Outline: Consumer Lifestyles in Australia
Current Top Five Consumer Trends
Australian consumers are increasing their savings and spending less.
-“Aussies are putting their hard-earned money into banks or investing in homes because of a ―change in households‘ attitudes towards debt and financial vulnerability.”
-“50% of Australians said they planned to spend less on discretionary items and over 90% said that they would still save more money and were not going to change that habit.”
-“Consumers might be spending more on healthcare or insurance or education and might be spending less in shops, but for what it‘s worth, the figures are certainly suggestive of a defensive consumer. It‘s a sign that consumers are still quite cautious with their spending so they’re using the [interest] rate cuts to pay off their loans at a faster rate and not spending more in shops”.
Busy Australians are increasingly taking shorter holidays.
-“Consumers are choosing exotic sites to spend what time they have, including destinations overseas.”
-“ There are numerous places overseas that can be reached within seven hours or less, depending on which part of Australia flights originate.” (Guam, Japan, Johannesburg)
Internet retailing is surging amongst Australian shoppers
-“ Tech-savvy Australian shoppers are becoming more comfortable shopping online and business is booming with shoppers spending A$4.6 billion in 2012, up from A$4.2 billion in 2011 and up significantly from A$2.9 billion in 2008.”
“Among the reasons for the surge in online shopping are increasingly levels of dissatisfaction amongst consumers with the physical shopping experience… As well, many Australian shoppers are visiting foreign websites to pick up items not yet available in Australian stores.”
Many Australians are unsure if they will be able to afford a comfortable standard of living upon retirement and feel unprepared. This was contributed to by the general preference for short term saving, underestimation of the cost requirements later in life, and inadequate planning.
-“Many consumers, according to the survey, are interested only in short-term savings, which they sooner rather than later spend on holidays and other big-ticket items.”
– “Importantly, 53% of Australians will prioritize saving for short-term goals, like a holiday, over retirement—the second highest proportion amongst all countries surveyed (only the UK was higher).”
The cost of raising children is increasing and affecting consumers’ spending and savings habits.
-“’…high-income families [are] spending much more on their children than low-income families.’ Regardless, low-income families devote a greater proportion of their income to children as they get older.”
Consumer Segmentation
Babies and infants
-“Babies born in the last two years are… the so-called Generation Alpha.” Birth rates are slowing down.
-“Babies born today are likely to spend more time in childcare as their parents find they must work more to provide them with every possible comfort. Aussie babies see their day-time carers… more than their parents.”
Consumer demand for kiddie couture is growing
-“It’s the freedom to express their individuality that ranks high on the agenda for mothers when kitting out their infants.”
Parents are creating an increasing demand for five star baby food
-“However, as time gets tighter for adults… parents find it much easier to stop at the market and pick up expensive prepared baby food.”
Kids
-“Aussie kids start school when they are four to five years-old and most states require children to be enrolled at school by the age of six years-old.”
-“A recent article in the Sydney Morning Herald observed that Australian children are among the most ”cosseted” and ”chauffeured” in the world, citing a study that revealed that more than 60% of kids are driven to and from school. The survey, co-sponsored by the Cycling Promotion Fund, found that safety concerns were the chief reasons parents would not allow their children to ride bikes to school.”
-“More boys participated in sport than girls, with two-thirds of boys (66%) involved in at least one organized sport compared with just over one-half (54%) of girls. The survey also revealed high participation in cultural activities, such as singing, dancing, drama and arts and crafts. The most popular cultural activity amongst girls was dancing with 27 % participating. Amongst boys, the most popular cultural activity (16%) was playing a musical instrument.”
Australian kids have become very comfortable with digital technology
-“A recent survey conducted by ABS reports that a staggering 70% of parents allow their toddlers and young kids to use their iPads. The same survey revealed that parents downloaded an average of eight apps designed specifically precisely for kids.”
They are drinking an “alarming” volume of soft drinks.
-“A recent study by researchers at the University of Sydney published in the journal Preventive Medicine revealed that 24% of children in Australia drank an alarming‖five or more cups of soft drinks weekly.”
Tweenagers
-“According to Kidspot Australia, the main back-to-school items for tweens are back packs, lunchboxes, bag tags and stationery supplies.”
-“Most tweens in Australia are given pocket money by their parents for their leisure and recreational activities. According to a survey by the Commonwealth Bank Australia, pocket money is worth A$1.4 billion each year.”
-“Australian children are prolific internet users, according to a new study AU Kids Online, with four out of five children aged between nine and 12 accessing the internet.”
