Australian consumers are redirecting nearly $450 a month, largely towards essential goods and services or savings, and are changing their spending habits to cope with increased living costs, a new Commonwealth Bank survey has revealed.
The latest CommBank Consumer Insights report showed discerning consumers have become more cautious about spending, and are researching before they shop, while businesses have turned their focus to digital technology to improve purchasing experiences, personalise interactions, and boost customer loyalty.
The survey of more than 5,200 Australian consumers found that a quarter of Australians (27%) have not enough, or just enough, money to meet household expenses.
Irrespective of their financial situation, Australian consumers were redirecting an average $448.40 per month to grapple with cost-of-living pressures, but whereas people living comfortably were redirecting $425 monthly on savings, those doing it tough tended to use their $471 to cover bills and essentials, the survey showed.
Consumers have reduced their spending on discretionary goods and services to everyday food and essentials, and household expenses like utility bills, fuel, and mortgage repayments.
In response to rising living costs, Australian consumers were making behavioural and lifestyle adjustments, with more than nine in 10 adopting deal-seeking behaviours and reviewing their spending choices. This includes using promotional codes, cashback offers, and rewards (73%), researching more before buying (66%), and only buying from businesses they know and trust (46%).
“While some people are under more pressure than others, a value-driven mindset is more pervasive,” said Marcel Klassen (pictured above), Commonwealth Bank’s general manager business banking channels. “That’s heightening the demand for retail and hospitality experiences that instill trust, while saving time and money.
Klassen said discounting was not the only way to attract customers and maintain their loyalty.
“It can be ensuring they are protected against scams, keeping their data safe while not collecting unnecessary personal information,” he said. “Data security is also essential to trusted interactions where consumers can confidently share personal details and get a more seamless and customised experience in return.”
Eighty-four per cent (84%) of consumers agreed retailers and hospitality providers should leverage technology to improve the purchasing process and personalise experiences. But consumers also expect the personal data that powers these improvements to be secure, amid concerns about cyber breaches.
Consumers ranked data security and control as one of the must-haves when buying from a retail or hospitality business. They wanted businesses to be transparent with data collection and sharing (84%) as well as offering them the control to view, update, and delete stored data (81%).
Consumers have become more vigilant to increasing incidences of scams and fraud, with 66% unsure which retail and hospitality websites can be trusted and more than 46% actively avoiding online marketplaces due to fear of losing money to scammers, the survey showed.
Australians looking to make a purchase consider a wide range of payment options for fast checkout a top consideration, with 84% saying it was either ‘nice to have’ or a ‘must have’.
The number increases for Generation Z consumers, with 40% saying payment optionality is non-negotiable. Younger Aussies were also more comfortable using other digital payment options, including mobile payments and buy now pay later, CBA reported.
Read the CommBank Consumer Insights report.
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