‘Feel good’ spending is on the rise

An experiment conducted by Interac shows Canadians are opening up to non-essential purchases and the lift in mood they cause.
InLife

A new behavioural science study released by Interac shows Canadians are increasingly making non-essential purchases to boost their moods amid the pandemic.

The study, conducted by Hill+Knowlton Strategies for Interac, took 1,088 Canadian debit users through simulated shopping experiences and diary exercises to test the emotions associated with their spending and how it changed depending on what they were buying.

It found that “feel-good” spending – defined as any purchase that’s “non-essential” and made to boost someone’s mood – is on the rise as Canadians look for new ways to tap into satisfaction, confidence and pride. This is especially true when the purchases are linked to someone’s passions, an effect that was seen regardless of the price.

This was especially true for Generation Z and Millennial adults, with a respective 66% and 58% respectively more likely to do so than in pre-pandemic times, compared to 35% of Baby Boomers.

But the experiment also allowed Interac to test the survey answers against actual actions. For example, 65% of Canadians say they are more likely to make a “feel-good” purchase when they are feeling happy, compared to 26% who say they are more likely when they are sad and 24% who say when they are stressed. But the experiment showed that someone’s reported mood had almost no impact on their purchase behaviour, with all three groups just as likely to make a “feel-good” purchase.

It’s not just purchases for one’s self that are having this effect. Among the experiment’s other findings were that, when an item costs less than $50 of someone’s own money, giving it as a gift is more likely to be a happy experience than buying something for yourself, with the inverse being true when an item costs over $50. Gen Z also seems to be slightly more generous than other generations, with 75% feeling happy about buying a gift, compared with 67% of the average population. Introverts are also more likely to report feeling happy about a gift purchase than extroverts, and are also more likely – perhaps counter-intuitively – to give clothing and beauty-related products.

The findings will help Interac better connect with its consumers, says Andrea Danovitch, AVP of marketing and brand at Interac, at a time when its services are more in-demand. The company reports a 333% increase in payments through its Debit eCommerce service than at the beginning of the pandemic, with almost one billion e-Transfers sent since April 2020.

“The findings that came out of this experiment will help us continue to move our InLife platform forward. One interesting finding was that our emotions are heightened when our feel-good purchases are driven by our passions, and even a low-value purchase can trigger a positive emotional response,” she says. “We’ll be leveraging these insights as we look to brief our future campaigns.”

Interac’s InLife brand platform launched in April with a pair of aspirational spots that showed Canadians pursuing their passions through a combination of Interac’s payment technology, and the freedom of spending without accruing debt.