Australian consumers are cutting back on luxury goods and services, looking for bargains, and switching to cheaper brands as they battle rising inflation.
However, shoppers are still gearing up for a bumper pre-Christmas sales season with almost half feeling confident and one in five planning to outspend last year, according to new research released today by the National Retail Association.
The NRA’s Consumer Sentiment Report, prepared in conjunction with the Retail Doctor Group, found that 71 percent of consumers had changed their spending behaviour because of rising costs, and that purchasing decisions during the upcoming sales events would be driven largely by the discounts and offers available.
Boxing Day remains the most anticipated day in the retail calendar, but Black Friday and Cyber Monday pre-Christmas sales continue to grow in popularity.
NRA Interim CEO Lindsay Carroll said the data showed Australian consumers were prepared to cut back on their day-to-day spending in order to splurge on special events such as Christmas.
“This follows trends we have seen in previous years where interest rates and costs were rising,” Ms. Carroll said.
“People still want to feel special and have those great experiences. But rather than having regular dining experiences or spending that little extra on more expensive groceries or goods, they look for sales and special offers and they save their splurges for special occasions.”
The report also found that:
- Aussies still prefer to do their festive shopping in-store, although online sales continue to grow in popularity
- Free delivery is the key factor in influencing online purchasing, followed by loyalty programs and free returns
- Four in five consumers said a retailer’s treatment of their staff was important to them
- A quarter of shoppers are prepared to pay more for sustainable products, however, Millennials and Zoomers simply expect brands to prioritise sustainability and ethics, and are less willing to pay.
- Bad customer service remains the number one obstacle to customer retention.
Ms. Carroll said the data showed retailers needed to be right at the top of their game in terms of price competitiveness, customer service, and ease of shopping.
“What this means for retailers is that there are still customers out there willing to spend money on the festive season, but more than ever they are looking for bargains, great shopping experiences, and for smooth transactions.
“The challenge for business owners and their staff is greater than ever to have the right products, the best service, and sharp pricing.
“Those who get these factors right can look forward to a very happy Christmas season.”