The two speed economy and what that means for your marketing strategy
As you have most likely heard, the Australian economy like most other economies around the world is facing a recession, due to the Coronavirus pandemic. With the newest restrictions in Victoria the latest treasury statistics say that this could affect the Australian economy by $10 billion.
As a Marketing Manager it’s crucial now more than ever to keep up with the changing needs and help the business to adapt constantly. The key is to pivot your strategies and keep moving with your customer. It is vital to understand their head space and anticipate the new behaviour patterns.
Why is there a two speed economy?
A two speed economy happens when certain parts of the economy are able to bounce back to recover from issues like consumer confidence and stagnated cash flow. In Australia due to the reinstatement of restrictions in Melbourne and Sydney the economy is stagnating. However, the other major areas Brisbane, Perth and Adelaide are building back up their economic outputs as restrictions ease.
As marketers we notice this when we are working with certain clients. We can also see how the restrictions are affecting consumers within each of the major cities and regions.
Ola the ride sharing company, says that in Australia demand for its services has returned to about 90 per cent of pre-COVID-19 levels in Brisbane, Perth and Adelaide. However, customers in Sydney have become more wary since Melbourne went back into lockdown from July 8.
Location data published by Google, shows how Australian mobility has changed over the last few months.
In May 2020 mobility trends for Australia show that people heading to work have decreased by 18 per cent.
So what does this mean for consumer behaviour?
Australians have made the most of their time cooped up at home, picking up the tools and shopping online. The shift to ecommerce purchases and online payments keeps intensifying, and we’ve seen the transformation of retail accelerate over the past three months.
What we don’t know yet is whether some of the hardest hit industries like the arts and in person events will ever fully recover. We’ve seen trends in fitness and beauty that show that adapted equivalents may take the place of gyms and salons. It will be interesting to see the new normal that Australians embrace after this pandemic.
It is important to note that although these new consumer behaviours are different right now we will not know the long term effects until after restrictions have eased across the entire country.
It is difficult to navigate a two speed economy, unlike a normal economy consumer behaviour is split. A simple way to work around this split is to segment your audiences by restriction stage. We have the upper hand this time, as we have already been through one lockdown we can anticipate how buying behaviour shifts in and out of restrictions. It is important to look at your data from April and May and analyse the shifts in your consumer behaviour. That could mean reducing spend for Victoria and NSW but increasing it in other locations like Brisbane and Perth. Times are changing, consumer behaviour is shifting. It is especially important now that we ride this wave and ensure that we are still meeting our consumers needs.