Cost of Living Crisis Drives Australians into Social Isolation, Reshapes Consumer Habits: M&C Saatchi Report
Australians are increasingly facing social isolation as the cost of living crisis reshapes consumer behaviours and financial priorities.
The M&C Saatchi Group report, based on proprietary research conducted over two years, shows many are cutting back on discretionary spending, including social activities, as they struggle to manage rising costs. This, in turn, is leading to a troubling rise in disconnection and emotional strain, especially among younger generations, and with Gen Z / Millennials sacrificing social lives to work more.
Key Findings:
- 70% of Australians believe the cost of living is reducing the amount of time people spend with others.
- Over 50% of those cutting back on socialising say they can no longer afford to socialise as much, contributing to a significant increase in feelings of isolation.
- Of those cutting back, 6 in 10 report feeling socially isolated—equating to 12 million Australians affected by this growing issue.
- Gen Z and Millennials are the hardest hit, scaling back on paid activities and sacrificing social occasions to work more in order to make ends meet.
The independent shopper is here to stay
The report highlights the new behavioural norm of the independent shopper, with Australians continuing to become more self-reliant. Consumers are prioritising value, focusing on cheaper brands, DIY solutions, and bulk buying. In particular:
- 81% of consumers are open to trying new, more affordable brands, reflecting a shift in loyalty.
- The DIY trend is growing, with Australians cooking more at home and cutting back on beauty treatments as a way to save money.
Opportunities for Brands
As Australians navigate these challenges, brands have an opportunity to step in and offer meaningful support. The report outlines several key areas where brands can make an impact:
- Foster Connections: As social isolation rises, brands can create low-cost or free social opportunities to help people reconnect with friends and family.
- Deliver DIY with convenience: Brands can support time poor customers, with simple and easy ways to make and create at home. Whether that's through ideas, DiY packages and partnerships, providing products in bulk, or quality storage solutions.
- Empathy and Empowerment: Brands that offer financial literacy resources, stress management tools, and practical solutions to everyday challenges will foster deeper trust and loyalty.
Smaller, DIY Christmas Ahead
Looking ahead, Australians are preparing for a more frugal Christmas. With two-thirds of Australians lacking confidence in their ability to buy gifts, many are turning to online marketplaces like Temu and Amazon for cheaper options. DIY celebrations, fewer decorations, and smaller gatherings will likely define the festive season.
Amy Kousis, strategy director at M&C Saatchi Group, explained, "Persistent economic pressure is leading to ingrained behaviours and new consumer norms. Business strategies need to adapt for brands to stay connected and relevant."
The Cost of Living Report offers brands a detailed look at the evolving consumer landscape and provides actionable insights on how to connect with customers during these challenging times.
