There is no getting around today’s problems. The business sector is in turmoil as a result of rising inflation, supply chain problems, and the lingering epidemic.
And it’s all too simple to blame poor business performance on the current economic climate. Excuses, on the other hand, almost never (if ever) result in beneficial outcomes.
GfK’s Head of Consumer Intelligence and Consulting ANZ, Mitesh Khatri, revealed the company’s latest insights into Australian consumer behaviour.
Consumer disrupted: What brands need to know
Values are more than the words up on an organisation’s wall. They’re deep, personal human truths. And these truths should form the guiding principles of every marketing and sales strategy. They can also be the real point of difference in your business. In fact, 62 per cent of consumers say they only buy products and services that appeal to their beliefs, values or ideals.
The study also discovered that Australia’s key values diverge from those of the rest of the globe. The most important values for Australians are honesty, family protection, authenticity, independence, and enjoyment of life.
When compared to the globe against five segments (Discoverers, Indulgers, Elementals, Mindfuls and Aspirers), Australians land mostly in the Discoverers, Indulgers and Elementals categories.
“Our research supports the fact that Australians are different. So when we look at global consumers and get global data, it doesn’t necessarily work in this market. Australian consumers love their freedom. They’re pleasure seekers. Material security is important to them. They want to enjoy life. Health and fitness are very important to them. These personal values drive their thinking. And marketers can tap into that opportunity to find better ways to connect with the Australian consumer,” Mitesh explained.
“Brands tend to do well at understanding category predispositions based on consumer needs, attitudes and predispositions of choice. Taking into account these values help marketers understand nuances beyond demographics, geographies, attitudes and needs. And they drive messaging, innovation and brand positioning by enabling marketers to connect with the consumer on a deeper level beyond the surface of what consumers say.”
The opportunity of home
Home has always been the HQ (headquarters) of our lives, but increasingly, we’re spending even more time at home. According to GfK research, 71 per cent of consumers cook at home for fun, 70 per cent work or study from home, and 45 per cent enjoy gardening at home. Others perform home maintenance and repairs (37 per cent), and approximately a quarter (27 per cent) entertain guests in the home.
Interestingly, GfK’s research also finds that Australians spend more time at home than in any other country worldwide. Roughly 40 per cent of us are working remotely. It reflects our labour force, which is largely professional and financial services.
Hybrid environments are driving increases in our lives at home, particularly around strong premiumisation and indulgence. For example, more and more people are choosing to cook at home or order from a food delivery service instead of dining out.
In this “new world”, GfK research shows that 44 per cent of consumers say it is important to indulge or pamper themself regularly. This sentiment has led to increased purchases across the home in areas like entertainment, health, work, study, cleaning and dining. For example, there’s been a 57 per cent increase in juicer purchases, 184 per cent air fryer purchases and a 2,680 per cent increase in Smartphones 5G purchases.
We’re looking for convenience, and we’re buying into technology and appliances at home. And it’s not just products. Subscription video on demand also significantly increases as we spend more time at home. At the same time, radio streaming has seen more than a 122 per cent increase.
For brands, GfK research reveals that consumers want to be educated and inspired in-store for higher-spend items like food processors, dishwashers, ovens and fridges. However, when it comes to smartphones, laptops and fitness wearables, consumers generally go into the store knowing exactly what brand/model they want. The opportunity is to upsell them on accessories like cases and extended warranties.
“Marketers can capitalise on category premiumisation — a trend that is driving strong sales value growth. It’s time to invest in the right marketing touchpoints, pre-store versus in-store, with core messages of value versus trade-up,” Mitesh added.
From data to decisions
In organisations across Australia, data accessibility is a major issue. According to GfK research, only 1 in 4 marketers are very confident in the data systems they use to win and retain customers. Even more, whilst 85 per cent of marketers say direct access to customer data is critical to gain a competitive advantage, only 9 per cent of marketers say customer data is highly accessible.
So what’s holding them back? Three things. The budget to improve martech, systems and processes that connect data silos, and talent to move from data collection to action. The research shows that gathering actionable insights is slow once marketers have data. Only 18 per cent of marketers say they can move quickly from data gathering to actionable insights.
“This begs the question, then, what are those 1 in 4 marketers who are confident in their data systems doing differently? They’re creating a holistic strategy, taking them from macro trends to micro-targeting to niche insights,” Mitesh said.
According to the research, high-performing organisations:
- Change their mindset on data and what it can do for their business
- Create an almost frictionless system to access data
- Access real-time information as the pace of the world requires it
- Hire the right people and invest in the best tools to create effective engagement plans
“Data can be a bit of a dirty word. But if you change your mindset on data, you get it in the right place, get support from the top and get the right systems, processes and talent in place; it can be a real game-changer in your business,” Mitesh explained.
Five questions to ask to power your retail marketing strategy in 2023:
- Present: Against unfavourable macroeconomic trends, where are the growth opportunities?
- Future: How do we plan for the future?
- Where: Where should we target and advertise?
- Who: Who should we be targeting, and how to reach them?
- How: With so many different data sources, how do we form them into one coherent piece?
Finding opportunities, not excuses
“In this new world, consumer behaviours are different. Find an opportunity to understand and use values as foundations for your brand strategy to pull apart your industry or category landscape. And when mountains of data leave you feeling overwhelmed, create a roadmap for improvement that balances human intuition with data intellect to drive better business outcomes,” Mitesh concluded.