JCDecaux New Zealand has released the results of its latest IRIS audience research, which reveals consumers are scrutinising FMCG spend as the cost of living rises and household budgets are put under pressure.
Victoria Parsons, Senior Strategy and Insights Manager JCDecaux New Zealand said: “‘Our Shopping List Status’ research found that New Zealanders are tightening the purse strings, with 91 per cent noticing household budgets being stretched and a quarter of respondents reporting that they are actively cutting back.
For New Zealanders noting reduced disposable incomes, grocery shopping is an easy place to make cuts. Shoppers are increasingly paying close attention to what goes onto lists and intro trolleys. It is interesting to understand consumer perceptions as to what is a necessity and what is a luxury; we see consumers justifying brand purchases as necessary for quite personal reasons.
“Out-of-Home can be a powerful platform to impact and influence in-store and online shoppers throughout the day while they are mentally planning their shopping lists. 83 per cent of survey participants agree that brands that advertise on Large Format are quality brands, which is key for consumers to overcome price sensitivity and avoid replacement by home brands.”
Brands deemed an everyday luxury such as are most at risk to spending cuts with the research showing:
- 58 per cent of respondents are planning to stop buying everyday luxury items
- 47 per cent of respondents plan to adopt more home brands
- 40 per cent of respondents will only buy trusted brands
- 77 per cent of respondents claim price is the main consideration when choosing between similar products.
Gary Rosewarne, Sales Director JCDecaux New Zealand says, “What consumers deem an everyday luxury is interesting. Respondents told us items such as coffee and tea, bread, self-care and dairy are non-negotiable in terms of buying favourite or quality brands, whereas for canned and frozen goods, and cleaning products, people are shopping the category based on price. Luxury does not mean premium, it means moments where you expect quality FMCG experiences and won’t trade down – you justify the price premium.
“The research concludes that as inflationary pressures increase – due to growing interest rates and higher prices on most things we consume – brands should be focusing on protecting purchase intent and quality perceptions. Brands can get ahead of changes to consumer spending by communicating product benefits through Out-of-Home advertising, giving consumers confidence to continue buying quality brands.”
The research also reveals that the emotion or promise of brands can overcome price sensitivity. Consumers seek validation to define which brands remain as necessities on shopping lists. Brands without meaningful quality cues or unique brand benefits may be swapped out for cheaper alternatives.
According to the research results, the traditional notion of the household shopper no longer applies. Nearly all New Zealanders are household shoppers, whether all the time or occasionally. Women still form the majority of main shoppers, while men have increasing influence, with 43 per cent identifying as the main shopper.