Panic buying is back. Are supermarkets better prepared?

By Ruth Hogan, originally shared on Inside Retail, 30.5.21

With four major Australian cities plunged into lockdown this week, essential
retail businesses are under pressure on almost all sides of the country.

Videos and images of bare toilet paper shelves have once again surfaced
online as consumers fall into old habits, forcing supermarkets to bring back
purchase limits on high demand items.

But have grocery retailers learned from the lockdowns of the last year and are
they better prepared to deal with panic buying this time around?

Varying approach from supermarkets

While some stores are already under pressure from panicked consumers,
Coles has acted quickly and introduced a two-item limit on purchases of toilet
paper and face masks in NSW, QLD, WA and NT (Darwin and Alice Springs),
with consumers in the latter state also restricted to two purchases of mince,
chicken thighs and chicken breast.

“We have plenty of stock in our supply chain, and purchase limits are a
temporary measure to help us manage demand so that we can return our
stores to a fully-stocked position as quickly as possible,” a Coles spokesperson
told Inside Retail.

“We ask that customers stay calm, shop normally and be respectful to our
hard-working team members.”

It seems Coles has been the most proactive in limiting purchases. Aldi
Australia does not have any product restrictions in place at this time. A
spokesperson told Inside Retail that the retailer is working closely with
business partners to ensure that there is plenty of stock available across its
stores and is asking shoppers “to resist any compulsion to purchase more than
they normally would, and to shop with kindness and consideration.”

Currently, Woolworths has only introduced a two-pack limit on toilet paper
after panic buying led to some shortages in store and online.

CEO Brad Banducci described the situation as “frustrating”.

“It seems the almost primordial urge to pantry stock toilet paper is still
symbolic of these times. We expect to be back in full stock in the next few days
and as previously, we’d ask you to only buy what you need,” Banducci said in a
letter to customers this week.


“We have plenty of stock of most essential items, with more continuing to flow through from our distribution centres.”

Jana Bowden, an expert in consumer psychology and consumer engagement at Macquarie University Business School, believes supermarkets are taking
appropriate action in response to panic buying.

“They are placing buying limits on products quickly and as needed, they have
shored up supply so that stock outs are temporary and replenishment is
timely, and they have improved their PR and strategic communication with the public to allay fears of product sell-outs,” she told Inside Retail.

“In other words they have learned from over a year’s worth of experience
dealing with panic buying cycles and they are much more proactive at
managing and responding to consumers’ reactionary buying behaviour.”

The groundwork done by supermarkets in 2020 to improve online shopping
services will also likely alleviate the pressure on stores. However, when
logging on to both websites prior to publication, both were slow to display
information, which could signal difficulties dealing with increased web
traffic.

Both Coles and Woolworths offer contactless home delivery and click-and-
collect services across their store network and like many smaller, independent retailers such as IGA, they lean on third party delivery services to ease
pressure on their own teams.

On the frontline

A consistent theme in the supermarkets’ response is a call for calm and for
shoppers to show respect towards retail staff. Customer aggression towards
retail staff has increased due to the pandemic, and earlier this year
Woolworths introduced bodycams and additional CCTV to tackle the ongoing
issue
.

Given the essential status of supermarkets and grocery retailers, shoppers and
frontline staff are also at a heightened risk of being exposed to community
transmission of Covid-19.

In the last week alone, 17 Woolworths supermarkets have been listed as Covid-19 exposure sites. And due to the highly contagious nature of the Delta variant, there is more pressure than ever before to maintain hygiene and social distancing measures.

Banducci highlighted the importance of transparency around exposure sites in his update and reassured customers that all impacted stores undergo a deep
clean.

“We’ll continue to be as transparent as possible, including posting notices
online and in-store when we learn of confirmed cases,” he said.

As part of its efforts, Woolworths’ Health & Safety ambassadors are positioned
at the entry of all its supermarkets in the Greater Sydney area between the
hours of 9am- 7pm to help with QR code check-in, cleaning baskets and
trolleys, and monitoring the number of customers.

A spokesperson for Coles advised Inside Retail that stores have increased the
frequency of cleaning high touchpoint areas such as self-checkout screens and
keypads. Customers are encouraged to use sanitising stations prior to entering
the store, to wear masks in stores, where required by state government, and
check in via QR codes at the front of the store.

Bowden praised supermarkets’ efforts in communicating openly with
customers and said the key to shaping consumer behaviour lies in managing
consumers’ cognitive thought processes and their emotional reactions.

“The supermarkets have learned to deal with consumers’ feelings through the
provision of facts, information and transparency — by announcing clearly what steps they are taking to assure supply. This communication has a calming effect. It’s based on evidence and it builds trust,” she said.

“The results of this emotional connection are evident in Roy Morgan’s 2021
trust data, Woolworths and Coles came out on top as Australia’s most trusted
brands. In fact Coles was the fastest mover in terms of building trust in 2020
jumping several positions on the trust scale during the depths of the Covid
health crisis.”

Building up this trust doesn’t happen overnight or by accident, according to
Bowden, “it takes clear strategy and constant work on the brand to deliver
results like that”.

The psychology behind stockpiling

Dan Monheit, co-founder of Hardhat, a creative agency built on behaviour,
believes there are multiple behavioural biases at play when it comes to panic
buying.

The first being “Zero Risk Bias”.

“This speaks to our need for complete certainty. Any reduction in risk is good,
but complete elimination of risk is disproportionately good. Therefore buying
our normal six roll pack of toilet paper is fine, yet, there’s a small chance that
we’re going to run out,” Monheit said.

“Whereas, right now, it’s going all-in and buying up the six packets of toilet
paper to eliminate that. People know it’s crazy but do it anyway.”

When combined with Scarcity Bias, “there’s a sense that things are running out and that we should act fast to get what we want before it’s all gone”.

“Then there’s Social Proof … It’s very hard to see other people walking through
the supermarket with shopping trolleys laden with goods and not get the
sneaking suspicion that we should probably do it too,” he said.

“The unfortunate reality is that the cost of acting as a good reasonable rational
citizen is pretty low. The risk of not doing it is perceived to be pretty high. Even though rationally, we know everything is probably going to be fine, but we feel as if we should buy everything because what if it’s not?”

Bowden describes it as “a primed fear response to uncertainty” and believes
social media also has a role to play.

“The first thing we saw spread this week with the lockdowns in NSW were
images on social media and in the media of empty shelves devoid of toilet
paper. That has a vicarious effect on us,” she said.

“We don’t even need to be in a supermarket watching people panic buy, just
the mere images on social media send consumers into an anxious state.
There’s an emotional over-representation of fear in consumers’ minds and it
overwhelms our ability to think straight and rationally.”

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