-“A survey of 1,000 Australian parents with children aged seven to 12 years-old found fear of strangers and worries about injuries resulted in them keeping their kids from going out alone. The survey, commissioned by power tool company STIHL, also revealed that, compared with their parents’ generation, kids today have better outdoor facilities and open spaces; they just aren’t allowed to use them as much.”
Australian tweens are getting older sooner and becoming increasingly concerned about their appearance.
-“An article in The Times noted that, according to the results of a recent survey, Australian tweens today have lost four years of their childhood. ―Childhood now ends at 12, four years earlier than a generation ago, according to a survey of mothers with tweenagers‘ who say the pressure on young people to grow up fast, largely coming from their peers, the internet and TV, means innocence is lost far sooner…”
More tweens are using mobile phones.
-“New research by the Australian Communications and Media Authority revealed that 35% of children aged eight to 11 years-old own mobile phones, a figure which has almost doubled since 2007. Tweens spend an enormous amount of their time on their mobile devices, communicating with friends and downloading games, music and apps.”
Teens
-“According to Tru Study, young consumers have become a formidable spending force in their own right, shelling out on average A$96 a week. The main items purchased include clothing, transport, mobile phones, consumer electronics and fast food.”
-“Tru Study also revealed that three in four teens own MP3 players compared with one-half who have wristwatches and less than one-half who have bicycles. Apple, Coca-Cola, Nike, McDonald’s and adidas are teens‘ favourite brands. Boys with a love of expensive tech toys and video games had bigger budgets than girls, outlaying an average A$54 a week more than girls.”
-“A recent survey of Canberra teenagers aged between 12 and 18 years-old revealed that, when typical after-school activities are ranked, playing computer games comes in at 10th place while using Facebook ranks 9th. Activities that occurred with greater frequency were spending time with family, doing homework, watching TV, doing odd jobs, hobbies, sport and reading.”
-“According to the results of Mission Australia‘s National Youth Survey 2012, 40% of teens are employed in part-time jobs and less than 1% are in full-time jobs, not surprising considering most teens are also in full-time education. Thirty-four percent of respondents said they were looking for work and 26.4% said they were not looking for work.”
Australian teens are becoming increasingly worried about their studies and future finances.
-“’The increase in concern about performance at school is greatest among 15 to 19-year-olds with 41.8 per cent listing it as their top concern, up from 28.7 per cent last year.”
-“(With) gloomy economic forecasts, high youth unemployment and escalating pressures to perform in school, it’s no wonder we’ve seen such a large increase in worry about stress and school’”
Young Adults
-“The director of ABS Demography, Bjorn Jarvis, confirmed the increase in Australia‘s overall population growth rate is being driven by net overseas migration, particularly in this cohort.”
-“High tuition fees dictate that many students attend local universities while living at home rather than in student housing, reducing financial pressures. While university students tend to have less spending money than their working counterparts, they nevertheless seem to find enough to allow them to socialise, spend time going out with fellow students and travel.”
-“More than three in five Young Adults use social media sites, with almost one-half of users logging on daily. Smartphones are now the most popular way to access social networks.”
-“During the week, evenings after work or study are often spent catching up with a friend at a café or taking a spin class. The weekends are left for more serious socialising, including visiting bar and clubs and shopping.”
Some young adults are struggling to get their careers started.
-“…the number if Australians in their twenties who are either not working or not in education or training programmes has remained stubbornly high.
-“’…Many employers sack the newest hires first, so a recession raises youth joblessness disproportionately’. At the same time, many employers are finding that for a number of reasons, including lower education levels, a good number of young people simply do not have the skills employers are looking for.”
Middle Youth
-“As they tend to be working and be more established in their careers, members of this cohort typically have more discretionary income than their younger counterparts. On the other hand, as many are in the midst of raising families and supporting households, how that income is spent varies.”
-“Women in this cohort are often called the ‘sandwich generation‘ as many may be taking care of their elderly parents while still looking after their own children. While drinks with girlfriends or book clubs can help give these women back a bit of ‘me‘ time, the latest trend has been to take up sport, such as netball, football, volleyball or basketball.”
Many middle youth consumers are establishing households but are finding it difficult.
-Income is being spent primarily on excellent childcare, the cost of raising kids in Australia having increased dramatically in recent years. This makes it difficult to invest money into buying property despite current low mortgage rates.
Mid-lifers
-“Although they are usually in their peak earning years, Mid-Lifers tend to be fairly conservative in their spending habits as they approach retirement, buying necessities and often staying away from nonessentials.”
Many mid-lifers approaching the retirement age believe that they’ll have to work longer before they can comfortably retire.
-“…fewer than one-half of Australian workers approaching retirement say they will have the savings required to retire comfortably. At the same time, one-third said they expect to work after they reach of 65 years-old.”
