Displaying items by tag: inflation

Tech and digital salaries continue to steady out but remain strong for key skillsets such as cybersecurity and AI, according to the latest salary guide report from recruitment sector company Talent.

GUEST OPINION:  The global economy has undergone many major upheavals in the form of heightened inflation, increased interest rates and unstable oil prices. As these headwinds continue to be felt across Australia and New Zealand (ANZ), business leaders must focus on resilience and risk management.

• As Aussies get ready for summer holiday travel, inflation and cost-of-living concerns drive 66% of vacationers to seek out bargain holiday deals
• 1 in 3 Australians have been scammed when booking, with a third (35%) of those losing $500-$1,000
• 61% of all adults worry more about digital safety than physical safety when on vacation

COMPANY NEWS: Today, McAfee Corp., a global leader in online protection, revealed Australia-specific findings from its new ‘Safer Summer Holidays’ Travel Report. The report surveyed 7,000 people across seven countries to discover how safe it is to plan and book travel online, and how cautious people are when interacting with digital tools while traveling abroad. The research reveals 29% of Aussies have fallen victim or know someone who has fallen victim to an online scam while trying to save money when booking travel. 35% of those who had money stolen have lost $500-$1,000 before their trip has even begun, while 59% lost up to $1,000.

GUEST OPINION:  The global economy has undergone many major upheavals in the form of heightened inflation, increased interest rates and unstable oil prices. As these headwinds continue to be felt across Australia and New Zealand (ANZ), business leaders must focus on resilience and risk management.

Demand for executives positions in Australia had its largest fall in six months according to the latest monthly report on the availability of jobs for middle Australia by the EL Group HR consulting firm, which also forecasts a “big fallout” in jobs heading into 2024.

The operators of the National Broadband Network NBN Co said today their wholesale prices have resisted inflation and have not increased in real terms over the last ten years, “despite the fact that most of the company’s input costs have been subject to inflation”.

COMPANY NEWS: Circana, the world’s leading advisor on consumer behaviour, has released the latest installation of its highly respected 2023 FMCG Outlook report series, Shifting Shopper Behaviours, and the report identifies some clear challenges and opportunities for the sector as Australian shoppers change their buying habits in response to cost of living pressures.

The latest report Shifting Shopper Behaviours report outlines that shopping behaviours have changed rapidly in the post-COVID era. With inflation skyrocketing, petrol prices peaking and household costs continuing to soar, Australians are responding to these challenges with clear changes in their shopper habits. 

Circana’s Head of Product and Solutions, APAC, Alistair Leathwood: “People are responding to the soaring cost of living as best they can. We are already seeing rapid changes in their behaviour as inflation bites. How shoppers behave will continue to change swiftly as household budgets squeeze tighter, and price and value become even more intrinsic to shopping decisions. Loyalty will be tested. Values will be tested too. Based on our research and engagement with shoppers through our Circana Shopper Panel, overwhelmingly, 93 percent of Australians are ‘somewhat or extremely concerned’ about the effects of inflation.  For the FMCG sector, this means that shopper insights will become even more important for manufacturers and retailers as they recalibrate, develop and execute new strategies to address the changing behaviours of the market.”

The report covers several key areas of focus for brands and retailers including:

• 93 percent of Australians worried about the impact of inflation

Australians are severely impacted by continual increases in interest rates and the cost of living.  Three-quarters of shoppers are concerned about the cost of general household bills (72 percent), food and groceries (77 percent), while half are worried about the cost of petrol (54 percent) and their rent or mortgage payments (46 percent).

As Australians continue to brace themselves against the impact of inflation, a clear pattern has emerged of shoppers allocating their spending towards the purchase of essentials as opposed to discretionary items.

Leathwood: “Australia’s grocery channel is a $120 billion industry and dollar sales are up 6.8 percent compared with the prior year and unit prices are up 8.6 percent, reflecting the broader inflationary narrative of essentials now recording faster price increases than discretionary items.  This demonstrates the degree of financial pressure that households are experiencing and shows why shopper behaviour is changing so rapidly across the country.”

• Seven out of ten shoppers are now making unplanned purchases to buy products on special, 56 percent of shoppers will change brands/stores seeking value

Value is now the overwhelming priority when Australians make decisions to change brands. Seven in 10 Aussies are now likely to make unplanned purchases after seeing products on promotion or discounted (68 percent) or switch to a new brand if it offers new features or benefits that appeal (69 percent). 80 percent now actively stock up on products when they are on sale and two-thirds believe that retailer/own-label products are a good alternative to branded products. 56 percent of Australians have tried a new store or brand due to perceived value.

Leathwood: “Retailers and manufacturers need to show shoppers that they are going through this journey and difficult period with them. Honesty and transparency underpin a solid relationship, especially during disruptive times.  The cost-of-living crisis is hitting Australian households hard.  Circana research shows that value for money is the primary driver of shopping behaviour for the majority of Australians.”

The CommBank Household Spending Intentions retail spending index fell by 21.3 per cent in January 2023, suggesting the rising weakness in the retail space. In retail, the largest lifts were in specialty retail, alcohol goods, family clothing and discount stores, with a spending decline at department stores, home supply warehouses, household appliance stores and furniture stores.

Australian spending habits are similar to global shopping trends. Circana quarter one global research shows that 96 per cent of global consumers intend to adopt cost-saving behaviours over the next six months; meanwhile, of the 40 per cent who intend to increase in-store and decrease online shopping, they say it’s because the delivery costs are too high.

• Value now trumps sustainability

As a result of the increased cost of living, Australians are in line with the global trend towards prioritising affordability over sustainability for the first time since the middle of the pandemic.

