The Cost of Living Crisis: What Australians want from brands

With Cost of Living dominating the news agenda and an issue that is top of mind for all Australian consumers, politicians, business leaders and owners alike, M&C Saatchi Group has today released the third wave of the ‘Cost of Living Crisis and what Australians want from brands’ research report, with key findings painting a concerning picture.

As Australians struggle to maintain house and home it has become apparent that in today’s climate core themes pertaining to brand loyalty, sustainability ambition and homegrown values are areas being hit the hardest thanks to the daily financial challenges being faced.

“After 2 years of increased prices across most categories and 13 interest rate adjustments, Australians are experiencing more uncertainty than before. Consequently, we have observed a more uncertain and pessimistic customer outlook” said Melinda Lofts, M&C Saatchi Group Head of CX.

Melinda continued “As a result we are seeing customers sacrifice their values by buying fewer sustainable products, trading down and purchasing fewer Australian brands.”

A direct and significant result of the surge in cost of living identifies that Australians are being forced to abandon their loyalty to homegrown and being forced to purchase non Australian brands, with 49% purchasing less Australian products or brands across all age groups.

This trend doesn’t just affect Australian owned brands, the negative impact carries over to any brand loyalty with 71% of all respondents admitting to being less loyal to the brands they would normally use, with the 50-89 age group leading the charge with 80% affirming the behavioural shift.

In an era where consumer brand loyalty is being shaken to its core due to the cost of living crisis, brands need to step up and focus on their loyalty to their customers, a sentiment affirmed by Melinda Lofts: “To stay in a customer's consideration phase, brands need to adapt to new customer behaviours - less sporadic spending and more intentional, conscious consumption.”

With the rise of the intentional shopper, the days of disposable income feel further away than ever before with consumers leaning towards bulk buying wherever the price is right. With a focus on 6 key spending trends, the report indicates that today's customers are:

• More open to substitution - 85% of customers are more likely to be open to trying new brands or products, whether that be new retailers or buying cheaper substitute brands
• Using loyalty programs more - 81% of Australians are using loyalty programs more to receive discounts and savings.
• Squeezing the last drop - 89% Australians are making products last longer.
• Hunting for deals - 80% of consumers are spending more time researching products and seeking discounts.
• Visiting multiple shops - 68% are visiting multiple shops to complete their shop.
• Buying more online - 47% are purchasing more online to save money.

Further, and distressingly, this latest iteration of the report has also uncovered a pronounced increase in negative emotion which signifies a substantial shift in the collective mood of the nation. Concern continues for the younger generations where feelings of worry, anxiety and fear are more prevalent than more mature age groups.

Higher percentages of Gen Z and Millennials report the feelings of being ‘Depressed’ or 'Distressed’, suggesting that younger generations are now facing more stress in relation to their financial state of affairs.

In a positive shift however, there are steps all brands should consider taking in order to help customers through the cost of living crisis such and work towards collectively shifting the direction of these trends, such as:

• More tangible value for customers
• Prioritise your loyal customers
• Help provide customers with tools to aid planning their shops
• Invest in customer service
• Prioritise brand reputation and building
• Not creating a one size fits all solution

For more detail download the full ‘Cost of Living Crisis and what Australians want from brands’ report here.

Read more thought leadership from M&C Saatchi Group here.