Consumer behaviors change after the cost of living rise bites
As the global supply chain, energy supply and food availability, have been rocked by both the two-and-a-half-year pandemic as well as Russia’s illegal invasion of Ukraine; the cost of living increase is biting many economies around the world. While some governments have announced measures to ease the issue with grants and windfall taxes; consumers, as always, are accounting for enhanced daily affordability based on their own spending habits and household needs.
To get a measure of consumer behaviour changes as well as how companies like Netflix are finding this to be a strong predictor of their revenue downturn, it’s essential to look at the spending habits and saving motivations being employed. As has been seen with NBN plans, essential and cost-effective utilities are still on the upswing, as consumers attend to their long-term planning with care.
Price cut services
As a means of enhancing competitiveness, many grocery chains have taken it upon themselves to announce several price cuts. Consumer demands for off-brand products and competent alternatives are making a tremendous difference in how certain brands have started pricing their goods, while coupon deals, wastage donation services, food banks and more are receiving increased patronage. Initiatives in local environments and markets are being met with community support. UK supermarket chains are leading the charge.
Online ordering has become a norm, but with the gig economy causing unstable unemployment and the ethical duty passed on to consumers to tip, more and more are starting to opt for in-person purchases without the excess surcharges of home deliveries. Online ordering became a mainstay during the pandemic, but now deals are situated in-house where logistics costs need not be factored into the price. This makes a tremendous difference for larger brands that have been scaling back their retail presence.
Bulk purchases are becoming more common, with an estimated 67% of households now waiting for price slashes or to spend more but with less frequency at various wholesale chains. As such, promotional spending has lessened, as has the chance for companies to upsell their customers on various promotions and other combi deals. This ultimately means that these deals need to appeal more and become more present even for those under strict budgeting habits – which many brands are starting to pursue.
Rebates & household credits
Some governments are providing grants, some to pay back, some not, such as the UK government’s recent £400 allowance for households towards their energy bills, or £650 for struggling households as appropriate. It can also be worthwhile to consider which rebates you are able to apply for based on your location, property type, or managed approach. Landlords may be able to apply for further support especially in HMO buildings. This is an evolving approach, and as governments are being petitioned to help ease the cost of living, interest rate changes, rebates and more are to be expected.
As global effects cause international markets and financial standards to shift, we can expect further changes in consumer behaviours. In our personal and professional lives, this is essential to keep on top of.