AS THE current economic situation continues to be uncertain, a study done by PHD Malaysia and Vase.ai revealed that consumers are not so optimistic when it comes to their personal finances for next year.

The study pointed out that while consumers are relatively positive towards next year’s economy, 57% of the consumers expressed some reservation towards their personal finances, in which they see either not to improve or not manageable.

“They are likely to bring forward their cautionary spending into 2020. At the outset, 2020 is looking better than what consumers experienced in 2019. Cost of living, Malaysia’s financial position, affordable housing and job security are the four most critical areas affecting consumer sentiment.

“About 51% of consumers are hopeful that 2020 will be better than 2019, while 29% are expecting a status quo,” it said.

Additionally, the research study also validates a common spending trait during economic uncertainty.

For instance, consumers will continue to spend on food, household products and children expenses, but defer spending on discretionary products like luxury goods, overseas holidays and leisure outings.

Hence, given the cautious spending outlook in 2020, brands and marketers are urged to drive top-of-mind awareness and position their brand distinctively in the mind of the consumers.

“As consumers seek more value for money, they will be drawn to promotions and deals, especially across e-commerce and e-wallet platforms. Marketers need to have solutions across these platforms to drive high value.

“While doing so, marketers can leverage the platforms’ digital advantage and optimise data technology to bridge the consumer journey from awareness to conversion,” the study said.

The latest Consumer Sentiment Index for the third quarter of 2019 (3Q19) from Malaysia Institute of Economy Research (MIER) saw the lowest index of 84 since 4Q17.

Therefore, the study suggested that it is vital for marketers to be able to understand these shifts in consumer sentiment if they are to find new ways to build relationships with their consumers while changing the way they think about their own categories.

“It was 20 years ago that the term challenger brand was first coined, but the narrative around challenger thinking is undergoing a transformation, with the new wave of challengers changing the way categories around us behave and operate,” it added.

Currently, Malaysia’s economy is estimated to grow at 4.8% next year, marginally lifted from 4.7% in 2019, according to the Ministry of Finance, while the ministry also forecast that the unemployment rate will remain at 3.3% and inflation is estimated to be 2%.

PHD Malaysia is a 12-year-old thought leader in the industry and comprises a team of communication planners who challenge conventions and re-imagine communication with an obsessive focus on growing brands.

In collaboration with the consumer intelligence platform, Vase. ai, the study was conducted by interviewing over 1,000 consumers in Malaysia.

The objective of the study was to help advertisers and marketers who are looking to challenge the conventions and to better plan for their brands.

News Source: TheMalaysianReserve, 12 Dec 2019.

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