CONSUMER CONFIDENCE
Consumer confidence is the lowest recorded score since the study began in 2004. There is a lot of pressure on households, reporting that their financial positions has deteriorated due to rising living costs, rising interest rates, cooling housing market & tighter credit availability.
All factors that are squeezing households’ disposable incomes. The rapid spread of Omicron has also had an enormous impact in consumer confidence across NZ, especially in the North Island.
BUSINESS CONFIDENCE
Business Confidence continues to decline with the Omnicron wave representing more stress, more cash flow pressure and interrupted revenue resulting in Business confidence plummeting over L3M. Comparing to December:
- Both inflation expectations (5.29% vs 4.42% in Dec) and pricing intentions (74.2 vs 63.6) hit fresh record highs.
- Activity indicators were weaker across the board, including own activity outlook (-2.2 vs 11.8), export intentions (0.9 vs 8.8), investment intentions (4.5 vs 11.4), and employment intentions (2.3 vs 10.5).
- At the same time, expectations for profits fell further (-32.7 vs -13.1) while those related to cost mounted (92.0 vs 88.2). Also, the ease of credit deteriorated further (-74.0 vs -70.6)
SO WHAT?
“It’ definitely tough trading out there! However, from a business perspective, there is never a better time to ramp up your marketing activity than when your competitors are dialing down – we can effectively buy market share.
Consumers are going to have less spare cash to make impulse purchases online. Meaning, our cost to acquire customers is likely to go up. We must (if not already) have conversations on how to maximise lifetime customer value to offset higher acquisition costs
From disaster comes opportunity…”
Nick Scott
Client Service / Digital Director
“Tough trading conditions can be a blessing in disguise. It’s never been more important to understand your brands value proposition to consumers & how you are fighting for wallet share! Supply Chain & cash flow issues business are facing means record high levels of “out of stock message” – simply being available & delivering a speedy, seamless customer experience can encourage trial & repurchases in turbulent times.
Audit what the market is currently offering & how your brands stack up against the category – with less disposable income than last year, what is your brand going to do to cut through to new & existing customers?”
Chelsea Davis
Strategy Director
“Given the current state of play, there is a growing opportunity for longer funnels. Despite CPMs increasing currently due to large brands spending to finish the financial year, we predict CPMs to decrease from April onwards due to business confidence.
With declining confidence across the board, we must get a solid framework around LTV of customers. We must optimise our funnels to ensure we are putting ourselves in the best position possible to improve frequency of purchase from a brand & the overall amount they spend with our clients”
Ruben Thompson
Performance Director