Overview
On Tuesday the 7th of March 2023, the Reserve Bank announced their tenth interest rate rise, forcing households to review spending behaviour once again.
Research just conducted by Mumpower in the latest instalment of the “Australian Mums Today” investigation, found that 84% of Australian Mum Shoppers, who largely control or influence household discretionary spend in family households, will once again tighten spend and cut back over the coming 3 months.
Since the interest rate rises started increasing from May 2022, when the Reserve Bank of Australia (RBA) announced that they were lifting the cash rate from a low 0.10% per annum , household have been making dramatic changes to what they purchase. Now the focus for family household is to streamline the balance of unnecessary excess.
The research found that some categories are set to weather current conditions and these spending cuts better than others. Specifically:
- Discretionary “enjoyment” categories are going to feel the pinch most significantly, with the majority of Mums (77%) intending to cut back their spend in the immediate future on Eating out. This means the same industry that felt the impact of the pandemic restrictions are set for another beating.
- Winter Fashion sales will also be challenged and brands will be competing harder for share of the fashion dollar with 50% of Mums saying they will cut back on their Fashion spend (consistent to spend predictions of October 2022 period).
- We can expect supermarket shopping behaviour to be turbulent, with 30% of Mums expected to reduce spending here, largely through buying cheaper alternatives, bulk purchasing, budget meal ideas and changed behaviour such as meat free alternatives.
- And ‘Entertainment’ products and services will be reviewed with 27% of Mums planning to reduce spend, followed by a pull back on travel/holidays.
- Categories least likely to be impacted by cuts in spend include both discretionary and non-discretionary categories, specifically: Baby/Children products / Services (3%), Education/Training (2%), Health & Wellbeing Products / Services (7%); Financial Services / Insurance (Home, Health, Car etc) (4%); Utilities (electricity, gas, water etc) (5%);
- Mums are prioritising spend on their children with only 1 in 4 stating they will cut back on spend of Baby / children products / services, compared to half of all Mums (2 in 4) who say they will cut back on their Fashion spend. This is similar buying behaviour throughout the pandemic where we saw sales for baby and children were least likely to feel the effect.
Here are the categories Family Households are likely to cut back spending in the immediate future (from April 2023) and the industries tipped to be left unscathed.
What does this mean for brands:
- We will see similar behaviour to what we saw during covid: more engagement in family entertainment ideas, meal and recipe inspo, education on health and wellness products & services.
- Great business and brand opportunities include:
- Mums still want to spend in certain categories, so lean into this!
- Make the buying journey easy, and ultimately faster
- Mums are planning ahead more, therefore show up with recency and frequency in the lead up, so that you are the brand she buys when the time is right
- Be compelling and in your comms talk to what genuinely matters to her most to facilitate trust
- Show value for money as not all mums are looking for the cheapest option, but they are looking for certainty of money well spent
- Focus on what data shows moves Mums along sales journey, including: social media presence, product reviews and given the customer today has changed it is critical time for brands to get reacquainted with their actual customer and her revised path to purchase so you don’t leave money on the table.
In summary
Australian Mums Today is a comprehensive research study updated quarterly, commissioned by Mumpower to see where Australian Mothers are at after a tumultuous couple of years.
The study conducted from March 14th -27th, 2023 amongst 633 Australian Mums, largely Gen X and Millennial Mums, is extensive and provides insights for marketers, advertisers and brand custodians who specifically speak to this market. The market research exploration covers insights across a vast array of topics.
To discuss market research insights about Australian Mums in more detail, contact us.
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