A “rapidly growing” group of ‘newly constrained’ consumers have been identified in a recent study.
According to the NielsenIQ Unlocking Consumption global survey, these newly constrained consumers are those who experienced worsening income or financial situations and hence consciously watch what they spend.
Almost half (46%) of the global respondents expressed they were newly constrained. On the other hand, “only” a third of the Australian consumers (33%) surveyed felt the same.
Still, says NielsenIQ, Australian consumers are not entirely immune, and they have been actively finding ways to tackle the uncertainty brought on by Covid-19.
How the study worked
The study, conducted across 16 countries by NielsenIQ’s Customised Intelligence team, aims to reveal how consumers have been impacted by the pandemic and how their spending behaviours have changed. The study found that the change in consumer circumstances has led to greater scrutiny around how consumers will plan their spend.
In 2020, NielsenIQ identified a “polarising impact” from Covid-19 and two distinct consumer groups. The two groups were defined as ‘constrained’ for those who faced job losses and ‘insulated’ for those who held their jobs and felt secure in general.
NielsenIQ, however, notes that the study conducted in December 2020 found that consumers’ circumstances and intentions relative to spending had changed so significantly that further segmentation is required. The initial two segments have been expanded to four segments: existing constrained, newly constrained, cautious insulated and unrestricted insulated.
Australians less impacted
As the pandemic effects continue, NielsenIQ says many global consumers may face further income reduction and shrinking governmental support. 33% of the global consumers surveyed said they feel less secure about their income prospects over the next three to six months.
Relatively speaking, Australian consumers were said to be less negative towards the future as “only” 22% of respondents showed insecurity about their income prospects in the first half of the year.
Additionally, developed markets like Australia had a “correspondingly higher” proportion of total consumers who indicated they have had little to no impact on finances as a result of Covid-19.
Adjustments in spending
When asked if purchasing behaviour has changed since the onset of Covid-19, 56% of the Australian consumers surveyed indicated they have changed the way they buy categories and brands.
Despite Australian consumers being less impacted by Covid-19, NielsenIQ says they are still finding ways to save on their household spend. This includes buying whatever product is on promotion regardless of brand (49%), choosing the lowest priced products irrespective of brand (48%) and opting for private label/store brands (45%).