Do you have to leave New Zealand to get ahead?

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1. 0:06Speaker 1: Kia ora, I'm Chelsea Daniels and this is The Front Page, a daily podcast presented by the New Zealand Herald. It'll
2. 0:16Speaker 1: come as no surprise that new data has revealed more Kiwis are struggling with the cost of living. The latest New Zealand Consumer Lifestyles Survey from the University of Otago
3. 0:26Speaker 1: shows just over half of respondents went without something to buy essentials. More alarming though, 48% believe they need to
4. 0:35Speaker 1: leave the country to get ahead, up from 28% in 2020.
5. 0:40Speaker 1: Today on the front page, lead researcher, Associate Professor Leah Watkins is with us to break down the numbers. So Leah,
6. 0:49Speaker 1: what stands out to you most about how much consumer behaviour has changed between surveys?
7. 0:56Speaker 2: Certainly in this wave, the big change has been the cost of living crisis and the impact that's having, not just on what people buy, but also their optimism about
8. 1:06Speaker 2: the future and that more holistic view of how they're experiencing life in New Zealand.
9. 1:14Speaker 3: But within that, what we're seeing is still that diversity.
10. 1:18Speaker 3: So the six.
11. 1:19Speaker 2: Segments we capture include Although they're experiencing the same economic situation, they're responding to that very differently and obviously have different
12. 1:29Speaker 2: outlooks and have different values that are driving their consumption behaviour.
13. 1:34Speaker 1: What are the six segments that you capture? Because they've got some quite apt names, I suppose.
14. 1:39Speaker 2: So we have, for example, we have the contented traditionalists, which is a segment of older New Zealanders, financially secure, optimistic.
15. 1:51Speaker 2: you know, feel that the country's going in the right direction and are very, very intentional with their consumption. So they don't tend to take on debt, that kind of thing.
16. 2:02Speaker 2: And you can compare them with, say, the– The aspirational materialists, which are a younger segment who are upwardly mobile, who
17. 2:13Speaker 2: see their consumption as really important to their sense of identity, but they're also really highly engaged in.
18. 2:21Speaker 3: Political and social issues. So they are putting a real.
19. 2:25Speaker 2: Emphasis on businesses' responsibility for some of the issues.
20. 2:29Speaker 3: That they're seeing.
21. 2:31Speaker 2: And then, for example, we have the financial strugglers, which are is the segment that is defined by their economic insecurity.
22. 2:40Speaker 3: And that's the segment that's grown.
23. 2:42Speaker 2: Significantly from the last wave, which was 2020, until this wave.
24. 2:48Speaker 1: How much has that segment grown?
25. 2:50Speaker 2: So it's grown from about 17% in 2020 to 28% in this survey.
26. 2:56Speaker 3: So that's significant.
27. 2:58Speaker 2: And I think what's changed is that you would say more middle-income New Zealanders are falling into that segment. So,
28. 3:07Speaker 2: you know, they have high levels of education. They have sort of median income levels. They own their own homes.
29. 3:17Speaker 2: They're in full-time employment. However, their consumer attitudes and behaviours are still being largely influenced by their sense that they can't consume in the way that they would like to
30. 3:29Speaker 2: and that they are, you know, not overly optimistic. about their own situation or that improving.
31. 3:36Speaker 1: When it comes to those consumer behaviours, what's something that jumps out at you the most?
32. 3:42Speaker 2: I think this wave, it is that we are seeing that impact of the financial constraints people are under.
33. 3:52Speaker 3: However, their values still matter to them.
34. 3:55Speaker 2: So we are seeing that those concerns around the environment, around sustainability, around equality, And so I think while the
35. 4:04Speaker 2: economic situation is constraining people's ability to enact their values, those values are.
36. 4:10Speaker 3: Still absolutely there.
37. 4:13Speaker 2: And in many cases, there is an overlap between behaviours that are both frugal but environmentally responsible. So we certainly
38. 4:22Speaker 2: were seeing you know, attitudes towards durability, people wanting to make the most of their money, people investing in things
39. 4:32Speaker 2: that they knew would last. So those values are just being expressed perhaps in a slightly different way.
