Saver's remorse

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Saver's remorse

  1. 1. $ AVER’SREMORSEA (serious) argument for why consumersshould spend instead of save.
  2. 2. We’ve all felt it before: that pang of guilt after buying something that mighthave cost just a little too much. And as consumers, it probably happens to usmore often than many of us would like. We make decision with our sights setonly on the near future, disregarding long-term consequence. We buy thinkingabout today with disregard for tomorrow. Myopia, the technical term for it,gets thrown around by marketers and behavioral economists alike.
  3. 3. Ever wonder what might happen ifyou never had those moments ofimpulse purchase? Can consumersbe so concerned with the future thatthey lose focus on the day-to-day?Surely, with a resurgence of frugalityfollowing the Great Recession, the jumpin consumer saving and the (somewhatnegligible) decline in consumerism,there is a segment of our populationwho aren’t spending.
  4. 4. Turns out I’m not the only person with this thought: a team of business schoolprofessors at Harvard and Columbia have conducted research that that suggests saver’sremorse exists in conjunction. And what they found is that in cases of buyer’s remorseis that “People feel guilty about hedonism right afterwards. But as time passes the guiltdissipates. At some point, there is a reversal and what builds up is a wistful feeling ofmissing out on life’s pleasures."
  5. 5. They statistically proved that self-control made peoplefeel worse in the long run than shortsighted, spur-of-the-moment purchases. In an experiment, consumerswere asked to make a purchase while thinking abouttheir distant future. They ended up spending moresignificantly money and bought more indulgences (likejewelry or vacations). Without this prompting, theybought practical—and boring–goods, like socks. Theend result? Buyer’s remorse led consumers to be morevirtuous, while spender’s remorse led to extravagance.
  6. 6. By requiring consumers to think about their future, researchers were able to indirectly frame a purchase decision and makeconsumers spend, not save. Sound counter intuitive? Maybe. But you don’t think that you’re last dying breath would be wishing you hadn’t purchased those 300 Starbucks coffees instead of planning for retirement.
  7. 7. What does this mean for marketers? Does it make our job easier? Not exactly. I’m still wondering whetherSaver’s Remorse is just a knee-jerk reaction to changes in spending that are happening because of our downeconomy. Everyone’s so used to spending that the idea that they won’t (or can’t) makes consumers feel likethey’re missing out. If saving habits continue, it’s likelywe’ll just see Saver’s Remorse become less significant, and that idea that you are “missing out" by not buying the newest, biggest TV might start to dissipate.
  8. 8. What does this mean for marketers? Does it make our job easier? Not exactly. I’m still wondering whetherSaver’s Remorse is just a knee-jerk reaction to changes in spending that are happening because of our downeconomy. Everyone’s so used to spending that the idea that they won’t (or can’t) makes consumers feel likethey’re missing out. If saving habits continue, it’s likelywe’ll just see Saver’s Remorse become less significant, and that idea that you are “missing out" by not buying the newest, biggest TV might start to dissipate. What do you think?
  9. 9. IMAGEShttp://freeyourmindonline.net/images/living-frugal.jpghttp://ignitenews.mohawkcollege.ca/wp-content/uploads/2011/03/empty-pocket.jpghttp://www.wellheeledblog.com/wp-content/uploads/2010/05/piggy-bank-on-money.jpghttp://www.celestron.com/c3/images/files/product/21034_ambassador80az_large.gifhttp://www.mybigfatengagement.com/wp-content/uploads/2010/09/palm-tree.jpghttp://www.p2pays.org/webshare/education&outreach/Clipart/tv_set.jpg

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