Worries about terrorism are at the forefront of our thoughts these days. We were rattled by brazen attacks on innocent Parisians. They were bookended by numerous incidents of terrorism across the world --- from Beirut and Egypt to Israel and Mali, and even here within the United States. To add to the misery, statistics from reliable sources inform us that terrorism is escalating globally. For instance, the Global Terrorism Index reports that deaths from terrorism have increased nine-fold since 2000, and by 80% within the past year alone. More than 32,000 people lost their lives to terrorists in 67 different countries in 2014. If this trend continues, the future looks bleak.

Certified Safe by Iain Farrell Flickr Licensed Under CC BY 2.0
Source: Certified Safe by Iain Farrell Flickr Licensed Under CC BY 2.0

Terrorist attacks have all kinds of large-scale consequences for society, from affecting political and voter priorities, to encouraging acceptance of draconian policing and surveillance practices. It can be argued, however, that the most significant effects of terrorism are economic in nature. In this post, I want to consider how terrorist attacks affect consumer behaviors more narrowly, and work out who wins and who loses as a result.

Regardless of whether it occurs in our neighborhood or across the world, every terror attack causes us worry and affects our thoughts and our actions. A terrorist attack triggers two opposing consumption impulses. Experiencing loss of control, our first impulse is to get out (and stay out) of the way of future attacks and to be safe. If this means abandoning our entrenched habits and changing what, where, and how we buy things, so be it. At the same time, seeing a terrorist attack in the news heightens the awareness of our own mortality. This sparks an impulse to enjoy our limited and uncertain life to the fullest. We behave in greedy and materialistic ways.

The Impulse to Avoid Risky Situations and Be Safe

For obvious reasons, commercial and crowded venues such as malls, movie theaters, trains, buses, restaurants, and hotels are prime terrorist targets. These are the very places we frequent as consumers and so, after an attack, we naturally experience a loss of control. After all, people just like us have suffered terribly, even lost their lives, for no other reason than being in the wrong place at the wrong time while doing normal, everyday things. Could this happen to us the next time we are in a store, on a train, or watching a movie?

Terrorism definition by Jagz Mario Flickr Licensed Under CC BY 2.0
Source: Terrorism definition by Jagz Mario Flickr Licensed Under CC BY 2.0

When a person loses control over any aspect of their life, they will go to great lengths to try and get it back.  A common way to gain control is by changing behavior that is likely to put them in harm’s way, even if the behavior is entrenched and habitual.  Consumer psychologists Michal Herzenstein, Sharon Horsky, and Steve Posavac recently studied the effects of the loss of control due to terrorism on Israeli consumers. (Many studies of effects of terrorism on consumers are done in Israel because Israeli citizens have had to deal with numerous terrorist attacks over the past two decades). The authors found that to deal with their lost sense of control, Israeli consumers engaged in a variety of avoidant behaviors, disrupting their normal buying habits drastically.  A common strategy is to stop shopping in stores and malls and migrate to online buying. Another is to change one’s normal shopping patterns to avoid risky situations.  A third one is to move more consumption back into the home. After 9/11, people ate and entertained at home more often and restaurant sales fell off a cliff. In a Money magazine article, reporter Amy Marcus provides other examples of Israelis changing their shopping times and even abandoning favored stores:

“My husband used to meet his friends at 11:30 p.m. to buy groceries, figuring that terrorists are unlikely to attack a supermarket so late in the evening. Likewise, Ofra Goldman, the Jerusalem-based art lecturer, says she drives an hour out of her way to buy clothes for her girls, instead of shopping at the mall five minutes from her apartment.”

The Impulse to Seize the Day & Enjoy Life to the Fullest

For most of us, a deadly terrorist attack’s immediate effect is to produce a heightened awareness of our own mortality and the briefness of the time we have left. And this heightened sense of what psychologists call “mortality salience” produces lasting effects on consumers’ behaviors. It increases the appeal of goods and services that provide people with a sense of comfort and stability. After 9/11, Americans not only cocooned by staying home more, but they also gravitated towards foods like macaroni & cheese, mashed potatoes, lasagna, and chocolate desserts.  This makes sense; nutrition research shows that when stressed, people tend to choose such comfort foods.

