This article was first published on The Star
Consumers are likely to change their spending habits with the rising cost of living and the implementation of the goods and services tax, according to a survey.
“Inflation has always been part of our lives. Consumers will not stop spending, but they will change how they spend,” said PHD Media general manager Jimmy Lim.
The “Shrinking Wallet” study conducted by PHD Media in conjunction with Epinion and Media Prima collected responses from 500 online consumers aged 15 and above in October.
Of those surveyed, 92% said they were worried about their financial status over the past year, 53% started to practise financial prudence and 42% scrutinise cost per unit to get the most out of their money.
“Rising prices are the new normal, and the change in purchasing patterns will persist until consumers feel they have regained their purchasing power,” said Omnicom Media Group research manager Cassandra Ng.
As such, there has been a shift among consumers from passively refraining from spending to actively deciding to cut certain things out of their consumption patterns, making choices that maximise value, generating more income and stretching their budget, said Cassandra.
Marketers should introduce reward programmes to maintain brand loyalty, she said.
“They can also change price perception to give consumers more value for money, for example by giving consumers 20% more of a product for the same price and upsizing their packaging to reflect that.”