Understanding the consumer of 2021

Lockdowns with little advance notice, panic buying, supply chain disruptions, hastily made changes to health and safety regulations, and extreme swings in consumer needs and expectations. Such are the challenges that retailers, along with personal care and hospitality businesses, faced during the pandemic. How did they fare and how have consumers changed due to their pandemic experience? CommBank’s inaugural Consumer Insights report explores the answers.

Adaptability tested

In the eyes of the 5656 consumers surveyed for the report, businesses responded admirably. Some 61 per cent believe that retailers and providers of personal care and hospitality services adapted well to the circumstances and to consumers’ changing needs.

Almost a third of consumers report better online shopping and delivery experiences during the pandemic and more than 20 per cent report that in-store experiences improved. Consumer-facing businesses have built valuable goodwill among their customers.

Consumers unevenly impacted

Thanks to Australia’s world-leading management of the health and economic crisis, a majority of consumers report that the pandemic either had no impact or a positive impact on their physical, mental and financial wellbeing. However, for the 27 per cent whose employment was hit by the pandemic, the impact across all aspects of their lifestyle was negative.

More generally, many consumers took a cautious approach to their finances amid the pandemic. Some 42% reduced their overall level of spending and 40 per cent redirected money normally spent on experiences like travelling, towards savings and investments.

Priorities reset

Confined to their homes, consumers found new ways to spend their time. Have new behaviours become habits? The majority of those who occupied themselves by watching TV, shopping, gaming and engaging with social media say time spent on these activities will either taper this year or revert to pre-pandemic levels.

However, the majority of those who spent more time than previously on cooking rather than dining out, being with partners/children, reading, and leading healthier lifestyles, indicate these habits will stick. This illustrates a change in value set for a proportion of the population that is not only influencing preferences but is an opportunity for businesses to better align with what customers really care about.

Shopping locally and buying Australia-made products is a good example of another value that consumers acquired during the pandemic and will likely persist.

Changed shopping behaviours…

During the pandemic, spending in certain retail categories soared, while spending in other areas slumped for a period. According to the report, these spending patterns have not become engrained. A majority of consumers indicate spending will revert to pre-pandemic levels.

The research also finds that across the relevant retail and fast-food categories, there has been an average uptick of 2.6 per cent in consumers’ preference for online as their preferred channel. Nevertheless, in-store overwhelmingly remains the channel of choice. Effective omni-channel strategies are more important than ever before.

…and expectations

Convenience and quality have become more important to shoppers, as have options to buy products made or sourced in Australia.

Additionally, given 26 per cent of retail purchases are now made online and more people are working flexibly, fast, convenient and reliable delivery options and user-friendly websites are in greater demand.

For now, basic measures to prevent the spread of the coronavirus are expected in-store. These include the provision of hand sanitiser, spacious layouts, strict monitoring and enforcement of customer numbers, and frictionless digital options around check-in and payments. Once businesses get this right there is a good foundation upon which to build a more engaging experience for shoppers.

Understanding the consumer of 2021

The events of the past year or so have influenced the way many Australians live, work and shop, and shaped their spending and saving behaviours in different ways.

Understanding consumers’ current behaviours, expectations and intentions will help businesses to continue to adapt as consumer needs change.

Read the full report

CommBank is dedicated to supporting Australian retailers to achieve their vision. For more information on how we can help your business visit commbank.com.au/consumer-insights or email insights@cba.com.au

About CommBank Consumer Insights

CommBank Consumer Insights is an exclusive, wide-ranging analysis of the Australian consumer with this edition focused on evaluating the impact of the coronavirus pandemic on consumer lifestyles and behaviours. This edition is based on an online quantitative survey conducted by ACA Research on behalf of the Commonwealth Bank. The survey was conducted in January 2021 and was completed by 5,656 consumers of goods and services, with each respondent answering questions based on one of the following categories: groceries (n=353), liquor (n=353), fashion (n=354), homewares and household appliances (n=355), DIY, building, garden supplies and hardware (n=354), consumer electronics (n=352), motor vehicle parts and accessories (n=352), health and beauty (n=357), books, gaming, music and media (n=353), recreational goods (n=354), fast food and quick service restaurants (n=350), restaurants and cafes (n=356), pubs (n=353), clubs (n=352), accommodation (n=353) and personal care services (n=355). Survey participants were segmented by generation as follows: Gen Z, aged 16-24 years (9 per cent), Gen Y, aged 25-38 years (27 per cent), Gen X, aged 39-54 years (28 per cent), Baby Boomers, aged 55-72 years (26 per cent) and Pre-Boomers, aged 73 years and over (10 per cent). The sample was selected to ensure the results are nationally representative. All statistics and references to consumers in this report are based on the responses to the survey unless otherwise stated. CommBank Consumer Insights: Edition 1

Things you should know:

The report has been published for general information purposes only. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this information, consider its appropriateness to your circumstances and, if necessary seek professional advice. The Bank believes that the information in the report is correct and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its compilation, but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made in the report. Any projections and forecasts are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Different assumptions and estimates could result in materially different results. The report refers to data sourced from an online survey of 5656 consumers. The survey was undertaken by ACA Research on behalf of the Commonwealth Bank. All analysis and views of future market conditions are solely those of the Commonwealth Bank. Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945.