Why Festive Spending Peaks: Insightful Consumer Behavior

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Imagine walking through the ever-busy streets of Lagos during this festive season. The air rings with excitement, festive lights cast a warm glow, and shops are filled with enticing displays of clothes, gadgets, and gifts. Amid this celebration, it’s impossible to miss the unbridled enthusiasm for shopping. But why do people spend so much more during festive seasons? Unlike other times of the year. I believe we should educate ourselves on the reasons for our unbridled spending during festive seasons.

Read also: https://ritefinance.blog/2024/12/21/avoid-these-15-costly-holiday-shopping-pitfalls/

This article draws insights from a study titled “A Study on Consumer Buying Behaviour During Festive Season” by N.R. Narayanan, Associate Professor at Guruvayurappan Institute of Management, Navakkarai, Coimbatore. Published in the International Journal of Research in Social Sciences (March 2018, Vol. 8, Issue 3), the research explores consumer behaviour during festivals in Coimbatore, India. Using both primary and secondary data, Narayanan’s findings shed light on the psychological, cultural, and market-driven factors that influence festive spending.

Festivals and the Spending Boom

Narayanan’s research found that 47% of respondents spent more during festivals than on regular days, while only 14% refrained from increasing their expenditures. What drives this surge in spending? According to the research, the following are the reasons for the rise in spending:

  • Cultural Traditions and Rituals
    Festivals are deeply intertwined with cultural and religious practices. In India, celebrations like Diwali, Pongal, Onam, and Christmas are not just events—they’re rituals that encourage spending. Most festivals like Christmas and new year celebrations come with buying new clothes, gifts, and decorations. They symbolize renewal and prosperity. As Narayanan notes, these traditions create a strong psychological pull, making festive shopping an almost mandatory activity.
  • Marketing and Promotions
    The study highlights that 37% of respondents were drawn to festive shopping because of better value for money. This is due to promotional offers, discounts, and sales that are common place during festive seasons. Retailers strategically capitalize on these occasions to attract customers, making it hard to resist deals. And putting you under immense pressure to impulse-buy.
  • Emotional Joy and Social Bonding
    Shopping during festivals is more than just acquiring goods. It’s more of joy and social connection. Nearly 11% of respondents associated festive shopping with happiness and pleasure, while 20% shopped to follow rituals and customs. The joy of gift-giving and decorating homes enhances the festive spirit and strengthens social bonds.

Read also: https://www.insightxtra.com/2024/11/understanding-nigerias-digital-services.html

The Spending Psychology: What Influences People Spending Behaviour

Narayanan’s study found that 52% of respondents didn’t plan a budget for festive shopping. In all, this lack of planning that budget entails often leads to impulsive spending. Some of the psychological and social factors contribute to this irrational spending behaviour include:

  • Impulse Buying: Usually, during festive seasons, varieties of and colourful items are on display either in physical stores or on online stores. These festive displays and limited-time offer often advertised create urgency, leading to unplanned purchases. And unplanned purchases are the bane of unplanned spending.
  • Social Influence: Often during festive periods, people want to keep up with the Joneses The desire to keep up with societal expectations or neighbours often forces people to spend more, whether on expensive gifts or elaborate decorations. This keeping up appearances also shows up during these periods in the level of people’s generousity.
  • Seasonal Exclusivity: Products’ launches are sometime planned for festive seasons. New movies releases are often planned for this period. Festivals sometimes bring exclusive collections or new product launches, tempting consumers to over spend on what’s perceived as a once-a-year opportunity. But are they really once-a-year opportunity?

Read also: https://www.insightxtra.com/2024/12/impact-of-nrtb-2024-on-non-resident.html

What Do People Spend On?

What people spend on could also account for why people tend to spend more during festive season like Christmas, thanksgiving, new year festival etc. Narayanan’s findings reveal fascinating patterns in consumer preferences during festivals. He discovers that people spend more on:

  • Clothing tops the list of what the people spend on during festive seasons. 77% of respondents in his research prioritize new outfits for the festive season. We all know that kids (as well as adults) love new outfits during festive seasons.
  • Electronics and Jewellery follow after clothing. Spending on these items are driven by discounts and the festive allure of upgrading personal items.
  • Decorative items and gifts also see a rise during every festive season. People usually want to create a festive ambiance and share joy with loved ones. And these engender spendings on painting, decoration and giving of gifts.

Read also: https://www.insightxtra.com/2024/10/understanding-nigerias-tax.html

Traditional vs. Modern Shopping Habits

Interestingly, even in the era of e-commerce, Narayanan’s study found that 64% of respondents preferred visiting physical stores during festive seasons. This preference stems from the feelings that shopping in person evoke. It also stems from the festive atmosphere in markets, and the instant gratification of taking purchases home immediately. However, 34% of respondents combined online and offline shopping, highlighting the growing role of digital platforms.

Read also: https://www.insightxtra.com/2024/10/tax-savings-understanding-in-kind.html

The Impact of Spending on Satisfaction

Does a surge in spending lead to a heightened level of satisfaction? Narayanan’s research discovered that 72% of respondents felt satisfied after festive shopping, attributing this to the emotional fulfillment of giving and celebrating. For many, the act of shopping isn’t just about acquiring goods—it’s a way to express love, connect with cultural traditions, and participate in the communal joy of festivals. Do you feel the same way?

Retailer Strategies for Festive Success

The study’s outcomes are beneficial to both the consumer and the retailers and sellers of products. The study offers valuable recommendations for retailers looking to tap into the festive market:

  1. Focus on High-Demand Products: Since clothing, electronics, and festive essentials are what people spend more during festive seasons, it’s best that their product offerings should centre on these items.
  2. Create an Inviting Atmosphere: Retailers who evokes festive emotions by creating inviting atmosphere through festive decorations and in-store experiences are better placed to draw more customers.
  3. Leverage Promotions: Customers often demand better deal during festive seasons. Discounts, loyalty programs, and exclusive offers align with consumers’ desire for value during festivals.

In Conclusion

N.R. Narayanan’s research provides a comprehensive look at why people spend more during festive seasons. From cultural traditions and emotional fulfillment to marketing strategies and social influences, the factors driving festive spending are deeply intertwined with human behaviour and societal norms.

For consumers, understanding these drivers can help foster mindful spending and greater satisfaction. For retailers, leveraging these insights can lead to more effective strategies and higher sales during festivals. Ultimately, festive spending isn’t just about shopping—it’s about celebrating life, community, and shared joy.

This article, based on N.R. Narayanan’s study published in the International Journal of Research in Social Sciences, March 2018 (Vol. 8, Issue 3), invites you to reflect on the deeper reasons behind festive shopping and its impact on our lives.


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