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The 4 types of COVID-19 consumers: Which one are you?
Australians are still living in fear of worsening economic conditions, with a study revealing changed spending behaviours across the board despite varying levels of individual financial impact.
The 4 types of COVID-19 consumers: Which one are you?
Australians are still living in fear of worsening economic conditions, with a study revealing changed spending behaviours across the board despite varying levels of individual financial impact.
McKinsey & Company has identified four distinct consumer segments as emerging from the COVID-19 crisis.
That same research revealed price consciousness as being on the rise in Australia, with six in 10 Australians reporting being very or extremely concerned about the economy since early April.
While McKinsey & Company did find each consumer segment to be very distinct, the organisation’s leader of consumer packaged goods and retail practices Australia and New Zealand, Jenny Child, said there has been “a strong intent to pull back spending across almost all segments of consumers”.
“The cautious consumer is not a passing phenomenon, it’s here to stay,” she conceded.
Here are the four different types of consumers in a COVID-19-impacted world, according to McKinsey & Company:
- Making ends meet
This segment was struggling prior to the pandemic and continue to struggle.
- Optimistic but cautious
This group is worried about the health impacts of coronavirus, as well as the economic impacts. In saying this, this group is a more financially secure sector of the population.
- Stable and consistent
McKinsey & Company outlined that this group is the highest income segment. These consumers have experienced a small amount of financial impact but have been able to hold onto a “relatively stable” mindset throughout without too much change to their spending behaviours.
- Income in jeopardy
This segment consists of individuals and families who have already seen a significant change to their household income as a result of COVID-19. They also have a fear it will worsen further.
Despite the recent announcement that JobKeeper and JobSeeker stimulus methods will continue until at least March 2021, albeit at a lower rate, McKinsey & Company said it “will not cushion the full impact of COVID-19 on household incomes”.
“Households are tightening spending in anticipation,” it was reported, meaning that across all four segments, there has been an emergence of “longstanding recession behaviours”.
According to Ms Child, this has meant frugality, reuse and shifts to discounted shopping methods and bargain hunting are very much coming to the fore.
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