It’s no secret the cost of living crisis has spun consumers’ usual spending behaviours on its head. With shoppers facing sustained price increases for some time now, we take a closer look at areas where our LaunchPilots are scaling back spending their hard-earned money outside their grocery spending.
Our data shines a light on the various areas our LaunchPilots have made cutbacks over the past 6 months (outside of their grocery shopping) as a result of the rising cost of living:
– 70% of consumers have spent less on eating out and 67% have scaled back on takeaways
– 63% have cut back spending on clothing and 47% are cutting back on footwear
– Over ½ have scaled back spending on out-of-home experiences such as going to the cinema and/or theatre etc (53%).
– 45% have spent less in beauty services including hairdressers, manicures and/or massages etc.
Furthermore, 4 in 10 LaunchPilots surveyed report cutbacks in Travel/holidays, beauty products (e.g. makeup, skincare etc.) and alcoholic beverages.
Although 81% reported feeling financially squeezed in March 2023, around 1 in 10 also told us they intend to maintain or increase their spending in non-essential areas in the next 6 months such as travel/holidays (18%), clothing (14%) and home improvements (13%).
What are our LaunchPilots doing to save and make money as a result of the rising cost of living?
As energy prices continue to increase, unsurprisingly nearly 7 in 10 of LaunchPilots surveyed told us they have been taking measures to reduce home energy consumption (67%) in the last 6 months with a further 55% anticipating doing this in the next 6 months.
Over ½ told us they have used secondhand online marketplaces like Ebay, Vinted, Gumtree or Facebook Marketplace to sell their unused items/clothing/ toys. A further 53% anticipate using these marketplaces as we move further into 2023 underlining the popularity of such platforms particularly during times when money is tight. One-third of LaunchPilots surveyed have bought second-hand/refurbished goods more than they used to (33%). The proportion of LaunchPilots surveyed who are considering doing this in the next 6 months increases to a further 40%.
Spending in the personal care category also appears to have taken a dip with 41% of LaunchPilots surveyed reporting spending less on these products in the last 6 months and a further 32% considering spending less in this category over the next 6 months.
Entertainment subscriptions are another expense where our LaunchPilots have made cutbacks. 31% cancelled services like Netflix and Spotify, and a further 24% told us they anticipate doing this in the next 6 months. Indeed, back in 2022 Kantar reported a fall in the number of subscriptions to TV streaming services by 2 million as the cost of living crisis hit households in Britain.
Are consumers dipping into their savings where possible to help offset their essential costs?
We found that 2 in 10 LaunchPilots surveyed have used their savings to maintain their living savings in the last 6 months. A further 3 in 10 told us they are currently using or planning to use their savings to cover their spending (either essential or non-essential costs). Of those LaunchPilots who are using/planning to use their savings, a huge 85% plan on using their savings to cover essential household costs such as food/groceries, energy/fuel or mortgage/rent.
In terms of non-essential spending, 1 in 10 told us they are using their saving to pay for luxuries and treats. The top three mentions for what our LaunchPilots are currently/will be using their savings to purchase include: holiday/travel (25%), home improvements (18%), small luxuries (12%) like takeaways or eating out, such as takeaways or eating out, candles or other home decorations, haircuts, skin/body care products, clothing and shoes etc.
How can FMCG brands maintain consumer loyalty at a time when value is currently a front-runner in consumer purchase decisions?
The competition for retailers and FMCG brands is as intense as it’s ever been to not only retain customers but also connect with them moving forwards in such turbulent times. Understanding your consumers and their shifting preferences as well as how your brand is perceived is fundamental to enduring any downturn- this is where Launchpad Research can help!
Here at Launchpad, we celebrate that there is ‘no one-size-fits-all’ approach when it comes to designing a research study that meets your requirements. From designing a tailored brand tracker that keeps an eye on metrics like awareness, consideration and loyalty, to conducting shopper research such as shelf tests or store intercepts– we will work with you to design the best research solution to unlock actionable insights which provides you with the answers to your burning questions!