Eye on Australia – The Silent Fear
First published in AdNews on 22 April 2011. This article was written by Paul Gardner, Chairman of Grey Group in Australia.
The 20th annual survey that takes a snapshot of the national mood shows that we’re in great shape, but we’re far from happy. so what is this feeling of unease all about and what does it hold for us?
With a robust economy, low unemployment, minimal inflation, the dollar at parity and a prime minister who isn’t Silvio Berlusconi, surely we should be describing our nation as buoyant, confident, optimistic and satisfied.
At worst, we’re still the envy of rest of the western world; at our best, we’re as ever “The Lucky Country”.
Yet while all of these terms certainly describe Australia from a rational and economic point of view, emotionally our vantage point is not quite as rosy, which augurs ominously for our marketers and advertisers.
We entitled this year’s Eye on Australia (the 20th and as always, carried out by Sweeney Research), “The Silent Fear”, as it clearly identifies a ‘feeling’ of unease in the community… Of what could go wrong… Of what could change… Of what we might lose. And it is this growing fear for tomorrow that is quite clearly affecting our satisfaction today.
Since the study first launched in 1992, Australians have generally become more positive and satisfied with life.
But this lineal progression appears to have taken a turn for the worse, since the peak of 2008. And the reason we found was quite simple – Australians today fear for Australia tomorrow.
A lot of this change appears to be a real concern for the economy, a sense that while we may well have dodged one economic bullet, others still might be coming our way.
We have noticed that, in terms of geographies, this concern is greatest in NSW and Queensland (and that was even before the rain, the floods, the hurricane and the Gold Coast Suns!).
Essentially, there are a number of factors contributing to this malaise.
For starters, the basics in life are costing us more. Let me give you an example. In Eye 2009, 9% identified “cost of living” and 1% “utility costs” as major concerns for the future. Today, both these numbers are 13% and rising.
The other emerging concern, in Eye 2011, is house affordability with 45% of people fearing that the Great Australian Dream is fast becoming more of a nightmare, and the clear number one reason why we’re having trouble sleeping at night.
These cost pressures have fundamentally changed the way we’re shopping which, given other retail pressures and oligopolistic concentration (especially in supermarkets) has serious implications for both brands and retailers.
Today’s shopping centres and strips are full of prudent, savvy shoppers and sales junkies. Not only are we now saving 10% of disposable income (as opposed to -2% in 2000), but 78% of Australians claim they try to buy as many things as they can on sale.
Shoppers today clearly only buy what they absolutely need, with 84% claiming to be actively reducing their debt, and most anticipating spending less on ‘nice to have’ versus ‘basic necessities’ over the next 12 months.
And for many, the search for a bargain begins way before they consider entering a store – if they in fact go anywhere near a shopping mall.
In 2011, window shopping has been replaced by Windows shopping with 86% now searching the internet for information, 61% researching products before they buy, and 52% checking supermarket prices and grocery bills.
And while we’re at the checkout, four out of 10 people are now buying more house-brands with 65% strongly agreeing that they are just as good quality.
In fact, our view is that after a lifetime of ‘never mind the quality, feel the width’, EDLP and price match guarantees, our Über retailers have created a monster surge in consumption which shows no sign of abating.
They have in the past educated shoppers to buy more on price than service and are now, with dollar parity, really feeling the pinch.
My sense on “traditional” versus “new” retailing is that if it’s not perishable, and it fits in an envelope or a box, you might as well close the shop now because “bricks n’ mortar” is about to make way for “clicks n’ order”.
And that’s just the beginning of this revolution, with 49% of all mobile phones now described as “smart”, this means nearly half of us walk around with the internet, a price checker and an automatic digital order form in our pocket.
So although Australia didn’t technically reach the point of recession, we’re keeping a close eye on the economy (and the contents of our bank accounts) in case a “second dip” does occur.
Australians have now changed the way we buy and consume, with many luxuries making way for bare necessities and just surviving.
People have decided to spend more on the basics (general household costs, utilities, health and wellness) and less on “unnecessary” indulgences, such as special occasions, dining out or even buying take away foods.
Consumers are clearly exhibiting this silent fear, but perhaps it is the traditional retailers and marketers (especially of any good or service that could be considered as a “luxury”) who really should be afraid. Very afraid.
