Exploring personal savings versus hedonic consumption in the new normal

Abstract

Purpose

Consumers can spend their disposable income on hedonic consumption or save for the future. Their preferences were altered by the prolonged life and livelihood-threatening experiences of the pandemic. This paper aims to study the spillover effect of the pandemic experience on consumer savings attitudes and hedonic purchase preferences in the new normal.

Design/methodology/approach

The authors conducted 35 in-depth interviews with consumers in India. The data were analysed thematically.

Findings

The results showed that when fear of life and negative emotions of the pandemic persisted, consumers became short-term focused, moved towards materialism and increased hedonic spending. Alternatively, individuals who faced substantial financial hardships resorted to an increased preference for savings. The relationship between changes in savings orientation and hedonic consumption was found to be moderated by consumer's individual differences in financial vulnerability and life history strategies.

Practical implications

As the trend towards increased hedonic consumption and preference for luxury products continues, the study findings can be used to devise effective marketing strategies to tap the emerging segment of mass luxury consumption.

Originality/value

Despite ample work being conducted in the hedonic consumption domain, it has not been studied in conjunction with savings orientation, a significant determinant. This research links personal savings orientation with hedonic spending and substantiates that purchase decisions are cognitively weighted as a choice of discretionary spending against the opportunity to save.