Consumers are redirecting an average of almost $450 a month, largely towards essential goods and services or savings, and adjusting their shopping behaviours in response to cost of living pressures, a new CommBank consumer survey shows.
The latest CommBank Consumer Insights report is based on a survey of more than 5200 Australian consumers between May and June 2023. The report provides actionable insights for businesses, particularly in retail and hospitality, based on an analysis of consumer attitudes, motivations and expectations of their experiences amidst changes to the real and digital economy.
It shows discerning consumers are making more cautious choices and researching more before they buy, while businesses were encouraged to up their focus on digital technology to enhance purchasing experiences, personalise interactions and boost customer loyalty.
According to the survey, around 27 per cent of Australians have not enough, or just enough, money to meet household expenses. Irrespective of their financial situation, Australian consumers are redirecting $448.40 per month on average to cover the rising cost of living.
The survey also shows there is little difference in the monthly amounts redirected by people living comfortably ($425) and those doing it tough ($471). However, more comfortable Australians are likely to save this amount, whereas those doing it tough tend to cover bills and essentials.
Consumers are spending less on discretionary goods and services, redirecting those savings to everyday food and essentials and household expenses like utility bills, fuel and mortgage repayments.
Australians adopting deal-seeking behaviours
Meanwhile, rising living costs are also prompting behavioural and lifestyle adjustments, with more than nine in 10 Australians adopting deal-seeking behaviours and reviewing their spending choices (90 per cent). This includes using promotional codes, cashback offers and rewards (73 per cent), and spending more time researching before buying (66 per cent). Almost half are only buying from businesses they know and trust (46 per cent).
Commonwealth Bank’s General Manager Business Banking Channels, Marcel Klassen, said rising living costs are having a far-reaching impact on the consumer psyche, and this is changing their expectations of retail and hospitality experiences.
“While some people are under more pressure than others, a value-driven mindset is more pervasive. That’s heightening the demand for retail and hospitality experiences that instil trust, while saving time and money,” Mr Klaassen said.
“But attracting customers and maintaining their loyalty doesn’t always mean discounting. It can be ensuring they are protected against scams, keeping their data safe while not collecting unnecessary personal information.”
“Data security is also essential to trusted interactions where consumers can confidently share personal details and get a more seamless and customised experience in return.”
Data security and control the most important factor for consumers
More than eight in 10 consumers (84 per cent) said retailers and hospitality providers should use technology to enhance the purchasing process and personalise the experience, but amidst concerns about cyber breaches, consumers also expect the personal data that powers these improvements to be secure.
When asked about the must-haves when purchasing from a retail or hospitality business, data security and control ranked as one of the most highest imperatives for consumers, while businesses were urged to be transparent with data collection and sharing (84 per cent) and offer them control to view, update and delete stored data (81 per cent).
Consumers are also alert to the rising incidences of scams and fraud, with 66 per cent unsure which retail and hospitality websites can be trusted. More than 46 per cent also actively avoid online marketplaces directly due to fear of losing money to scammers.