40. 4:38Speaker 1: Yeah, I thought it was interesting. So 85% of respondents say taking good care of possessions can save money in the long run, while 84% see little sense in buying
41. 4:49Speaker 1: something new when an existing item could be reused. Are we just becoming a more frugal society?
42. 4:57Speaker 2: Yes, I think that is what we've shown over time.
43. 5:00Speaker 2: So one of the measures that is in there is a measure of materialism. So the items that you've mentioned there come from that scale. And over time, we have
44. 5:08Speaker 2: seen that come down. So people are becoming more conscious, I think, of their materialism. own consumption behaviour and the impacts that has on the environment, for one thing, and
45. 5:20Speaker 2: that we are thinking carefully, more carefully, about where our products come from and how we can make the most of them. And as I said, that's in a sense
46. 5:30Speaker 2: being reinforced by the economic environment that people are returning maybe to more frugal ways of living.
47. 5:40Speaker 1: And quite a few respondents actually saying that they prefer New Zealand-owned.
48. 5:44Speaker 2: Yes, yes, there's certainly people are saying that they want to support local businesses.
49. 5:50Speaker 3: They also are placing responsibility on business.
50. 5:53Speaker 2: So, you know, there are questions or answers coming through around the idea that, you know, business should not only be responsible to its shareholders, but that it has a
51. 6:03Speaker 2: wider social responsibility.
52. 6:06Speaker 3: So I think both the expectations of business are growing.
53. 6:11Speaker 2: But yeah, people really do appreciate and trust those businesses that are local or that have demonstrated their commitment to
54. 6:20Speaker 2: either local communities or to New Zealand.
55. 6:23Speaker 1: I don't know if you're as chronically online as I am, but I have noticed a shift away from influencers and celebrity endorsements. And that's something that I found interesting in
56. 6:32Speaker 1: the survey as well. So 65% of respondents say influencers have limited influence on their consumption decisions. Does that challenge
57. 6:42Speaker 1: the way businesses are perhaps going to be spending their advertising budgets going forward?
58. 6:47Speaker 2: I think it is a finding that business can take something from. And yes, that is around that personal trust and the recommendations of friends and family actually came out
59. 6:59Speaker 2: as the most important decision-making.
60. 7:01Speaker 3: Factor for people.
61. 7:03Speaker 1: So.
62. 7:04Speaker 2: Yes, there is a lot of digital media. Certainly people's digital engagement was, as we'd expect, very high, whereas their
63. 7:12Speaker 2: engagement with traditional media had dropped since 2020. However, that doesn't mean that they necessarily trust that digital communication. So
64. 7:23Speaker 2: I do think that that is something business can take on board. Just the importance of that trust and that authenticity in communication is So it's not to say that
65. 7:33Speaker 2: people will automatically distrust digital communication, but I think it is very much about how companies are communicating and how
66. 7:42Speaker 2: consistent that communication is with their activities and their product and everything else.
67. 7:49Speaker 1: I also found it quite heartening that more than half of respondents say that AI assistants have little or no
68. 7:57Speaker 1: influence on their purchasing decisions. But given how quickly AI is actually developing and how it's creeping into our everyday lives,
69. 8:06Speaker 1: so to speak, do you think that that will change significantly over the next few years?
70. 8:11Speaker 3: I do.
71. 8:13Speaker 2: I think at the moment, yes, people are reporting it's not having too much influence and people were also reporting that they don't feel they can trust it or they
72. 8:24Speaker 2: don't feel confident that they can identify when something is AI-generated.
73. 8:30Speaker 3: But certainly as that trust grows, I.
74. 8:33Speaker 2: Do think we will see more and more, you know, personalized recommendations, algorithmic targeting and pricing. Certainly, you can only
75. 8:43Speaker 2: see that the role of AI will continue to really change not only our decision-making processes, but also how, in
76. 8:53Speaker 2: the end, how we will consume data. So I do think that certainly, that'll be really interesting to see in another five years.
77. 9:02Speaker 1: Yeah, absolutely. And I mean, when it comes to seeing those trajectories and how people have been responding, because this is the eighth one, right? Could some of these changes
78. 9:11Speaker 1: become permanent or, you know, even when this cost of living situation lightens?
