Nigel Roberts presents 'It’s Time for a Revolution - Insights from the EY Future Consumer Index'

The rise of the values-
driven economy
Insights from the Future Consumer Index
August 2022

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The rise of the values driven economy

Conceived and run by EY Sweeney out of Australia
About the Future Consumer Index
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–
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4th year of
the survey
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–
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100,000
respondents
across 24
countries
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1000
Australians
responded
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–
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This phase took
place between
18 May - 8 June
2022
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The outlook is gloomy
(but only in the short-term)
What I’m going to tell you
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–
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Consumers’ values have evolved
We’re transitioning to a
values-based economy
Brands with purpose will thrive

A challenging
environment
–
–
–

Life’s not getting
any simpler…
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–
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A challenging environment

We’re living in an
increasingly complex
global and social
environment
–
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–

Foreign conflicts
and wars
Health pandemics
Climate change
Political relations
between countries
Social unrest and
division in society
Terrorist attacks
Base: Total sample Australia (n=1,000) June data
Resulting in a protracted state of anxiety
–
–
–
62%
54%
54%
51%
42%
31%
Q. How concerned
are you about the
following areas?
Concern about macro
environmental factors
(% 5 - 7 concerned)

Base: Total sample Australia (n=1,000) June data
Resulting in a protracted state of anxiety
–
–
–
Stay the same
Worsen Improve
Q. For each of these
areas, do you expect
the situation to improve,
stay the same, or
worsen in the next
six months?
Outlook in next
six months
Foreign conflicts
and wars
Health pandemics
Climate change
Political relations
between countries
Social unrest and
division in society
Terrorist attacks
49%
26%
40%
40%
30%
17%
41%
56%
52%
50%
61%
75%
10%
18%
9%
10%
9%
8%

Cost of living
Finances
Health
Lifestyle
Employment and
education
77%
56%
55%
49%
32%
Base: Total Sample – Australia (n=1,000) | Employed Australians (n=546) June data
The cost of living dominates
our immediate concerns
–
–
–
Concerns for the year
ahead (extremely /
very concerned %)
60%
59%
54%
43%
37%
36%
36%
35%
33%
33%
31%
26%
25%
24%
24%
24%
23%
20%
20%
19%
Increasing cost of petrol / fuel
Increasing cost of groceries and other household essentials
Increasing cost of electricity, gas and water
Healthcare costs are too high
The ability to fund my retirement
Not being able to enjoy life to the fullest
Access to quality healthcare when I need it
Government funding not covering enough of my healthcare needs
My personal and / or household income
Having enough money to spend on things other than living expenses
My ability to buy a home
Increases to my personal and/or household income tax
My personal and/or household debt
Not being able to travel
Being separated from friends and family
The impact of increasing interest rates on my mortgage
My ability to pay the rent for a house / apartment
Losing income as a result of having to isolate
Finding a job
My job security
(27% of
employed
Australians)
Q. How concerned
are you about the
following issues
in relation to
your own personal
circumstances in
the year ahead?

As a consequence, Australians are tightening their belts
–
–
– Next four months
Will spend less Will spend more NET Change
Digital
Consumer electronics -24
Subscription video streaming services -15
Activities/services
Vacations / holidays -13
Gym memberships and fitness classes -23
Out-of-home recreational activities -24
Personal care services -21
Gifts for others and donations -25
Retail
Sporting and fitness equipment -24
Other big-ticket items -33
Clothing and footwear -25
Luxury items and other indulgences -47
Next four months
Will spend less Will spend more NET Change
Consumables
Fresh food +20
Frozen food +9
Canned, dried food +6
Tobacco -28
Snack foods -17
Alcoholic beverages -21
Non-alcoholic beverages -11
Beauty and cosmetics -29
Prepared meals
Take-out/delivery -31
Home
Grocery delivery services -10
Home improvement products and services -13
Household products and home hygiene +4
Personal care items -8
37%
25%
38%
40%
40%
33%
36%
38%
45%
36%
56%
13%
10%
25%
16%
16%
12%
11%
14%
13%
11%
9%
11%
11%
12%
41%
29%
33%
23%
39%
42%
28%
31%
12%
19%
31%
20%
18%
13%
13%
12%
12%
10%
11%
18%
17%
16%
12%
Analysis of the spend intentions of Australian consumers in the near and longer term illustrates the way consumers are pulling in different directions and the variance by category
Base: Purchase within category – Australia (variable base size) Q. How much, if at all, do you expect your household spend to change across the following categories in the next 3 – 4 months ? | June data

