'The New Consumer Landscape in Australia - 2004'

The report, resulting from 5 years of research with more than 50,000 respondents each year, provides new and startling insights into new powerhouse consumers - NEOs - who read more, know more, earn more, are more ethical, demand more and spend more than anyone else in Australia.

The report covers 100 different types of consumption under key categories including demographics lifestyle, travel & tourism, media, food & beverage, elephony, directories, energy, retail, financial services and automotive.

A Geo-Demographic Snapshot

To qualify as a Neo-Consumer, or NEO, an individual must have both:

• - High levels of past, present and intended spending, and
  - Sustainable differences in the underlying attitudes and values that motivate high spending.

Society is split evenly in two.
Half exhibit low-spending, low-discretionary choice consumption behaviour and traditional social attitudes. Not surprisingly, they are known as Traditional Consumers or Traditionals.

They are price-sensitive and more interested in a deal than in quality. As a consequence they only account for only 23% of discretionary spending.

The other half consists of high-spending, high-margin, high-discretionary choice NEOs and another group known as Evolvers - so called because they exhibit a number of NEO characteristics and spend more than Traditionals and, as a consequence, are likely to evolve toward Neo behaviour over time.

Between them, NEOs and Evolvers account for 77% of discretionary spending.

There are 3.8 million NEOs in Australia and 53.4 million in the USA. This large number ensures the typology is both statistically strong and internationally relevant.

NEOs are metropolitan dwellers. More of them live in inner Melbourne and Sydney than anywhere else in Australia. Almost half of all the people who live in those urban locations are NEOs, and when compared to their Traditional Consumer cousins, NEOs are 3 times more likely to live in inner Sydney & Melbourne.

45% of NEOs are women and 55 % are men.

While NEOs range over all age groups, they tend to be younger and, conversely, Traditionals tend to be older. NEOs exceed the national average in every profile between age 20 and age 50, while Traditionals exceed the national average in every profile above age 50. Specifically, NEOs are most highly represented in the 25 - 39 age segments.

Half of all Australians with a university degree are NEOs and when compared with Traditionals, four times more NEOs have degrees.

They are most likely to be in professional or management occupations and earn significantly more than the rest of society. Specifically, they dominate every income category above $45,000pa and are 5 times more likely than the rest of society to earn in excess of $100,000pa.

More importantly, they earn more because they're NEOs...they are not NEOs because they earn more (income was not used in identifying who was a NEO and who wasn't).

And they do spend more! And spend more frequently than anyone else. NEOs dominate by more than 2:1 the top third of discretionary spending in the Australian economy, while at the other end of the scale, Traditionals dominate by more than 10:1 the bottom third of spending.

NEOs are also more valuable than ABs, the top socio-economic quintile. Almost half (45%) of NEOs are ABs while only 20% of Australians and 9% of Traditionals are ABs.

Taking ABs as a whole, more than half (54%) are NEOs. That's the good news for socio-economics as a conduit to reach high-value customers. The bad news, however, is that 23% of ABs are low-spending Traditionals and 23% are Evolvers. As a consequence at least a quarter of advertising spend is wasted when directed at ABs as the ideal high-earning, high-spending target segment.

That is of immediate relevance to the economically significant media sector... NEOs dominate broadcast media and are significant in press, outranking ABs in all four key media segments as well as in the increasingly valuable Internet sector.

The Background

In 2001, former KPMG directors, Ross Honeywill and Verity Byth established the Centre for Customer Strategy and wrote the successful business book,

'I-Cons: The Essential Guide to Winning and Keeping High-Value Customers'

published by Random House in Australia (September 2001) and by Citic in Mainland China (May 2004).1

In 2001 Honeywill & Byth formed an alliance partnership with Roy Morgan Research to access a stable database with global reach.

With Roy Morgan Research, Honeywill & Byth used a directed, multi-dimensional approach to:

• Identify total discretionary spending by quartiles
• Identify the significant characteristics specific to top & bottom quartile
• Select characteristics with highest discrimination between the two quartiles that matched the previously-observed consumer characteristics
• Select and test final definition set
— Verify that the final set of variables are individually valid and meaningful when used in combination
— Create frequency distributions (deciles) for all responses
• Allocate an aggregated score to each individual based on their combined response to all questions in each category (spending and attitudes)

The result was the Neo-Typology, a unique measure of high-yield consumption. This new consumer metric has been designed, tested and applied to data on Roy Morgan Single Source (55,000 respondents a year) in Australia, New Zealand, the USA and the UK.

MORE INFORMATION

The full Report is available from Roy Morgan Research for $2,800 + GST

To purchase the Report:
email: Michele.Levine@roymorgan.com
Tel: (03) 9629 6888

Neo-Typology enquiries to:
Ross Honeywill
ross.honeywill@neogroup.net
Tel: 0418 175 822