As New Zealand continues to grapple with a high cost-of-living crisis, and significant impacts from inflation and governmental changes, a report published from Circana, the leading advisor on consumer complexity, highlights substantial increases in living costs over the past year, affecting consumer spending power dramatically. Notably, 97 percent of Kiwis are concerned about soaring costs, with many resorting to drastic economic measures such as cutting back on essentials and tapping into savings to manage expenses.
Circana's 'Outlook Report for 2024 - Breaking new ground - Paving the road to growth in tough times' has examined the dynamic shifts in New Zealand's retail environment amidst ongoing economic pressures and societal changes. This comprehensive analysis has provided insights into consumer behaviour, spending habits, and the implications for businesses operating in a challenging economic climate.
The report has identified substantial shifts in the demographic landscape, including the aging population, the rise of single-person households, and the growing Māori, Pasifika and Asian communities. Conversations around mental health and wellbeing are being driven by the prevalence of remote working and the stress small businesses face from cash-flow challenges. These changes influence market strategies with a push towards more personalised products and communications.
"As we brace for continued disruptions in 2024, it is essential for brands to remain agile, and ready to connect with and support consumers through these challenging economic times," said Alistair Leathwood, Head of Media, Insights and Analytics at Circana.
"A brand's true value is reflected not in what it claims, but in what consumers say about it. Staying ahead with new product developments, assortment, innovation, sustainability, and health and wellness initiatives will be key to managing a brand's value proposition. Brands must focus their growth strategies on the needs of tomorrow's New Zealanders."
As consumers adapt to economic constraints, their shopping habits have evolved. The report notes a trend towards more budget-conscious decisions, with 52 percent of Kiwis foregoing their favourite brands to save money. However, the long-term growth in the e-commerce sector remains resilient, with 74 percent of online spending directed towards local businesses, despite a decline in the average online shopping basket size.
The pharmacy sector is thriving through competitive pricing, while the petrol and convenience sectors are showing signs of resilience, driven by strong sales in food-to-go and promoted beverage items. Despite rising fuel prices and the growth of electric vehicles, enduring success is being driven by strategic online deals and delivery options.
Circana's report serves as a crucial resource for retailers, providing data-driven insights and forecasts that are essential for navigating the complexities of the current economic landscape and helping solve ongoing business challenges.
"We remain committed to supporting businesses through these turbulent times with innovative solutions and strategic guidance. For example, Circana's Liquid Data platform is at the forefront of a transformative era where AI doesn't just solve problems - it transforms data targeting, supply chain optimisation, pricing strategies and media campaign management. Our applications are not only strengthening client partnerships they are also driving improvements as we unlock the immense potential of AI."
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