7% 53% 31% 10%
Very few feel ‘safe and secure’
–
–
–
Cautious
but coping
Safe and
secure
Worried and
wounded
Concerned and
cutting back
Q. Thinking about three
years from now, do you
feel that life will be…?
Outlook three years
from now: National

Base: Total sample Australia (n=1,000) Please rate on a scale of 1-7, where 1 = “Not at all concerned”
and 7 = “Extremely concerned”. June data
Despite everything, Australians remain
cautiously optimistic about the future
–
–
–
Q. Thinking about three
years from now, do you
feel that life will be…?
Outlook three years
from now: National
28%
28%
43%
Worse
than today
About
the same
Better
than today

It’s difficult to plan
in uncertainty
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–
–

Help your customers navigate
as best as you can
–
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Establish your brand’s role as
a trusted source of knowledge
–
–
–

Life
redefined
–
–
–

Partly enforced, partly by
choice, Australians have not only
changed the way they live, they’re
expecting to change it further
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Life redefined

Base: Variable base sizes excluding ‘N/A’ Australia (n=276 to n=989)
Q.Thinking about the following aspects of your life, to what extent do you think the experiences will become better or worse in the next three years?
The way we live will change for the better
–
–
–
Life redefined
51%
42%
41%
40%
40%
38%
38%
38%
37%
36%
36%
35%
35%
35%
34%
34%
33%
32%
32%
31%
31%
30%
35%
38%
42%
41%
42%
46%
40%
40%
44%
43%
40%
44%
46%
45%
46%
47%
44%
46%
45%
50%
46%
48%
12%
15%
14%
14%
14%
13%
17%
16%
15%
16%
17%
16%
15%
15%
15%
14%
16%
17%
17%
15%
17%
16%
2%
5%
3%
4%
4%
3%
5%
6%
3%
4%
7%
5%
4%
5%
5%
6%
7%
5%
5%
4%
6%
5%
Experience will change for the better (a little / a lot) Experience won’t change Will change, but neither for better nor worse Experience will change for the worse (a little / a lot)
The way I raise my children
The way I work
The way I exercise
The way I maintain my physical well-being
The way I maintain my mental well-being
The way I take care of my home
The way I plan for the future
The products I buy
The way I use technology
The way I study
The way I travel for vacations
My schedule / routines
The things I do to stay entertained
The way I shop for / prepare food
The way I maintain my physical appearance
The way I access medical care
The way I eat out
The way I socialize
The way I shop
The way I bank
The way I travel for work
The way I use transportation
Total – will change
in the future
65%
62%
58%
59%
58%
54%
60%
60%
56%
57%
60%
56%
58%
54%
55%
60%
56%
54%
55%
50%
54%
52%
The way life experiences will change in the next three years

*Base: Total sample – Australia (n=1,000) † Base: Employed Australians (n=537) ~ Base: Employed
Australians excluding those who do not have work from home situation applicable (n=494). June data
Where and how Australians work will continue to change
–
–
–
48%
58%
62%
of Australians will spend
more time in their local
area in future than they
did prior to the pandemic*
44%
of employed Australians
expect that in three years
from now, the way they
work will change†
of employed Australians
agree that working from home
gives them the flexibility to fit
non-work-related activities~
of Australians expect that they
will be living differently in the
longer-term*
Live closer to family /
friends than work
Plan to live in lower
density area
Living
differently
Working
differently
Life redefined

Base: Total Sample - Australia (n=1,021). February data
The importance of reaching them locally will increase
–
–
–
20%
43%
Will shop more at local,
small businesses
Changing brands
to support the
local economy /
local businesses
Life redefined

Your customers are more local,
more regional and more aligned
with community
–
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–
Life redefined

Family and home has become more
important, as we realise the value
of time spent away from ‘work’
Technology can help you
be present where they are
–
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–
Life redefined

