business School.
Ching, the co-author of a forthcoming Marketing Science research paper on consumer stockpiling, written with the University of Toronto’s Matthew Osborne, offered these additional insights in a Q&A:
QUESTION: We’ve seen examples of stockpiling by shoppers in the United States and the United Kingdom. Is it a phenomenon like the coronavirus itself, not confined to one region of the world?
CHING: That’s correct. I know anecdotally of stockpiling in Asia, for example. In Hong Kong, earlier in the outbreak, people went through a stage of panic buying. For weeks, the supermarket shelves were empty of products like toilet paper. Now they’re back to normal. People had already stockpiled enough, so they didn’t feel the need to continue doing it. They reached a point where they realized they had enough supplies to last a long time. That has helped keep more products on the shelves.
Do you see normalcy returning soon to the U.S. shopping environment?
I’m afraid we haven’t seen the worst yet of COVID-19 in the U.S. It may not peak for at least another few weeks. And if that’s the case, then people may start to get very anxious, and we may see even more panic buying than we’ve seen so far.
Stockpiling could slow down as people come to see, as they did in the Hong Kong example I cited, that they have enough on hand. Also, the American public should realize that retailers are not going to be running out of merchandise anytime soon. The United States is one of the top producers and exporters of food and other household products, so it’s not likely the country will be caught short-handed, even during this emergency.
What could retailers do to discourage stockpiling by shoppers?
It would help calm the public if the big retailers came out with a statement that they intend to keep their shelves stocked as fully as possible and not raise prices to an alarming extent. Supply chain managers could put out a similar message, maybe even providing statistics from across the industry that indicate they have a large supply of goods that won’t run out.
Some retailers are keeping certain products out of sight, hidden near the cashier’s area. That way, if people really need a certain product, they have to ask for it. It helps prevent the tendency of the more panicky shoppers to grab something from the shelves because they happen to see it and think they might need it.
We’ve seen retailers try rationing by limiting purchases of certain products to two or three per shopper. The problem is, even with people following this restriction, so many of them are buying up these allotted products that they’re still disappearing from the shelves.
Many people these days, especially in the U.S., have a lot of space in their homes. Is that a factor in stockpiling?
It’s not uncommon for people today to have large houses with lots of closet space, attics, basements, garages, big freezers, even off-site storage units. I think that does contributes to people’s determination of how much they can stockpile. Nature abhors a vacuum, as the saying goes.