The third instalment of Nature's Cost-of-Living series was released today. This report introduces a segmentation that sheds light on the stark divisions created by Australia's cost of living crisis.
Presented to a crowd of over 100 marketers and insights professionals this morning at Sydney’s Museum of Contemporary Art, Nature’s latest research provides important practical insights for brands as they look to drive meaningful connections with a highly divided nation.
The data strongly suggests a two-speed economy emerging as a direct result of inflationary and interest rate pressures, which can be broken into four distinct segments.
Two segments are concerned about the rising costs of living, the Struggling and On Alert (comprising 55% of the nation), while the remaining two – the In Control and Coasting – comprise 45% and are less concerned and making minimal changes to their daily expenditure and consumption patterns.
Nature’s segmentation was developed via a representative survey of 1,000 Australians on a range of attitudes relating to the cost of living crisis. While the segments are primarily differentiated by their mindsets, Nature also analysed six months of actual historic transactions across the segments, revealing those more concerned have spent an average of 8% less across a range of categories since the beginning of 2023, while those in the less concerned segments have actually increased their spend.
Nature Partner and Managing Director, Sydney, James Jayesuria said: “This nuanced understanding of how the cost of living crisis is playing out presents clear opportunities for brands, particularly those occupying either a value or premium position within their respective categories. It does, however, present a much more complex challenge for mainstream and mass brands that wish to neither devalue nor ostracise the millions of Australians suffering growing levels of hardship.
“As such, there is no more important time for brands to be crystal clear on what they stand for, the field upon which they play, the experience they wish to offer their customers, and the product and pricing architecture they plan to use to both attract and retain customers as the crisis evolves.”
Nature Head of Strategy, Aliya Hasan, said: “This new research suggests we really need rethink the rulebook of how to manage brands in a financial crisis – it’s so much more complex than a one-size fits all rule. With purchase behaviour in such a state of flux, balancing the today and tomorrow has never been more nuanced.”