Consumers’ behaviours, technological preferences and expectations continue to evolve and re-align within cost of living increases and the current macroeconomic climate: PwC Consumer Insights Survey

Jakarta, 14 April 2023 - As 2023 progresses, significant internal and external factors are putting more pressure on customers and businesses, creating tension that could block up businesses and limit customer experiences. Consumers are altering their purchasing patterns and engaging in cost-cutting behaviours as a result of concerns about inflation and the gloomy macroeconomic environment. 

Global Consumers Insights Pulse Survey 5 reveals that, as the cost of living crisis continues to rise both globally and within Indonesia, consumers are increasingly concerned about their personal financial situations. Fifty percent of global consumers are either “extremely concerned” or “very concerned” about their personal financial situations, while in Indonesia the number is higher (74%). This has resulted in consumers drastically adjusting their spending behaviours, with the majority (69%) of global consumers “holding back” on non-essential spending. While the percentage of Indonesian consumers holding back is lower, at 63%, this still represents three in five Indonesian consumers.  

From the survey, we also captured the views of Indonesian consumers to deeply understand about trends in their behaviours and shopping plans. The rising cost of living is deflating sentiment, with most Indonesian consumers intending to cut back on their purchases in the coming six months across all retail sectors, with the largest cuts anticipated in the fashion, consumer electronics and luxury goods sectors.  

Consumers experiences of in-store vs online shopping

There is stability seen in Indonesian consumer behaviour where the majority intend to maintain their current shopping habits, going back to the pre-COVID-19 level, and consumers are returning to in-store shopping frequently. Supply chain disruptions continue to affect shopping behaviour.  More than a third of Indonesian consumers cite the high costs of online delivery and unacceptable delivery time as a “pull” factor; they also want to “touch and feel” the product in-store. 

Although consumers are going back to in-store shopping, larger queues and busier store locations (48%), as well as a reduced product range (43%), seem to be having the greatest impact on consumers’ purchasing experience in-store. It is incumbent on market participants to accommodate consumers in both physical and digital spaces—and to meet their changing expectations. As is evident throughout the survey, it is not an either-or proposition. Increasingly, consumers are saying that they want the physical shopping experience to be enhanced, facilitated or mediated by digital technologies: call it phygital.

Peter Hohtoulas, PwC Indonesia Tax & Legal Services Advisor, added, “Indonesian consumers remain most likely to shop across multiple channels and use comparison sites to check product availability. They value knowledgeable and helpful sales associates and are also seeking the ability to integrate technology with the in-store experience.”

Early stage adoption of the Metaverse and the importance of data privacy

Adoption of the Metaverse as a shopping channel is still in its early stages and is currently under-utilised in Indonesia (and globally). Nearly one in four Indonesian consumers have used the Metaverse in the last six months for entertainment, virtual experiences or purchasing products.  The use of the Metaverse will continue to evolve especially as enabling technologies also evolve, and industry participants will need to assess its use in their organisations.  

All the while, as online shopping continues to grow in volume, consumers are increasingly wary of data privacy. In Indonesia, a third of consumers say that they are extremely or very concerned when interacting with social media companies and media. Although only 26% say they are extremely or very concerned when interacting with consumer companies, concern remains, and breaches of data privacy can have a significant impact. As a result, more than half of consumers (67%) say that they do not share more personal data than they have to, and 43% manage or reject options when presented with data privacy terms.