Material Girl in a Material World by Wayne S. Grazlo Flickr Licensed Under CC BY 2.0
Source: Material Girl in a Material World by Wayne S. Grazlo Flickr Licensed Under CC BY 2.0

Consumers resort to using coping mechanisms to deal with mortality angst. One coping mechanism is to seek what marketing scholar Elizabeth Hirschman has called “secular immortality” by acquiring and collecting materialistic possessions. For instance, in the aftermath of 9/11, American consumers heeded President Bush’s call to go shopping “and enjoy life, the way we want it to be enjoyed” by buying homes, cars, appliances, furniture, and electronic gadgets in record numbers.

There are also a number of studies which show that exposure to thinking about death leads to heightened materialistic behaviors and lowered concern for others or the environment. In one survey conducted in 2003, consumers who were more fearful of becoming a terrorism victim were more interested in buying branded goods and were also likely to consume compulsively. The authors concluded that:

“As mortality salience exacerbates existential anxiety, people can use materialistic consumption as a means to buffer such anxiety. People seem to find comfort in material goods, probably because these goods confer symbolic meaning and allow individuals to transcend their mortal lives through a seemingly enduring cultural artifact.”

In other words, in an effort to deal with our death-related anxiety, we become selfish and self-serving, and use consumption of status objects as a way to do so.  Research on consumer ethics also points to the same conclusion. In one study from 1994, ethicists found that when compared to consumers in relatively peaceful Egypt (at the time), those living in terror-prone Lebanon were less idealistic, more Machiavellian, and viewed a variety of questionable consumer practices as more acceptable. They were less sensitive to moral issues.

Who Loses and Who Gains From Terror-Driven Consumer Behavior Shifts?

These two consumption impulses beg the question about the net effects of terrorist attacks on different constituents.

  • Small businesses lose.  The consequences of consumer behavioral changes from a terrorist attack can be catastrophic for small businesses. Overnight an established restaurant or store may turn into a ghost town for no fault of its own. Amy Marcus describes a popular Tel Aviv café that had to shut down after a Palestinian suicide bomber detonated himself on its patio in the late nineties killing three customers. Even though the owner spent vast sums to rebuild the café, its regular patrons never came back. Marketers have the credo “Never take any customer for granted” and terror attacks show how powerful it is.
  • The environment loses big time. As terrorism brings one’s mortality into sharp focus, its collateral effect is to increase greed and intensify desire to acquire more possessions than others. Concerns about environment become irrelevant. In one study conducted by psychologists Tim Kasser and Kennon Sheldon, participants who were exposed to death harvested 12 to 13 more acres of forest (out of a maximum of 100) than control participants in a forest-management game. Frighteningly, their pre-existing values did not matter. Those who valued self-acceptance and affiliation were just as likely to strip the forest bare as those who valued financial success. Counter-intuitive as it sounds, terrorists may be causing far greater harm through shifting our attention away from issues of environmental conservation and climate change, and encouraging us to behave in irresponsible ways over the longer-term.
  • Luxury brands win. On the flip side, both the need for comfort and security, and a greater weight on materialism favors strong, luxury brands. Consumers flock to status symbols. In their research, consumer psychologists Naomi Mandel and Steven Heine found that thinking about death increased the interest of participants in purchasing luxury brands like Lexus vehicles and Rolex watches compared to control participants, but there were no effects on low-status brands like Pringle chips. Obviously, no ethical marketer would want to profit from the devastation of innocents, but for luxury brand marketers, terror attacks are clouds that come with thick silver linings.

None of us can control when or where the next terrorist attack will happen. But we can certainly curb our consumption impulses, act responsibly, and do our bit to fight the terrorists in our roles as consumers.

I teach core marketing and pricing to MBA students at Rice University. You can find more information about me on my website or follow me on LinkedIn, Facebook, or Twitter.

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