Leathwood noted: “While the desire of Australian households with lower incomes to live sustainably is higher today than the overall pre-pandemic average, our 2022 shopper research highlights challenges to shopping more sustainably. 41 percent of shoppers believed that sustainable products were priced too steeply while 21 percent believed that the quality of sustainable products was not consistent. The cost-of-living crisis in Australia is inadvertently forcing many people to think more sustainably especially as soaring energy prices force a review of household energy consumption and practices however this is not necessarily translating into the purchase of ‘green’ products at the supermarket checkout.

“Our research also indicated that half of Australians will still try to buy environmentally friendly products if possible, while 68 per cent are trying to purchase locally grown/made products over imported products when available. All Australians are concerned by the ethical status of the products purchased and the companies that these products were purchased from. In particular, seven in 10 Gen Z consumers would pay higher for products that aligned with their purpose and core beliefs.

“Overall, affordability tends to be a leading factor in the decision making for Boomers and Gen X who are the bulk of the consumer market. Gen Z and Millennials include sustainability of a product and company core values as an added deciding factor when making purchases but increasingly buying behaviour is being impacted by affordability as cost of living bites. Finding ways to deliver sustainability in an affordable way should be the key priority to achieve greater share of wallet.”

• Omni channel most important part of the channel mix

The COVID pandemic ushered in a new era of online purchasing trends that continue into the post-COVID current era, showing that omni-channel purchasing is a permanent fixture in society today. Grocery retailers reported that omni-channel shoppers were particularly highly valuable, spending more than double compared with in-store only or online-only customers.

Leathwood recommended: “As more of us shop online, retailers and manufacturers alike must treat and analyse online channels as shopper-led businesses using data and technology.  Brands and retailers must put shoppers at the heart of everything they do.  This is absolutely critical as our research clearly shows that omni-channel shoppers are highly valuable. Fast-tracking smart investment in data technology and shopper solutions will provide a clear 360-degree view on who your shoppers really are, and how to satisfy them.”

Globally, shoppers are increasingly savvy at using a mix of channels to inform their purchases.  Physical ​retailer websites are most frequently used for product information, online ​marketplaces and e-tailers for price comparisons​, retailer apps for seeking out promotions​, and social platforms for future purchase inspiration.

Leathwood: “The whole umbrella experience considers every engagement, thought and feeling your customer has with your brand including how they engage on your platform, from search function to shopping cart, and it’s vital to deliver and connect on every touchpoint. Online shoppers are also more loyal to retailers, so winning the omni-channel shopper is critical to capture their tendency to spend more share of wallet with a single retailer.”

• Data the highway to success - who shoppers are, how they shop and what they value

As Australians adapt and change how and when they shop, their expectations of retailers and manufacturers are likewise changing. Brands and retailers that respond to individual shopper needs, especially during the current cost-of-living crisis will come up on top.   Knowing your shopper in the moment is key to the why behind the buy.

Australian consumers expect value-based shopping so successful brands and retailers must differentiate their customer types and quantify their sales contribution to prioritise initiatives.

Leathwood: “Through understanding the factors influencing or disrupting shopper behaviour, both manufacturers and retailers can more confidently adapt their strategies to better address specific needs and influence shopping behaviours to suit various shopper types on different occasions.   The balance of power has shifted from retailers and manufacturers to the shopper.  Knowing the shopper attitudes driving behaviours is key to unlocking loyalty and acquisition.

“We all know that what shoppers say and what they do can vary significantly. This is why it is very important to understand your brand’s competitive advantage and key vulnerabilities through uncovering the product attributes that are most important to shoppers, especially at a time when shoppers are facing increased financial pressure and reevaluating what is important to them when making purchases across particular categories.  Investment in valuable data is not a cost, but a powerful solution to deliver ROI.”

Pandemic innovations and cost of living battle alters Australian shopping trends

Circana’s Shifting Shopping Behaviours report concludes that the COVID-19 pandemic initiated many pandemic innovations that drove many brick and mortar shops to diversify their business model to include or improve their e-commerce channels. In a post-COVID world where inflation is skyrocketing, Australian consumers are in sync with global trends towards prioritising affordability when purchasing products for themselves and their families.

This can come at a cost to companies because values such as brand loyalty are now being compromised in favour of value for money, with many consumers comparing prices and choosing more affordable options.

Sustainability continues to be a value that many consumers hold dear to their hearts, however, in the light of the soaring cost of living, consumer values are faltering as they are faced with making a choice between a more affordable product versus a more expensive but environmentally friendly product. While Millennials and Gen Z consumers continue to place emphasis on sustainability as a deciding factor in their purchases, older Boomers and Gen X consumers are still forming the majority of the world’s population in buying power and their decisions are based more heavily on affordability.

Leathwood:  Circana’s Shifting Shopping Behaviours report highlights some crucial issues for businesses across the FMCG sector that require careful and insightful navigation.   It is imperative that as a sector, brands and retailers pay close attention to consumer behaviour, by accessing consumer data and surveys to better understand the rapidly changing consumer patterns during this period of high inflation where the increase in wages lags behind.

“We also recommend that businesses ensure they consider investment into the shopper omni-channel experience because shoppers are increasingly aware and capable of using different platforms to compare prices and scout around for deals and discounts before making their purchases.”

About Circana:

Circana is the leading advisor on the complexity of consumer behavior. Through unparalleled technology, advanced analytics, cross-industry data, and deep expertise, we provide clarity that helps almost 7,000 of the world’s leading brands and retailers take action and unlock business growth. We understand more about the complete consumer, the complete store, and the complete wallet so our clients can go beyond the data to apply insights, ignite innovation, meet consumer demand, and outpace the competition. www.circana.com

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