Establishing purchase intentions: to buy, or not to buy?
Across all of the groups, there are consumers who are rethinking their course of action.
The data from the first wave of Worldpanel’s Global Consumer Confidence Tracker survey showed that consumers from all segments who planned to make a purchase within the next six months were aiming to modify their behaviour in some way.
Amongst those Feeling the Pinch in October 2022, 36% said they intended to either delay or spend less on a purchase of a smartphone, and 5% intended to cancel their plans to buy altogether. For video streaming services, 33% intended to delay a purchase or spend less, and 13% to cancel.
For the Cautiously Coping cohort, 27% intended to delay or spend less on a smartphone, and 2% to cancel. The figures were 29% and 9% respectively for video streaming.
Those who were Safely Secure had also reconsidered their plans, with 14% delaying or spending less on the purchase of a smartphone and 2% cancelling. The percentages were higher for video streaming, with 22% postponing or spending less, and 9% intending to cancel.
Getting a read on consumers’ intentions to buy is exceptionally valuable. Even more important, however, is the ability to uncover what they subsequently go on to do.
Who intended to alter their plans, but then didn’t follow through? Who planned to purchase, but then changed their mind? The data on intentions indicates that video streaming is most at risk of being cut from the consumer tech shopping list. Has this manifested in actual behaviour?
Netflix is number one in France, where services are attempting to avoid cancellations by providing strong localised and French language content. Australian consumers also favour Netflix. Here, we’re expecting a decrease in spending on ‘incremental services’ that are not viewed as essential.
Higher cancellation rates are expected in Germany, as streaming becomes less of a ‘habit’: households are not as engaged in the category as other European markets. In the UK, where the average number of subscriptions is still only 2.5 per household, cash-strapped consumers are expected to revert back to traditional forms of viewing.
US households’ portfolios are heavily stacked, with an average of almost six subscriptions. We’re likely to see consumers shift between different tiers of service rather than cancelling outright. Households in Spain, on the other hand, are trimming their portfolios. As a result, we predict intense competition for loyalty between the top five players: Netflix, Prime Video, Disney+, HBO Max and Movistar+.
In the VoD market, value is more important than ever. How services demonstrate value to their subscribers is critical – and we’re likely to see tactical changes in advertising and communications to reflect this, for both existing subscribers and potential new ones. Across Europe there’s an increased demand for aggregation of subscriptions – not only to save money, but also for convenience of access. This presents an opportunity for providers to prove the value they can bring.
