- We’re all wearing purple now. Why we’re focusing more on how we feel than how we look in a post-pandemic world.
- It doesn’t matter if you fall down, it’s whether you get back up – just ask Michael Jordan, or a Striver.
- Adapter, Thriver or Survivor – three different shifts in ambitions and values as a result of Covid-19
- How brands can help consumers navigate their changing ambitions and values
- Navigating the Storm: Values and ambitions in a post-pandemic world
- Navigating the Storm: Concerned and Constrained in a cost-of-living crisis
- Navigating the Storm: Prioritising spending with a frugal mindset
The pervasive discourse surrounding the cost-of-living crisis seems to be having an impact on almost all of us. For many, there is a tangible need to cut back on spending as prices rise, bills increase, and wages freeze. But even for those who can accommodate these changes, the notion of value – of where our money is going and whether it is really worth it – is being called into question more than ever.
Our latest research has found that 4 in 5 of us are now actively trying to keep our monthly commitments down, driven by a 57% increase in pessimism about household finances (from 28% last year to 44% now) and a 62% increase in pessimism about the country’s economy (45% to 73%). This negativity is being felt especially keenly by a group we’re calling the Concerned and Constrained (introduced in our previous blog post). 1 in 2 of us fall into this group, who are characterised by their worries about the rising cost of living for self and society, having less disposable income vs 12 months ago, and being more careful about their spending.
So, what material changes are we making as a result of this more frugal mindset?
Where’s our money going now?
First, let’s take a look at current spending. The most common monthly commitments among all adults in October 2022 were SVOD (60%), going out (52%) and Pay TV (42%). And despite the Concerned and Constrained being defined in part by their attempt to keep spend down, they have the same range of commitments as everyone else.
Where will our money be going?
Although the proportion who spend on Pay TV is comparable across different income brackets, overall this is the area in which most people are looking to cut back (40%). And after a resurgence in spending on going out – partly due to the seasonality of summer and partly due to the easing of over a year of pandemic restrictions – this is the second most common area we’re looking to reduce our spending on (39%). Gaming also looks set to take a significant hit, with just over 1 in 3 who spend in this area looking to decrease their financial commitment.
While SVOD is the category in which we see the highest proportion of the population spending (60%), less than 1 in 3 of those who spend on SVOD are currently looking for ways to cut back (30%). But when it comes to the categories in which we’re most comfortable maintaining spend, fitness, sports and health and wellbeing top the list. Unsurprisingly, very few of us are happy to increase spend in any category at the moment, with 4% of those who pay for SVOD, 5% of those who have Pay TV and 7% of those who spend on going out saying they’re comfortable with potentially spending more.
The especially frugal mindset of the Concerned and Constrained means they’re even more likely to be looking for ways to reduce spend across the majority of categories.
How are we deciding what to spend our money on?
Consumers almost unanimously say that value for money, total cost and quality are important when deciding how to spend their money, along with brand which is important to 7 in 10. Among all adults, value for money is almost four times more likely than brand to be deemed as very important when considering spending money at the moment.
Because of this, deal-hunting has become more widespread. 8 in 10 of us now agree we’re prepared to spend time shopping around to get the best value and 7 in 10 agree we will regularly switch products/services if it helps save money. This means brands have to work far harder to demonstrate the value of what they offer – a topic we’ve previously covered in depth in this blog post. Time is money, but now there’s less money to go around, consumers are more likely than ever to spend time to save money.
If you’d like to dig deeper into spending habits and the values driving our decision-making by audience or category, we’d be happy to share more data and discuss what this might mean for your brand.