While the pandemic has led to an acceleration in online spending globally, the Commonwealth Bank found that almost half of Australian consumers directed unspent money towards either savings or investments in 2020.
As per the recent Consumer Insights Report, over 40 per cent of consumers cut their overall spending levels during the pandemic, 39 per cent didn’t see any change, and just 19 per cent increased their spending.
“A similar proportion of consumers, most notably from Gen X and Gen Y, channelled the spare money towards paying down debt. Just 13 per cent redirected the funds into other areas of discretionary spending, again driven by Gen Z and Gen Y. Across the board, Baby Boomers and Pre-Boomers were the generations least likely to have redirected their otherwise idle money,” the report said.
Forty-four per cent of those who spent less during the pandemic expect to continue to do so during 2021.
The Consumer Insights Report also noted an uptick in the use of mobile wallets like Apple Pay and Google Pay relative to the pre-pandemic.
“Thirty-nine per cent of those who use a mobile wallet such as Apple Pay report doing so more frequently,” the report said.
In addition to tightening their belts and leaving their wallets at home, the majority of consumers also chose to spend through Australian-based retailers, both online and via retail. The report found that a majority of consumers in eight of the 10 retail categories covered said that it has become more important to them to have the option to buy products made in Australia since the pandemic began.
According to Commonwealth Bank’s executive manager for consumer and diversified industries, Jerry Macey, “We saw a seismic shift in how people spent their time, and this has led them to think about what is most important to them.”
“Consumers adopted a more local focus, and whether that’s on Australian-made products, or shopping in their local area, we expect this to remain a priority,” Mr Macey said.
To find out more, or to review your current loans, get in touch with a Centra Money finance specialist for a confidential and obligation-free appointment at (08) 8211 7180 or info@centramoney.com.au
Fergus Halliday
25 May 2021 – nestegg.com.au