‘Nothing will ever be the same again’
The downturn will change Australian consumers so completely that brands’ relationships with them will never go back to how they were, a gathering of marketers was told today.
Unveiling a chilling survey of the latest public attitudes, Peter Harris, MD of research house Colmar Brunton, told an Australian Marketing Institute audience in Sydney that Australia will be profoundly changed by the coming months. He said:
“A new consumer revolution is taking place right now. The Australian consumer who you have been working with for the last 20 years will be a completely different animal to the one that existed six months ago, that you’ve been used to dealing with for the last 20 years. There is no going back.”
Even compared to last October, sentiment has gone into “freefall”, with no sign yet of it plateauing, he warned.
Harris, who is also president of the Australian Market and Social Research Society, said the findings – based on a survey carried out in late January – included:
- 95% of those surveyed said they are worried by the current situation. The biggest shift has come in 18 to 24-year-olds, who went up from 85% to 95% since October.
- One in seven people said they were worried about losing their job. This was up by 70% on October.
He said: ‘There is no question about it. We are still in freefall. In terms of consumer confidence we are not levelling out. People are becoming more concerned about their jobs.”
- 45% of people said they were less secure in their jobs. 24% of self-employed households have already experienced a drop in income. He said: “The key metric here is just how people are concerned about losing their jobs.”
- 43% of over 50s have put off plans to retire; 37% of people are already working longer hours and 20% have taken on second jobs. He said: “Something major is happening here.”
Regarding last year’s $10bn stimulus package, he said that only 57% of households had spent it, with the rest saving it. He said: “They used it to reduce their debt or put it against their mortgage. People have started saving for a rainy day.”
This included: 79% of households have already cut back expenditure; 58% have reduced treats such as going to restaurants; 53% are buying less luxury goods than they were; 39% have put off plans for overseas holidays; 38% have done the same for domestic holidays.
He said: “People are changing the way they shop; they are asking far more questions about value, that you as marketers will need to answer.”
And 41% said they had delayed purchasing high price items, including 24% saying they had put off a planned purchase of a car.
The public has started putting their cash under the mattress, with 38% paying off more on their mortgages, 32% paying off their credit cards, 30% saving more and 12% paying off car loans more quickly.
He added that 29% said they were less likely to buy shares now; 23% said they were less likely to buy investment properties; and 23% said they were less likely to do renovations.
He warned: “Brands will have to be very careful to get the tone right in their advertising. Brands that are out of synch will be out of favour.”
He added: “The era of fair go is coming back.”
He also predicted a move to “cocooning” where people retreat to their homes and families and seek a simpler lifestyle. He said: Expect frugal, not frivolous.”
He said that all of this sentiment was despite the fact that rate cuts and the drop in the price of oil means that many Australians are better off than ever. He said: “It’s not about rational behaviour right now.”
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25,000 to 36,000 advertising/marketing jobs supposedly lost in the USA so far and counting.
Agreed, the business will not be the same again.
(Except perhaps for Campaign Brief magazine)
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I agree that the economy plays a huge role in shaping the future, and some spine chilling stats… but never be the same again? Big call!
Look at what we achieved and destroyed in the last 100 years. Forever is a long time.
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Perhaps the headline should read:
“Australians behaving the way they always have in times of economic unrest. Nothing new to report really.”
Visit http://www.stocktradingtogo.co.....#post13866 and you’ll see the world has had 30 recessions in the past 245 years (average: one every 8 years).
I wish people wouldn’t scare the youngsters by saying this is the end of the world! It’s simply not. It’s just an overdue recession.
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Come on! A good article, however the more we spread this cancerous fear factor the more it has people withdrawing into their burrows. Australia does not need to join the ranks of America and Europe.
Lets look at some facts here. Since 1902 there have been 21 recessions, the longest in 1929 to 1933 of 43 months. Since then our longest has been 18 months in 1973 and 1981, and since 1902 we it has averaged out to 14.4 months.
The US has been technically in recession for 14 months already. Lets say for the sake of pessimism the U.S is going to go into recession for 22 months then, we are going to see a recovery in October of this year.
As for Australia and Asia the pundits believe we will come out of it before the US. This gives brand owners time to re-position their overall proposition. In fact it has acted as a cleanser bringing us back to down to earth. Perhaps now the word VALUE VALUE on all levels is the strategy us brand owners should be looking at if we hope to create sticky customers and gain back our market share with interest.
By the way regarding ‘nothing ever stays the same’ Nothing is meant to stay the same whether it be good or bad. How we react to change will determine our own outcomes. I say be the change and take control.
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Does being a brand surgeon mean that there’s lots of dead & dying stuff out there that you’ll be taking a chainsaw to Paul? I’m more scared of needles than I am of the economy “changing forever”. Change, like recessions, is normal & should be embraced rather than feared. Maybe we should blame the previous federal government for fostering an irrational climate of all pervasive & paranoid fear. Anyway it’s a beautiful day & I’m off to the beach…oops! Did someone just say “Shark”?
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Value strategies on brands?
Value is important, but don’t forget quality – I don’t anticipate sales 1-ply toilet roll nursing consumer confidence thru the coming months.
Regardless of economic hardship, brands need to maintain their relevance, reliability / trust, and offer a point of difference, to get into consumer baskets.
In a climate like this, I want a brand which offers all this and is also a “friend”. I’m not sure how many friends our banks have, slugging consumers with a new round of fees – this does not seem to offer good value.
As for Value, today it might take a more intrinsic meaning with people valuing what they do have vs. what they want to have. It might chill us all out a bit, no bad thing.
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what magic cloud are we living on that makes one say we are different and better than the US and Europe.. or maybe we are on different planet..surely it is clear to all by now that the oppinios of advertisers brand surgeons, business people and politicians matters little. Several trillion dollars have done nothing to halt the downturn. Nothing will improve until consumer sentiment changes and that will not change until they adjust to the increased risks they currenlty face. Australian sentiment is no better than in most other western countries
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