79. 9:18Speaker 2: Yeah, I mean, 75% of people said that they felt the, the economic situation wasn't going to improve. So, you know,
80. 9:28Speaker 2: people are not feeling overly optimistic, but hopefully that's not the case. However, you might expect that we would see
81. 9:35Speaker 2: some of those changes that are happening around reuse, around frugality, around the adoption of hybrid vehicles and solar panels, which
82. 9:46Speaker 2: we've seen increase since 2020. You could expect some of those behaviours to Yeah, to persist, I think.
83. 9:59Speaker 1: And I found this kind of alarming, but something that we, I mean, the world's worst kept secret, 48% believe that they need to leave the country to get ahead. And
84. 10:08Speaker 1: that's up from 28% in 2020. That's a pretty stark difference between, you know, within five years. Is that something that stuck out to you as being a bit of a worry?
85. 10:19Speaker 3: It definitely was.
86. 10:20Speaker 2: You know, it does reflect something about particularly how our young people are feeling. However, again, I think what's interesting to highlight is that there are different experiences and there
87. 10:31Speaker 2: are sort of two segments that represent the youth. And one of them is the aspirational materialists. They are feeling optimistic.
88. 10:39Speaker 2: They have high levels of well-being, high levels of engagement.
89. 10:44Speaker 2: but you also had a segment which we called the disengaged, who also tend to be young but are experiencing the
90. 10:52Speaker 2: financial pressures in a very different way and are far less optimistic about their situation currently. And so I think
91. 11:03Speaker 2: for those people, that sort of thought of, yes, I need to go.
92. 11:08Speaker 3: Overseas to get ahead has increased. I think another thing to.
93. 11:13Speaker 2: point out in the comparisons we're making with 2020 is of course that was a very unique time because that survey was conducted during lockdown during COVID so I think
94. 11:23Speaker 2: there were really high levels of social connection and different pressures than we're seeing now and that may have played into some of the differences we're seeing.
95. 11:34Speaker 1: So we've already spoken a little bit about advertising budgets.
96. 11:38Speaker 1: What can businesses and I suppose policymakers as well take away from the results of this survey?
97. 11:43Speaker 2: I think for business, it is around, you know, the importance of trust and personal recommendation and authenticity. Also around
98. 11:53Speaker 2: the changing nature of communication and how people are engaging with digital media. and also that what has been a
99. 12:02Speaker 2: consistent change which is the the sense of responsibility that people place on business um to to be a good actor to be contributing in positive ways and that's what
100. 12:14Speaker 2: builds that that trust um and that personal sense um of you know loyalty to a brand um For policymakers,
101. 12:24Speaker 2: I think, you know, the themes that are coming through are around affordability, inequality was certainly something and confidence in
102. 12:32Speaker 2: the future, as you said, you know, what's ahead, particularly for young people. So they would be the things, I guess, for policymakers that would be important to think about.
103. 12:43Speaker 1: Well, it's interesting that this comes out during an election cycle as well. And I have noticed that the party is kind of scrambling to try and get young Kiwis to stay in the country. So maybe this is just...
104. 12:55Speaker 1: further evidence to suggest that they might be on the right track.
105. 12:59Speaker 3: Yeah.
106. 13:01Speaker 2: We repeat the survey every five years, so it's not done around election cycles. But yes, I think it is interesting that this particular report is reflecting a lot of
107. 13:11Speaker 2: the things we're seeing in terms of the political debates and just in terms of those different experiences and that
108. 13:19Speaker 2: people are perhaps no longer interested traditionally we had seen two larger segments that you could have maybe more aligned with the left and the right, but now what we're
109. 13:29Speaker 2: seeing is a greater spread, a greater variety of values, of concerns, of experiences.
110. 13:36Speaker 1: Thanks for joining us, Leah.
111. 13:37Speaker 3: Yeah, thank you.
112. 13:42Speaker 1: That's it for this episode of The Front Page. You can read more about today's stories and extensive news coverage
113. 13:49Speaker 1: at nzherald.co.nz. The Front Page is hosted and produced by me, Chelsea Daniels. Kane Dickey is our studio operator, Richard Martin,
114. 13:59Speaker 1: our producer and editor, and our executive producer is Jane Yee.
115. 14:04Speaker 1: Follow The Front Page on the iHeart app or wherever you get your podcasts and join us next time for another look beyond the headlines.