This Recession Created A Generation Of Switchers

New Zealand’s cost-of-living crisis has created more confident consumers who compare, question, and switch brands. Discover what this means for loyalty and growth.

It feels like New Zealand is starting to breathe again.

The forecasts are becoming more positive, confidence is slowly returning, and there seems to be a growing belief that the worst may finally be behind us. The IMF is forecasting 2.7% growth for the New Zealand economy and, after a few tough years, many of the indicators are finally pointing in the right direction.

That's the economic story.

I'm more interested in the consumer story.

In my last article, I argued that the 2021 consumer isn't coming back. Several years of financial pressure have changed how people assess value, status, and what makes a smart decision. The question I keep coming back to is how that happened.

Consumers didn't wake up one morning and suddenly decide to think differently. Something had to change their behaviour first.

One thing keeps nagging at me. Marketers and their agencies spend millions of dollars every year trying to get people to try something new. Free trials, test drives, introductory offers, demonstrations and launch campaigns all exist for one reason. Getting people to change is hard. In fact, I'd argue the biggest challenge for most challenger brands isn't convincing consumers they're better. It's getting consumers to consider them in the first place.

For years, most people stayed where they were. The same insurer. The same bank. The same supermarket. The same investment provider. The same agency. The same software platform. Not necessarily because they were the best options, but because they were familiar. There is comfort in the familiar. You know what you're getting. You know where the risks are. Even when something isn't perfect, staying put often feels easier than making a change.

Then the cost-of-living crisis arrived. Households started reviewing expenses. Businesses started reviewing costs. Suddenly there was a reason to revisit decisions that hadn't been questioned for years. That's the part I think many brands underestimate. The cost-of-living crisis didn't just change spending behaviour. It changed comparison behaviour. People started looking around. Not because they were desperate to switch, but because they wanted to understand whether the choices they had been making for years were still the right ones. They started asking questions they hadn't needed to ask before. Was there a better option? Was there a smarter option? Was I paying for something I no longer needed?

Once people start looking, they often discover something unexpected. Changing isn't nearly as difficult as they imagined. The paperwork gets sorted. The new supplier turns up. The subscription gets cancelled. Life carries on. What felt risky beforehand suddenly feels pretty straightforward.
That matters because the first switch changes the way people think about the second one.

A lot of behavioural change starts there. The first switch requires people to overcome uncertainty. The second requires much less courage. By the third or fourth time, switching no longer feels unusual. It simply feels like something sensible people do from time to time.

We see this in procurement conversations as well. A few years ago, many businesses would have stayed with an incumbent agency, supplier, or technology platform simply because changing felt like hard work. Today those same businesses are much more willing to take meetings, hear alternatives, and reassess what they're getting for their money. That isn't necessarily because they're unhappy. In many cases they've simply developed a habit of questioning assumptions. The same scrutiny people apply to their household spending has found its way into business decision-making as well.

Five years ago, "good enough" was often enough. Today people want to know they're getting value. The distinction matters because value and loyalty aren't the same thing. Loyalty is often built on familiarity. Value has to keep being earned.

McKinsey talks about the rise of the "resourceful consumer", while NielsenIQ is seeing consumers become increasingly intentional in how they spend. Different language perhaps, but both point towards consumers becoming more active participants in decision making rather than relying on old habits and default choices.

What interests me is that consumers haven't just become more conscious of where their money goes. They've become more comfortable changing their minds. That's a very different thing. Price sensitivity comes and goes. Confidence behaves differently. Once someone learns how to compare providers, evaluate alternatives, and make a switch, that capability doesn't disappear when economic conditions improve.

I suspect that's one of the biggest behavioural shifts to come out of the last few years. The cost-of-living crisis didn't just teach people how to save money. It taught them how to compare. It taught them how to challenge assumptions. It taught them that changing providers, brands, and suppliers isn't nearly as difficult as they once thought.

That's why I think many businesses are focusing on the wrong thing when they talk about recovery. The more interesting question isn't whether consumers will spend more. It's whether they're ever going to stop looking around.

My guess is they won't.

Once people discover they have choices, they tend to keep exercising them.

The cost-of-living crisis may not have created a generation of bargain hunters. It may have created a generation of switchers.

Once switching becomes normal, the question stops being whether customers will leave, it becomes why they would stay. That's the question I'm increasingly interested in because I suspect it sits at the heart of how brands will grow in the years ahead.