Consumers in Australia have changed their behaviour as prices rise and confidence falls, dropping big name brands for plain labels, and buying pre-loved goods rather than new.
Local data extracted from the latest global Accenture Consumer Pulse Survey, of more than 10,000 people across 16 countries, shows 38% of Australian consumers are adopting a more strategic approach to control expenses.
The report indicates that savvy spenders are opting for experiences over big brands and luxury items.
And more than half (56%) of Australians are prioritising store-owned brands.
However, 38% are planning to increase spend on leisure, travel and wellness in the coming 12 months.
Market economists say consumers are clearly feeling squeezed by higher interest rates and living costs.
"However, above average business activity data would suggest that their customers are still prepared to spend more on goods and services," write Citi analysts in a note to clients.
At investment bank Morgan Stanley, analysts say the position of retailers is changing by the day. Myer this week reported that sales in the first six months of 2023 barely moved on a year ago.
"While spending in late 2022 was solid, many retailers highlight the softening of spending especially in the past three months," the analysts say.
"And the outlook remains weak as Aussie consumers cut back spending in response to significant rate hikes."
Young Ham, global head of innovation and partnerships at ASX-listed martech Pureprofile, says marketers should focus on understanding changing needs.
"Practising empathy in messaging is also paramount at this time as consumers are doing it tough," he says.
Key findings from Australian responses to the Accenture survey:
- A rise in second-hand goods purchases with 66% of shoppers having bought pre-loved items
- 32% expect to spend more on healthcare
- 50% expect to spend less on luxury products
- 33% plan to take two to three leisure trips in the next 12 months
- 44% expect to spend less on eating out at restaurants and socialising in bars/pubs
- 25% expect to spend more on at-home entertainment
- In-store shopping is the most preferred method, with 59% choosing to shop in-store
- Significant interest in using augmented and immersive shopping for real-world goods (55%) and virtual goods (55%)
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.