Ross Honeywill, managing director of the Neo Group and foundation director of the Centre for Customer Strategy, believes consumer behaviour is changing in two ways.
Research conducted by his group, trawling through 750,000 respondents on the Roy Morgan database, reveals that so-called “traditional consumers”, who tend to be average earners in the 45 to 50-plus age group, are on what he calls a “flight to security”.
“They are getting out of equities in the sharemarket and out of property investments and putting their money into their own property,” Honeywill said. “They are trying to make their money passive and safe.”
The group he describes as NEOs, or the new economic order, representing high income earners in their 20s, 30s and early 40s, are on a “flight to quality”.
They are moving their money from shares to high interest savings accounts. Instead of overseas trips, they are investing in their own homes. And they are making sure their personal trainers and yoga teachers are on 24 hour call. “They are spending more, but buying less,” he says.
Traditionals represent about 50% of consumers, NEOs about 24%, and the rest are “evolvers”.
Honeywill says the brands that would do well in this climate are those that seek to enrich, rather than just engage the consumer in a transaction.
“That means everything from yoga to personal exercise, right through to quality wine, quality resorts, particularly spa resorts, right through to certain car brands, that provide a lifting of the spirit,” he says.
“Brands that just continue along a traditional path and not stand for anything won’t do well.
“Businesses that are targeting traditionals are going to struggle, because they go to the wall and stop spending and the only way to get them is through sale events that are just ridiculous.”
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