Ben Shepherd in his newsletter Signal with three things in marketing and advertising you need to know.
AUSTRALIAN CONSUMER CONFIDENCE ENDING THE YEAR REMAINING SUBDUED
What’s new:
Despite a small bump following Black Friday, Australian consumer confidence remains at sustained low levels. A large driver of this lack of confidence is household perception that right now they remain worse off than the same time last year, combined with a view that in the next 12 months the economy will be even worse.
The below data demonstrates the year to date. A score under 0 indicates more people surveyed feel they are “worse off” than a year ago than better off. And the lower the score, the higher the majority who feel this way. And a score above 0 indicates the opposite. As we can see, from January onwards the trend has been consistent.
Why it matters:
The issue is less around current perception and more the impact interest rate rises, and general economic malaise is having on future perceptions. After a reasonable improvement in August/September, household predictions on being worse off or better off in 2024 have taken a marked turn downwards and at the last week of November are at their lowest levels for the year. The challenge here is arresting this perception of bad times incoming.
Marketer implication?
These indicators can be a reasonable sign of the future health of larger ticket item discretionary purchases rather than day to day non-discretionary or smaller ticket price discretionary items. Still, despite the low claimed levels of consumer confidence we are seeing strong new vehicle demand in 2023 as well as strong domestic and international travel volumes. One sign from Black Friday initial indicators is that deep discounting can drive the release of funds even with low perceived levels of confidence. Marketers will need to balance discounting in order to drive volume and incentivise purchase, with yield and margin (particularly in an inflationary environment where input costs are under pressure)
Ben Shepherd also looks at
- ADALYTICS RAISES QUESTIONS AROUND GOOGLE SEARCH PARTNERS
- TWITTER/X IS GOING TO HAVE TO CRACK PAID SUBSCRIPTIONS IN ORDER TO SUSTAIN ITSELF COMMERCIALLY
Read in SIGNAL
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