-“Increasingly, people will continue in some form of employment, either working part time, doing consultancy work or starting up a business.”
Mid-lifers are going digital to maintain their health.
“So-called ‘appscriptions‘ are digital applications and services that help consumers maintain and improve their health. There has been a substantial rise in DIY health apps, and consumers, particularly older Mid-Life consumers..”
Late-lifers
-“On the whole, Late-Lifers are wealthier than previous generations of retirees. A study conducted by NATSEM revealed that the average wealth of older Australians almost doubled due to the high rate of home ownership among this group and the strong growth in share prices and in the value of superannuation.”
-“On the other hand, retirees in Australia are facing a range of rising costs, resulting in a first-ever increase in the amount they need to live a ‘comfortable’‖ lifestyle.”
-“Retirees branded as ‘comfortable‘ can afford a broad range of hobbies, international holidays, private health insurance and a reasonable car.”
Retirees are increasingly worried about their personal finances.
A growing number of late-lifers are facing burdensome out-of-pocket healthcare costs.
-“’It is clear that for sicker older Australians, even with the protection of Medicare, the costs are significant and many are suffering a substantial financial burden…As a result, a sizeable minority of Australians are under severe financial stress which leads to people reducing their use of medical services hence overall poorer health.’”
Housing and Households
Home Ownership
In today’s housing market, many consumers find it cheaper to rent than buy.
-“’For their busy blended family – six children aged between 12 and 18 – it makes more sense to rent than to buy in uncertain economic times…Mr Gilbert said being a tenant was more affordable, more flexible, and more financially savvy than taking on a large mortgage…”
Older children remain at home and get on the property ladder later.
-“In 2012, one-quarter of Australians aged 20 to 34 years-old continued to reside in the home of their parents. More boys stay at home than girls.”
Household Profiles
-“In 2012, 41% of Australian households contained children, either couples with children (2.6 million) or single parents (884,000).”
-“Also growing at a fast rate between 2005 and 2012 were single households, which grew from 1.7 million in 2005 to 1.9 million in 2012. This growth reflected the desire of many young Australians to postpone marriage and have children later in their lives, the continuing steady divorce rate and the fact that some widows and widowers are living longer.”
Steady divorce rates are driving continuing consumer demand for a variety of post-marriage services.
-“Over the past several years, the divorce rate in Australia has remained steady with sporadic increases, reaching 2.2 per 1,000 inhabitants in 2012. While tragic in both personal and social terms, the act of divorce nevertheless generates demand for a variety range of consumer services…”
Running Costs
-“In recent decades, increases in household wealth, among other factors, have spurred demand for larger homes and more energy services, leading to rising energy consumption per household.”
Australians are increasingly turning towards “clean” energy sources.
-“A report released by the Energy Supply Association of Australia stated that households are now increasingly turning towards renewable energy sources to power their homes. This has caused the electricity market to shrink by A$4 billion in the last four years, a decline of 40% that has generated warnings of long-term effects on the dependability and steadiness of power supplies.”
Money and Savings
Attitudes toward payment Methods
-“Australian consumers are overwhelmingly turning to financial cards to do their personal business, such as purchasing products and paying bills. In 2012, transactions using financial cards of all types totalled A$627.8 billion, compared to A$150.8 million for cash. Cards used in 2012 included debit cards (A$205.5 billion) and credit cards (A$231.8 billion). Increasingly, consumers are turning to debit cards for their transactions, reflected by transaction growth of 99% between 2005 and 2012. In contrast, transaction growth of credit cards over the same period was 33%. Clearly, consumers are using credit cards selectively, in many cases to hold down personal debt.”
Savings
-“A recent survey of consumers by Boston Consulting Group revealed that Australians were among the most worried and the most financially insecure in the developed world. Fifty percent said they intended further cut down in their discretionary spending while saving, saving and saving for coming rainy days.”
-“Many young Australians intending to buy a home save their money in ‘First Home Saver’ accounts into which the government contributes a percentage, i.e., each year the government will make a 17% contribution on the first A$6,000 the account holder deposits each year.”
Loans and Mortgages
-“The recent economic downturn caused many Australian consumers to be more cautious about their money and savings and many sought to pay down their debt and avoid accumulating more. Regardless, after a dip in levels of consumer credit, levels have been rising. Indeed, between 2011 and 2012 alone, the level of consumer credit increased by almost 2% to reach A$269.8 billion. On the other hand, consumers tend to use credit selectively, often for the purchase of big- ticket items, such as refrigerators, cars and washing machines, rather than to finance their daily lifestyles.”
