Seventy-eight percent of consumers are prioritising value for money when shopping, as Australians are almost twice as likely to be stressed about higher prices of groceries and essentials than they are about the cost of housing, new research from Shopify has revealed.
The Shopify Australian Retail Report, conducted in partnership with YouGov, unpacks how Australian consumers’ priorities, financial stressors, and purchase behaviours have evolved amidst the current economic conditions. The study of more than 1,000 Australian consumers sheds light on these shifting consumer behaviours and lays out effective pathways to growth for retailers to connect with customers facing economic pressures.
“We’ve seen an onslaught of successive macro-level events impact so much of our lives – from the obvious prioritisation of health post-pandemic, to the fact that millions of Australian homeowners have faced not only their first but their 12th interest rate rise in the past year. It would be remiss to expect consumer priorities and behaviours to remain unchanged from 2019 or before,” said James Johnson, Director of Technology Services & Enterprise, APAC at Shopify. “But what we’re seeing is that while, across the board, Australians share some common priorities and challenges, when you dive deeper into the data you find that there are clusters of customers where these diverge.”
The report revealed six new consumer personas which represent these clusters, grouped by a number of behavioural factors, and analysed each cohort’s financial stressors and outlook, purchase intentions, major life priorities, and shopping expectations.
Six new consumer personas emerge:
- The Value Valuer – they define value as ‘quality that lasts’, and prioritises product quality over brand. Least likely to be influenced by a celebrity or social media, this is the largest group, representing 32% of all consumers surveyed.
- The Loyal Local – they also value quality over brand and price, and are likely to switch brands to support local or more sustainable businesses. The most likely to switch to public transport to save money, this is the second largest group, representing 24% of Australians.
- The Savings Seeker – they are the most stressed consumers overall, and are the most price-sensitive of all groupings. By far the most likely to switch to private label brands, this persona represents some 22% of consumers.
- The Mindful Moneybags – the wealthiest and most environmentally conscious cohort, these shoppers have not felt enough of an impact to change their shopping habits and up 10% of Australian consumers
- The Picky Purchaser – the second highest-earning shoppers, this cohort has the highest expectations when it comes to the shopping experience. They are the most brand-loyal by a considerable margin, and comprise 8% of Australians
- The Social Shopper – the most likely to shop online and the most influenced by influencers, this cohort is named after its members’ penchant for digital interaction. They prioritise speed in the purchase experience, but are the least demanding overall and make up just 3% of consumers.
All personas listed above said the main expense they were cutting back on was dining out, apart from The Mindful Moneybags, whose primary cost-cutting measure was postponing holidays.
In addition, the majority (57%) of Australian consumers are optimistic about their personal situations but there is a split on the economy as a whole, with 48% optimistic and 45% pessimistic. Mindful Moneybags were the most likely to be optimistic about their personal situations (74%), while Picky Purchasers were most optimistic about the economy (76%). On the flipside, Savings Seekers were most pessimistic about their personal situations (49%) and the economy at large (58%).
“Customers are being a little more reserved with their spending, and not as impulsive as they were in previous years. But while people are willing to change brands for cheaper items, many aren’t prepared to sacrifice customer experience,” said James Reu, ecommerce manager at LSKD. “For us that means doubling down in our relationship and community building, and making them feel like they’re part of something bigger. It’s about making sure we’re making the customer feel heard and creating a memorable experience.”