The choices
Australians make
are increasingly
values-driven
–
–
–

The choices Australians make are increasingly values-driven
As Australians re-assed how they live
and work, many came to a realisation
In a re-alignment of values, there
is a greater focus on the ‘how’
and on our impact on society
and the environment
–
–
–

Base: Total Sample - Australia (n=1,021). February data
How Australians see the world and their lives has changed
–
–
–
48%
My values and the
way I look at life
have changed over
the last year
46%
I like the way some aspects of
my life have changed and so I
don’t want to go back to living
exactly the same way I did
prior to the pandemic
65%
I’m thinking a lot about
the future and what’s
important to me
55%
I will reappraise
how I spend my
time on the things
I value most

Gen Z: n=65, Millennial: n=324, Gen X: n=253, Baby boomer: n=300, Traditionalist: n=58
▲▼ Denotes a result significantly higher or lower than other generations.
Some have changed more than others
–
–
–
48% My values and the way I look at life
have changed over the last year
65% I’m thinking a lot about the future
and what’s important to me
55% I will reappraise how I spend my
time on the things I value most
46%
I like the way some aspects of my life
have changed and so I don’t want to
go back to living exactly the same
way I did prior to the pandemic
56% 57%▲
48%
32%q 33%
45%
62%▲ 56%
48%q
53%
Gen Z Millenial Gen X Baby
boomer
Traditionalist
67% 73%▲ 68%
57%q
48%q
55% 60%▲
50%
36%▼ 31%▼

Sustainability has
become a core values-
based driver
–
–
–

19%
June data
Australians are increasingly taking action on sustainability
–
–
–
Sustainability
inert
Sustainability
passive
Sustainability
moderate
Sustainability
active
Highly engaged and active
around creating a sustainable
future by purchasing and
behaving sustainably.
Prepared to invest time and money
to make more sustainable living a reality.
Taking action towards
sustainability, however nothing
that requires a high level of
time or cost investment.
Sustainability is, although at a lower
level, a priority for this group.
Will contribute to
sustainability if it doesn’t
cost anything, or if
it saves money.
Will comply with government or
corporate interventions like recycling
or using re-usable shopping bags.
Doing very little
to contribute to a
sustainable future.
Sustainability is a low
priority and doesn’t factor
into purchase decisions.
14% 20%
47%

June data
Sustainability is a priority
–
–
–
27%
40%
Purchasing and behaving
sustainably is a guiding
principle in my everyday life
Sustainability is a
low priority for me

*June 2022 data. †May 2021 data
Australians are willing to pay more to access
sustainable products
–
–
–
36%
35%
I pay more for products if
I believe they are produced
in a sustainable way
I pay more for products
that have less of an impact
on the environment over
their lifespan
Sustainable production*
Impact over time†

Business has a responsibility for sustainability
–
–
–
Base: Total sample – Australia (n=1,000) | Q. To what extent do you agree with each of the following statements? June data *February data
67%
agree
Businesses must ensure that
all their suppliers meet high
standards in regards to social
and environmental practices
67%
agree
Companies / organisations need
to act as leaders in driving positive
social and environmental outcomes
60%
agree
I believe there is a responsibility
on businesses to provide me
with sustainable choices in the
products and services I buy*

Expectations of your brands
–
–
–
68%
Brands must behave
ethically and in line
with community
expectations
67%
Brands must be
transparent about the
social impact of producing
their products and services
66%
Brands must be
transparent about the
environmental impacts of
producing their products
and services
66%
Brands have a
responsibility to
invest in the sustainable
production of their
products and services

All brands will be increasingly
judged on how they impact on
society and the environment.
Those with purpose will thrive
–
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–

Key
takeaways
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–
–

1
Relentless disruption and
anxiety for the majority
of Australians has led to
a re-evaluation of how
they live and work
–
–
–
Key takeaways

2
Values have re-aligned
to focus on home, family
and well-being
–
–
–
Key takeaways

3
This has extended to
sustainability, which
increasingly drives
purchase decisions
–
–
–
Key takeaways

4
Brands that live to their
purpose and leverage
technology to be present
and transparent will thrive
–
–
–
Key takeaways

Thank you
–
–
–
Email me: nigel.p.roberts@au.ey.com

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