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Australians are increasingly facing social isolation as the cost of living crisis reshapes consumer behaviours and financial priorities, according to research by M&C Saatchi.
The study over two years, surveying more than 7,000 in four waves, shows many are cutting back on discretionary spending, including social activities, as they struggle to manage rising costs.
This is leading to a rise in disconnection and emotional strain, especially among younger generations, and with Gen Z / Millennials sacrificing social lives to work more.
"Persistent economic pressure is leading to ingrained behaviours and new consumer norms. Business strategies need to adapt for brands to stay connected and relevant,” said Amy Kousis, strategy director at M&C Saatchi.
The study found 70% of Australians believe the cost of living is reducing the amount of time people spend with others.
More than half of those cutting back on socialising say they can no longer afford to socialise as much, contributing to a significant increase in feelings of isolation.
Of those cutting back, six out of ten feel socially isolated, equating to 12 million Australians.
Gen Z and Millennials are the hardest hit, scaling back on paid activities and sacrificing social occasions to work more in order to make ends meet.
As Australians navigate these challenges, M&C Saatchi says brands have an opportunity to step in and offer meaningful support.
The report outlines key areas where brands can make an impact:
- Foster Connections: As social isolation rises, brands can create low-cost or free social opportunities to help people reconnect with friends and family.
- Deliver DIY with convenience: Brands can support time poor customers, with simple and easy ways to make and create at home. Whether that's through ideas, DiY packages and partnerships, providing products in bulk, or quality storage solutions.
- Empathy and Empowerment: Brands that offer financial literacy resources, stress management tools, and practical solutions to everyday challenges will foster deeper trust and loyalty.
Australians are preparing for a more frugal Christmas.
With two-thirds of Australians lacking confidence in their ability to buy gifts, many are turning to online marketplaces like Temu and Amazon for cheaper options.
DIY celebrations, fewer decorations, and smaller gatherings will likely define the festive season.
Over the past six months consumers have continued to cut back on luxuries. Spending on eating out, drinking, live sport and entertainment remains under the microscope. One in three Australians who spend on sports and entertainment are spending less.
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