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There’s no avoiding the sudden rise of costs, eerie geopolitical tensions and overall suspense for what the economy will put us through next. Consumer Confidence has been down the past few weeks. It had dropped in all four states, with a greater increase in South Australia. People are expecting a harsh reality and ‘bad times' for the economy in the next year.
An impending recession likely means higher unemployment and a stagnated economy. Though, that doesn’t mean stagnated business growth. Fortunately, within both inflation and recession periods, consumers still purchase. Though, their behaviour and decision-making process tends to alter.
Below we’ve identified consumer trends to look out for during this inflationary period and shared growth opportunities that brands can consider.
Almost one in five shoppers are willing to pay more than 10 per cent extra for goods and services sold by a business with a strong purpose. The younger generations are at the forefront and the willingness to pay more declines sharply with age. Ranging from 71 per cent among Generation Z to 38 per cent among Pre-boomers.
Consider This: Ensuring your brand, product or service serves the younger demographic is required for future growth and to put it blankly, business sustainability. Begin by understanding what is purposeful to them. Cater to demographics that are likely to make investments or purchases during these periods. Monale Growth Plans identify consumers' emotional purchasing behaviours by leveraging Helix personas by Roy Morgan.
Though the Millennial demographic is more likely to make purchases from brands with purpose, value for money is still the driving factor for shopping behaviour (41% of consumers look for value first). Buy now, pay later payment options will provide greater security for consumers who are wishing to continue large discretionary spending.
Consider This: During this period, 47% of Australians are reluctant to make large purchases. Just 25% of Australians say now is a ‘good time to buy’ major household items. Providing payment options for larger purchases would provide better security and trust for consumers. Monale's Repeat Business Growth Plan identifies key growth opportunities across customer journeys.
Lyka, a scaling homemade pet food company that received AUD 6.5 million in funding in 2021, implements value-first well and proudly acknowledges that they aren’t the cheapest. Their consumers care about pet health, value personalisation and sustainability. Their product isn’t just demographic-specific, it's a product that’s aligned to the values of the demographic. Though it’s not known to be the cheapest in the market, Lyka remains firm on the value for money. What is it? Better pupper health. At the end of the day, value for money is shown through outcomes and results. Not by making a quick buck or saving a buck.
Consider This: The definition of 'value for money' differs across demographics. Identify what are the key benefits and values for your target demographic. Lead with the key benefit during this inflationary context. It’s not just about age, occupation and where they live anymore. Monale’s Growth Plans segments customers by key benefits and creates messaging according to target segments.
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