The Reserve Bank of Australia (RBA) predicts that economic recovery over the coming months is likely to be driven by eased restrictions, which will lead to a boost in employment and consumer spending.
While the future economic landscape remains to be seen, here are some of the consumer spending trends we could see in the new financial year.
1. eCommerce will surge.
Unsurprisingly, COVID-19 has seen the eCommerce industry skyrocket and Australians are shopping online more than ever before. A report by Australia Post revealed online shopping in April 2020 was 31% higher than the same period in 2019, with more than 200,000 new shoppers entering the market and purchasing something online for the first time.
Looking forward to FY21, we’ll likely see this trend continue as businesses in many industries shift further away from the bricks-and-mortar model to adopt a greater reliance on eCommerce.
For trades and industries where eCommerce isn’t a primary sales channel, we’ll likely see businesses adapting to changing consumer behaviour with elements like online booking systems and eGift cards. There will also be a focus on providing an intuitive online experience with well-designed websites and making it easy for customers to find information and answers to questions on their websites using strategies like SEO.
2. Price-conscious consumer behaviour will be on the rise.
During the 2008 Global Finance Crisis, off-price, discount and emerging businesses succeeded by catering to new consumer demands. Post COVID-19, finding ways to prove value – monetary or non-monetary – to customers will be a key success factor. The businesses to lead the charge will:
- Reward loyal customers with discounts or deals
- Offer products or services that are of a higher quality or unique to other businesses in their industry
- Solve customers’ key problems
- Provide personalised and convenient service
- Demonstrate value by building strong relationships with customers online and offline
3. In-home essentials will be a priority.
Panic buying aside, consumers have been stocking up on food, toiletries and other essential items, suggesting that people believe they’ll be staying home for the foreseeable future. This may be due to fear of transmission as a recent Guardian poll found the majority of Australians expect a second wave of COVID-19 as a result of restrictions being eased.
This financial year, we’re likely to see continued demand for products and services in essential categories such as food, liquor, beauty and pharmaceutical. We’ll also see discretionary spending on items that enhance the stay-at-home experience, like home entertainment, streaming services and gaming systems.
Businesses in trades industries should also see an boost in activity as home improvement projects surge and restrictions continue to ease across the country.
4. Local small businesses will be more important than ever.
One major impact of COVID-19 is that consumers are shifting their focus to small businesses that have a more direct impact on the local economy and community.
In the year ahead, consumers will be looking to support brands they know and trust. Small businesses that can reinforce this connection with customers through the right marketing tactics will be well positioned for success. This includes:
- Asking customers what they need and want from your business
- Adapting your messaging to highlight what you’re doing to support customers
- Focusing on building relationships rather than just ‘closing the deal’
- Using SEO to boost your local search engine rankings
If you’re looking to revamp your digital marketing efforts in the new financial year, Yellow can help you reach the right people with the right messaging. Find out more about our services here.