A recent survey from the Boston Consulting Group (BCG) has found one in five Australians purchased at least one new category online over the past month, while the appetite for domestic brands is on the rise.
BCG's 'Australian Consumer Sentiment Snapshot: Confidence, Nostalgia and Shifting Trust' shows the average number of new categories purchased by Gen Z and Millennials was nearly four, compared with nearly two new categories purchased by the Baby Boomer and Silver segment combined.
The top 12 categories purchased online for the first time include education, preventative health care, takeaway food and medical procedures, and this is the case across all age groups.
Gen Z and Millennials increasingly turned to e-commerce for insurance, home renovation products, personal care products and pet care products, while many Baby Boomers and Silvers bought shoes and footwear, women's clothing, plants and gardening supplies, and fresh fruit and vegetables online for the very first time.
"The BCG report has revealed seismic shifts in how Australians are spending their time and money, and importantly, who they trust in the COVID-19 environment," says BCG managing director & partner Monica Wegner.
"That's why in these rapidly changing times, creating and maintaining consumer trust should be a key focus for organisations to ensure they maintain their relationship with customers into the future."
The findings are consistent with reports of e-commerce upticks for a wide range of Australian retailers, including homeware specialist Adairs (ASX: ADH), online furniture retailer Temple & Webster (ASX: TPW), e-commerce giant Kogan (ASX: KGN), Booktopia, footwear purveyor Accent Group (ASX: AX1) and department store Myer (ASX: MYR), as well as supermarket majors Woolworths Group (ASX: WOW) and Coles Group (ASX: COL).
The BCG report also reveals 84 per cent of Australian consumers believe that there will be an economic recession post-COVID-19, however only 40 per cent feel financially insecure at this stage.
"In this time, 47 per cent of surveyed consumers are abandoning luxury products, and 64 per cent say that basic and simple products that do the job are all they need, placing greater emphasis on purchases that promote self-reliance and provide comfort and assurance," says Wegner.
Organisations that invest well in digital services will be pleased to know that consumers are likely to continue using those online platforms when COVID-19 is over.
One third of Australian consumers surveyed for the BCG report said they will increase spend on digital purchases post COVID-19; 34 per cent for Gen Z and Millennials and 31 per cent for Baby Boomers and Silvers.
Consumers said they will increase online spending on travel, preventative healthcare, insurance, appliances, education and home essentials.
"Companies that can leverage technologies by meeting changing consumer demands online complemented by human interaction where it is needed most have the opportunity to earn consumer loyalty well after their concerns subside," says Wegner.
The report also demonstrates an increased desire and appetite to buy Australian brands, with 37 per cent of consumers saying they would purchase Australian brands - a 56 per cent increase from 2016.
This is despite the premium price perception of domestic goods, with the trade-up for Australian brands largely seen in fresh food, personal care, packaged food and first aid/medicines.
The BCG report found consumer trust in health service providers, supermarket chains and Australian State and Federal Governments had increased significantly over the last month.
Net trust in health service providers has risen 25 per cent, national supermarket chains 18 per cent, the Federal Government 18 percent, State and Territory Governments 17 per cent, telecom providers three per cent and banks net neutral.
For supermarkets, this is in part owed to a strong investment in services that ensure the basic needs of Australians are met, such as measures to ensure older Australians can access supermarkets and a strong suite of online and offline services to get groceries to peoples' doors.
"The BCG report shows consumers are carefully watching how Australian institutions are responding to the crisis and the initiatives they're providing, to determine how much they trust them," says Wegner.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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