Turbulent Times and the Impact on Consumer Behaviour by Adelene Tue 13 Nov
There is no doubt that we are living in turbulent times, with the economic impacts of other countries directly affecting the stability and growth of our own economy. The challenge is for companies to adapt to the external environment and understand how consumers are reacting to the changes. Consequently, this has an impact on what we buy, namely household items. A main trend emerging is the increase in introduction of lower priced items on supermarket shelves, with consumers shying away from higher priced alternatives.
If the GFC taught consumers anything, it was that spending had to be evaluated, and consumers have listened. Now, brands are offering lower priced variations of their products to adhere to the change in consumer trends. For example, household brand Tide has released a lower priced laundry detergent ‘Tide Basic’ to offer consumers a lower price point for their basic household items.
Coles and Woolworths home brands have created a marry of effective branding and low prices, to increase perceived value with prices to match. Their branding has seen a new perception of lower priced items, a far cry from the Black and Gold home brands that were typically associated with being home brand.
Premium brands valued highly in the minds of the consumers; the value for money with lower priced alternatives are flooding our shelves. In order to differentiate, they need to offer consumers incentives and benefits that the lower priced items are not offering. The challenge for companies is to create a product that offers value and a price point to match. The perceived value must match the perceived price, which is why setting price is so critical. To achieve this, surveys are a good form of research, which will allow companies to understand consumer purchasing behaviour and motivations based on lower and higher priced products. In these turbulent times, premium brands need to advertise benefit-driven messages to emphasise the quality and superiority of their products. Until then, the lower priced alternatives are the winners.
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