Consumers are increasingly touch and dash using contactless payment points.
-“Australia is considered a hotspot for contactless payment options. Contactless technology allows consumers to make card purchases under A$100 without having to offer signature verification or key in their PIN number and can also be used for purchases over A$100 while using a PIN.”
-“…the mobile payment landscape in Australia may see significant changes as some payment companies work around link-ups with established banks and telecoms companies.”
Eating and Drinking
Eating Habits
-“Contemporary Australian cuisine has been be defined as ‗fusion,‘ combining traditional dishes with foods and tastes introduced by the numerous immigrant groups that have come to the country over the years, in particular immigrants from Asian and Mediterranean countries.”
-“Of course, for decades Australians preferred traditional dishes, mainly variations of those brought over by migrants from Britain. But these eventually underwent a transition.”
-“’Eating out is fairly cheap in Australia, certainly compared to other Western economies, so it’s seen as an affordable way to socialise and relax.’”
Hungry consumers are turning towards food trucks for quick and exotic dishes.
Drinking Habits
-“… consumers are drinking less beer but, on the other hand, there is greater demand for more expensive premium beers. There has also been greater demand for higher quality (and more expensive) craft beers, reflecting the increasing sophistication of consumers‘ beer palates.”
-“Australians love going out to the pub, bar or club to drink and catch up with their mates… given the opportunity most Australians rather go out, drink and socialise rather than stay at home.”
-Wine purchases have also gone up; soft drinks have gone up; water has gone up; fruit and juice drinks are down; coffee is up.
Demand for cider continues to grow.
-“Cider is particularly popular amongst younger consumers. According to research cited by Australian Food News, as consumers get older, especially once they reach the age of 35 years-old, demand for cider tends to decline.”
Grooming and Fashion
Perceptions of Beauty
-“―The report reveals that as a nation, Australians prize a look that is fit, healthy and natural, and that Australian women enjoy their relaxed attitude to beauty.”
-“―Australia‘s young people are more fashion aware, technologically connected and empowered than previous generations. Therefore young women are adopting beauty regimes earlier and being influenced by fashion at an earlier age, not just in the teen years but increasingly the ‘tween‘ years.”
Female Grooming
-“For the most part, Australian women seek to meet the grooming standards of women in other Western countries.”
Supermarkets have become the one-stop shop for grooming products.
-fast and convenient
A growing number of consumers have been turning to overseas internet retailers for beauty products
-“88% of all Australian online spending in the cosmetics and beauty sector goes abroad.”
Male Grooming
-“A significant number of Australian men are increasingly exploring grooming products beyond basic shaving products and toiletries, trying such as moisturising creams that were once nearly only in demand by women consumers. As well, grooming services such as manicures are beginning to attract men.”
Men are increasingly sporting facial hair.
Fashion Trends
-“While winter calls for a lot of layering in order to fight off the bone-chilling winds, when summer arrives it‘s time to shed the warm clothing and hit the beach. Australians love the summer and on hot days, they love nothing more than to don a pair of shorts and a tee-shirt.”
Consumers are infatuated with European fashion.
-“Consumers are drawn by the affordability and European ‘feel‘ of the products on offer.”
Health and Wellness
Attitudes to Health and Well-being
-Not hugely relevant until we’re considering employee healthcare.
Obesity
-“In 2012, nearly 28% of the Australian population 15 years-old and older were obese and 36.4% were overweight.”
-“One of the main reasons for such high levels of obesity in Australia is the sedentary lifestyles of many consumers. A recent survey revealed that the average adult devoted more than four entire weeks sitting in front of the television each year.”
-“The Australian government is increasingly concerned about obesity and has implemented various tactics to help curb the problem. For instance the government did want to impose a fat tax on fast foods but chose to educate consumers instead.”
-“The latest tool that the Australian government is trying to implement is a new five-star food labelling system. The scheme would rate foods from half-star to five stars, based on nutritional value.”
Attitudes towards Smoking
-“Presently, all Australian states and territories have banned smoking in enclosed public places, predominantly workplaces and restaurants.”
Gyms are now offering consumers a customized experience.
Shopping Habits
Main Household Shop
-“Australians usually get paid on the 15th of every month and grocery shopping is the customary ritual that follows.”
-“Due to the pervasiveness of price rollbacks and bulk-buy promotions for branded products, consumers have come to expect considerable discounts.”
Shopping for Big-ticket Items
-“After several years of cautious spending, demand for many big-ticket items is returning to healthy levels. Consumers have also become savvier shoppers.”
