Guest Article | Nichola Quail - CEO, Insights Exchange
Nichola Quail is a wonderful friend to RX and we have been delighted to work alongside her on many occasions. Her team have uncovered the most exceptional insights to help retailers, around the world, understand the opportunities that lay often in plain view. At the time of writing, Nichola and I were both in Bali attending the SEA iMedia Online Retail Summit. She was sharing some incredible insights to crack the SEA market.
Let’s face it - Kiwis and Aussies have been hit hard lately.
The return of inflation and recession has hit Kiwis very hard with the cost of living for the average household increasing by 7.7 percent in the 12 months to March 2023*. The rising costs of rent, mortgage payments, petrol and fresh fruit and vegetables has put significant pressure on New Zealand and Australian consumers prompting them to seek ways to maximise their financial resources.
On top of that, the average age in NZ in 2023 is around 40yrs, fertility rate is down to 1.6 and we have an aging population (the percentage of those aged +65 increasing rapidly**). These all have implications not only as a society but also for our marketing and targeting strategies.
Today we will reveal 6 social and demographic shifts that are shaping the landscape of NZ and Australian consumer behaviour. The results are from a nationally representative survey of n=1000 Kiwis in October 2022 and over 1500 Australians completed in May 2023 thanks to our panel partner Pureprofile. This was the second wave of the Australian study and whilst some trends have remained the same, there have been some micro changes.
The Lost Generation now found - Welcome Generation Jones
Generation Jones, the demographic aged approximately 55-64 years, is our first shift. This cohort, often overlooked in media targeting, is experiencing significant life changes. A decade ago, they might have been looking forward to retirement, downsizing, or extended holidays. Today, many find themselves still providing support to their adult children and dealing with financial responsibilities. It's essential for media buyers to understand that this demographic has shifted their mindset, thinking, and behavior, resembling more of the 45-year-olds than traditional 55-64-year-olds.
Implications: Let’s empower the dynamic 55-64 age group and connect with the evolving mindset of this demographic, acknowledging their active roles in family support and financial responsibilities. Brands can tailor products/services that cater to their unique needs, combining aspects appealing to both 45-year-olds and traditional 55-64-year-olds. Marketing strategies can emphasize adaptability, resilience, and personal growth, aligning with the demographic's shifting behaviors.
Kidults and their Economic Impact The kids that never leave the nest! We are referring to the kids that are choosing to stay home with Mum and Dad well past their ‘use by date’.
In New Zealand, 29% of 18-24yrs we surveyed are living with their parents, yet only half are full time students. 12% of 25-29yr olds are living with their parents and almost all are working full time.
Nearly half (46%) of parents who have adult children still at home said they are financially supporting or supplementing their income.
So these kidults are not paying a mortgage, living with their parents and working. This situation impacts not only the housing market but also the consumer spending patterns, as kidults are financially supported by their parents, leaving them with disposable income for other pursuits.
Implications: Brands need to recognise the trend of young adults living with parents and being financially supported and their disposable income and lifestyle. Brands could look at promoting experiences and products that align with their discretionary spending patterns, such as entertainment, leisure activities, and technology.
Redefining Homeownership Dreams The high price of housing, including rents, is one of the most important issues facing New Zealanders and Australians today. The dream of becoming a homeowner is out of reach for many Millenials. Sydney (13.3) is now the 2nd least affordable city in the world and Auckland (10.8) is the 7th least affordable^. In New Zealand, the dream is so far out of reach that of those renting now - half (47%) claim they are not likely to buy in the next 5 years. So what are they going to spend their money on instead?
Implications: Brands need to acknowledge the challenges Millennials face in achieving homeownership and their focus on alternative spending choices. They can provide solutions that align with these spending priorities, offering experiences and products that cater to their aspirations and financial realities and tap into the "renter's mindset."
Impact of Inflation
The vast majority of Australians say they have experienced an impact on personal/household expenditure and for one-third it is by ‘a great deal’. Whilst in NZ interest rates are at a 14-year high, tipping the country into a recession in June this year. It is no surprise that consumers are tightening their belt buckles and spending less. Among those surveyed, eating out, retail and personal care are key categories that Australians claim they are spending less on. Categories that have not been as impacted include streaming and domestic travel.
Implications: Brands need to understand the shifts in spending patterns and leverage this by creating offerings that complement these changes, such as staycation packages, virtual experiences, or at-home entertainment options. Emphasise adaptability and resilience in marketing messages, acknowledging the cyclic nature of economic growth and recovery.
Rise of the Gig Economy
The gig economy is not new, but it is increasingly becoming a way for everyday Australians and Kiwis to earn either a primary or secondary income. In the face of rising interest rates, job insecurity and inflation, one in two (46%) working Australians predict they are likely to earn a secondary income in the next 12 months. That’s nearly half of Aussies surveyed!
Implications: What does this mean for businesses and brands taking advantage of this trend? It is about tapping into the entrepreneurial spirit, broadening your B2B targeting as one person might wear two hats and dialling up convenience as people have less ‘free time’ on their hands.
Navigating AI Awareness and Concerns There is no denying that AI, machine learning and the launch of OpenAI’s ChatGPT has permanently changed the internet landscape forever. With 100 million current users since launch in December 2022 and 1.6 billion visits in June, it truly is an overnight sensation.
But for half of Australians, ChatGPT is not even on their radar, let alone Dall-E or Midjourney. In fact one-third haven’t even heard of the phrase ‘Artificial Intelligence’ or AI and 6 in 10 are not currently using AI (or so they think).
Implications: Among those aware of AI, there is definitely concern about its impact on jobs in the future with one in two expecting it will have an impact. Brands should also approach AI-related marketing with the awareness that not all consumers are familiar with the concept.
In today’s dynamic landscape, consumer behaviour is ever evolving. How are these shifts impacting you now and in the next 5 years? Understanding these changes in households and audience behaviour is crucial in developing media buying strategies that resonate and influence.
*Stats NZ Tatauranga Aotearoa July 2023
**Stats NZ Tatauranga Aotearoa July 2023
Nichola Quail is a Global Insights Strategist, Research Specialist and Demography Expert and Founder and Director of Insights Exchange - a global market research company that works with enterprise and fast growth brands to deliver game-changing insights. She has worked with leading local and international brands including Xero, Densu, Bendon, Disney, Panasonic, NZ Post, Briscoes and Rebel Sport.
Book a time to chat to Nichola in her calendar.
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