June 2022 - Consumer Mindset
A Replacement for COVID Concern?
The prominence and importance of particular stories hint at a sense of a different fear for personal circumstance in June 2022. Inflation is at its fastest rate of increase since 1984 and nearly two-thirds of the adult population are now “very” or “extremely concerned” about it, and this equates to the levels of concern about Covid when it spiked in the beginning of 2021.
Fear is a powerful emotion and shadows the reality that the proportionate spend on petrol/diesel is far lower than back in the previous peak 1980s inflationary times. In addition, the Summer means lower energy usage. People maybe already looking ahead to how they cope with further inflation. Personalisation may also bring the Dublin Airport logjam to the fore. Holidays are a precious time and there is fear that the start of the annual holiday could be hindered when it is their turn to fly.
Keeping Confidence low.
The personal fears are keeping confidence on a downward trajectory. Consumer confidence has dropped for a fourth month in a row. As people adjust expenditure to off-set inflation, will confidence flatten out next month? To protect themselves, consumers’ personal expenditure decreased slightly in April, at the beginning of the inflation climb, and their savings increased in Q1 (savings ratio at 19%). The summer can typically bring light-hearted times and more spending, but consumers may want to protect themselves further through spending less and saving more.
Need for Cheer
Yet, it is not all gloom and consumer spending on the escape from Covid saw people return to being social animals. People still need moments of joy, particularly after confinement, and there has been a marked increase in spending on transport, accommodation, dining out and entertainment as people enjoy their escape.
Covid seemed to remind people that there is an outdoors in Ireland and outdoor living remains strong with a higher volume of people pursuing some type of outside activity. As a result of time outside, the attendance to mental well-being is improving.
Emotional Flux
Consumers are trying to protect themselves with budget management while also providing themselves with some moments of joy. Core’s Emotional tracker reveals the tensions between these two sentiments. There is more pain and anger, particularly in lower income households. There is also less hope. Yet, at the same time, there is less anxiety, and more contentment, as people who can afford, are adjusting their budgets based on increased pricing.
The consumer’s emotional state is challenging for brand owners and it is important to consider when thinking about how to communicate. In a world of uncertainty, what consumers might need most is simple consistency and an imbued sense of trust in their brands, so they are reassured that there is empathy for the consumer in challenging inflationary times.