Personal Shopping
-“…buying luxury goods is no longer only a privilege for affluent consumers. A growing middle-class with increasing levels of disposable income is also driving significant demand in the luxury market”
Shopping Online
-“ Recent eBay research has revealed that 45% of shoppers who researched products using their mobile phones typically purchased the item online using a computer and 44% purchased the product in a brick-and-mortar store. One in three Australians said that they have shopped online while simultaneously watching a movie, while one in five admitted to buying online while in the bathroom.”
Men are increasingly turning to the internet for their shopping needs.
-“Researchers said that men were more comfortable purchasing more expensive items, such as consumer electronics, online and they were more price-sensitive.”
Australian consumers love loyalty programs.
-“Australian consumers love getting fringe benefits and many are spending more time with retailers that offer loyalty programmes.”
-“Financial rewards still rate the highest, with 80% of respondents rating discounts as vital. Points-based programmes, wherein members can convert points for coupons, products or other rewards, was the second-most popular benefit (77%). Older Australians, in particular, favour retailers who offer loyalty programmes.”
Consumers still welcome catalogues in the digital age.
-“The Annual Catalogue Industry Report 2012/13 revealed that catalogues reach 18.25 million Australians every week… ACA reported that 68% of households that have received and read grocery catalogues made purchases as a result of what they saw in the catalogue.”
Leisure and Recreation
Staying In
-TV, internet, and video games are the predominate sedentary activities. Gardening is also popular.
The couch potato 2.0
-a.k.a. multitasking with laptops, smartphones, tablets, and T.V.
Going Out
-“… nine in ten Australians aged 15 years-old and older had participated in some sort of arts activity, such as watching a live event, going to an exhibition or reading literature. Only 7% said they had not been involved with the arts in the past 12 months. Theatre was attended by 26% with most going to traditional or contemporary theatre (19%) while 10% attended the circus or physical theatre. Meanwhile dance events were attended by 16%, with most going to ballet or classical dance (10%).”
Sport and Fitness
-“ABS found that 7.6 million of Australians (43%) attended a sporting event as a spectator. The six sports attended by the most Australian residents (in the order of their popularity) were: Australian rules football, horse racing, rugby league, motor sports, outdoor soccer and outdoor cricket.”
Vacations
-“…the number of Australian residents travelling internationally on holiday or other reasons has been rising at a rapid pace in recent years. According to the Australian Bureau of Statistics (ABS), in 2012 a record-breaking 8.2 million residents travelled abroad, up from 7.8 million in 2011 and up significantly from 3.5 million in 2002.”
-A strong Australian dollar, more affordable airline fares, and others contribute to why Aussies are taking more trips despite being increasingly savings-conscious.
-“Of those Australian holiday-makers who still preferred a beach holiday, most tended to leave the country rather than visit domestic beach destinations. ―It‘s not surprising that with some of the world‘s best beaches at our doorstep, spoilt Australians are keen for a different kind of travel experience and are choosing to explore destinations steeped in culture and history.”
Public Holidays, Celebrations, and Gift-giving
Stressed Australian executives are increasingly seeking to go on spa holidays.
Getting Around
Private Transport
-“Australia is far from densely populated and it is perhaps not surprising that passenger cars dominate transport options. Indeed, according to Moving to Australia 2010, Australia has the second-highest level of car ownership per capita in the world…”
Public Transport
-“For the most part, because of their love affair with private passenger cars, only a relatively small proportion of Australians rely on public transport to get around. Regardless, many Australians in larger cities do use local public transport due to its availability, convenience and lower cost. For example, Sydney offers travellers a network of train, bus and ferry services. In Victoria, the public transport system consists of train, tram, bus and coach services provided by independent operators administered by Public Transport Victoria. As well, the higher prices for new cars, higher fuel prices and traffic congestion have convinced many urban residents to turn to public transport.”
Commuting
-“For those who drive, finding a parking space in urban areas of Australia is next to impossible. Professionals with cars have to often rent out spaces just so that they have a place to keep their car while they are at work. Even when one is lucky enough to find a parking spot, the rate per hour is expensive.”
Air Travel
Consumers are enjoying lower domestic air fares.
-“Consumers have seen domestic air fares decline in recent years as airlines such as Qantas, Virgin Australia and Jetstar (and recently, a reinvigorated Tiger) continue to add capacity in an effort to boost their market share.”
A new breed of beach-loving FIFO (Fly In, Fly Out) commuters are emerging.
-“…there is a new and growing group of ‘extreme commuters‘—those who travel more than 100 kilometres work—who are motivated by more than just their relatively lucrative jobs. Indeed, these commuters are willing to fly long distances to work in Brisbane, Sydney and the Bowen Basin from the city of Gold Coast in order to keep their beach lifestyles.”
