“All of that money sloshing around last year – it was jacuzzis and new kitchens galore where we live. I can’t believe how grim the picture looks just a few months later.“
This forum user perfectly sums up the impact that soaring inflation has had on people across the world. A perfect storm of post-Covid supply chain challenges, the consequences of rising business costs, and the war in Ukraine, have combined to form a maelstrom of misery that has sent global prices skyrocketing. This economic climate is raising fears of a global recession, with citizens in most countries already experiencing a fall in living standards.
That’s the macroeconomic overview, but what do people really think? Quantitative charts and economic statistics only tell us so much. To get to the heart of what people are thinking and feeling, you need to read and understand their experiences. The best way to do this online market research is using text data.
To discover the hidden insights of the cost-of-living crisis, shopper marketing experts Golley Slater worked with Relative Insight on a study. The combination of our text analytics software and their industry expertise enabled Golley Slater to delve below the surface to truly understand how surging inflation is impacting consumers. The result of this analysis is a brand new report: Navigating a financial crisis: the impact on shoppers and how brands can add value.
Here are some of the key insights:
What consumers are discussing
By analyzing social and forum conversations we were able to understand what consumers really thought about the cost-of-living crisis – and ascertain what steps they were taking to combat it. Relative Insight’s text analytics platform highlighted seven key discussion areas:
- People have been taken by surprise at just how quickly rising inflation has hit their budgets: “I think it’s shocking, given that last year things were looking up.“
- Consumers are cutting back, but still enjoying some treats: “I don’t have any luxuries... I could probably stop having dinner at the pub every Wednesday, but it’s my one treat.“
- Even those not in financial peril are reducing their spending: “Turned off the hot tub as that’s heated all the time (I know… first world problem) not just randomly buying things that are ‘bargains’, we’ve been lucky for many years, so these feel like small steps.“
- Consumers have different definitions for essentials and treats: “I love going out to restaurants, I don’t want to stop just to save money. However, I’ve cut back on takeaways/ Deliveroo’s because it really adds up …. other people will think completely the opposite – do what works for you.“
- Shoppers are taking the opportunity to organize their spending: “I actually like doing a spreadsheet. I keep a transaction log, which I pre-populate with my regular monthly expenses, then I manually add each time I buy something.“
- People are planning their meals to save money: “Plan meals for the week including going out. This includes breakfast, lunch and dinner.“
- Consumers are using budget grocery stores – they’re 82x more likely to mention Lidl and 66.7x more likely to mention Aldi: “Try Aldi, similar price but better quality especially fruit, veg, and meat.“
Brands need to take note of this online market research – it will aid them in taking action to retain and attract customers.
Using online market research to understand the impact of inflation on different sectors
The analysis of social and forum data also surfaced insights across a number of different industries, and interesting developments in the food and drink, fashion, fitness, and hair and beauty sectors were uncovered.
Food and drink are necessities people can’t completely cut, but they are looking to reduce their spend on these essentials. Much of the conversation online focuses on how consumers can cut costs – with some types of food and drink now seen as luxuries.
People were more likely to use the words ‘restaurants’ (6.3x) and ‘takeaway’ (3.9x) in March than the four prior months, noting their intention to cut back on these types of meals. Since November 2021, coffee drinkers have signalled their intent to reduce the amount of ‘coffee on the go’ they buy. Customers discussed the drink 9.6x more in November than December, and were 39.4x more likely to use it in January and February than in March.
Consumers’ financial straitjackets are also being wrapped around other sectors. In fashion, the word eBay was infinitely more likely to occur in January than the two prior months, with people increasingly discussing their second-hand clothes purchases.
March was a key month for the fitness and hair and beauty sectors. The word ‘gym’ 7.5x was more likely to occur in this month when compared with January and February – with discussion focused on forms of exercise which don’t require gym memberships. The words ‘salon’ (62.7x), hair (21.7x) and hairdresser (40.7x) were also more likely to appear in March than previous months. However, these conversations highlighted that people will these types of businesses less frequently, rather than eliminating them altogether.
Learn more by reading the full report
Understanding consumers’ mindsets is vital to businesses maintaining performance in these fraught economic times. The fusion of the Relative Insight text analysis platform and Golley Slater’s market knowledge has produced an essential read for all brands looking for vital business intelligence to help them withstand the oncoming economic turbulence.