In the changing Argentine economic scenario, savings and consumption habits have become a faithful reflection of the constant struggle that citizens face in the face of inflation and uncertainty. From the research we carry out at the YOUNIVERSAL TREND LAB, we find different emerging markets that rekindle learning and new habits that Argentine consumers are developing to adapt to this challenging context. Within the framework of the PASO and with results that surprise many, the reality of inflation added to the uncertainty for the future means that the months that remain until the general elections can be counted as “months that are worth years” for the level of anxiety and exhaustion that they generate in consumer citizens.
We were carrying out different studies in the months prior to the PASO and we found that the vast majority of consumers had them on their radar as a milestone of the year, whose “day after” and beyond the political and ideological preferences of each one, everyone was convinced that it would have very concrete and immediate consequences for their daily economy and their capacity to consume.
It is already a placeWe still talk about the “Argentine exceptionality” and the inflation challenge, a chronic problem in the Argentine economy, affecting the purchasing power of citizens and eroding the value of their income. Faced with this challenge, Argentines have historically adopted various strategies to deal with constant price increases, and many of them are reactivated in turbulent contexts. We share here some of the emerging ones from our latest research with consumers from the entire pyramid and between 18 and 65 years of age:
Reassessment of spending priorities: Argentine consumers are reconsidering their spending priorities, opting for essential goods and services such as food, housing, health, connectivity.
- In food there is a growth of second brands, purchases from wholesalers, less stocking capacity, willingness to test new cheaper alternatives that promise performance.
- In housing, the concern about rents and how they will continue to rise is very strong, among young people there is a strong concern about whether they will be able to maintain their independent home or they will have to return to their parents’ home and the dream of their own home is increasingly seen away for lack of credit.
- In the areas of health and connectivity, there is a very strong (and critical) evaluation of the costs of prepaid, evaluating in many cases abandoning it, changing plans or going to a cheaper one.
For many, discretionary expenses like entertainment and travel have been reduced in favor of basic necessities and for those who can still afford them, they become the “vitamin” that brings a little pleasure that helps offset the stress. Here we find everything from keeping streaming services, to going out to eat or seeing a recital or going to the movies or theater. In uncertain times, consumers seek refuge in pleasure and good times as an innate instinct for emotional preservation.
Search for offers and discounts. Hunting for deals and discounts has become a common practice. Consumers are spending more time comparing prices and looking for promotions both in physical stores and online. This leads to a boom in the popularity of discount and offer boosting application platforms. Argentine consumers are specialists in searching and searching for options to be able to continue consuming and today the apps help from calculating the best forms of payment to “beat” inflation, to taking advantage of additional benefits.
Postponement of major purchases. Faced with uncertainty about the economic future, many Argentines are putting off major purchases such as cars, appliances and property. Others choose to buy what compromises them less but at the same time allows them to protect value in some way, for example with the purchase of a car or electrical appliances, trying to take advantage of whatever the terms and installments in force until today are going to last. Whether they choose to buy or not, the idea of committing to long-term debt is viewed with caution and limits the dreams of many in this regard. A horizon that is getting shorter and shorter and that allows us to project.
Opening to new forms of investment. Many Argentines (particularly younger males and middle-class adults) are exploring options such as investing in cryptocurrencies, stocks, and other financial assets as a way to hedge against inflation and local currency devaluation.
In summary, the consumers with whom we spoke during all these months were and are worried about the economy and inflation, about their job stability and about insecurity. Pains that we are used to, but that continue to hurt. Short-term strategies that we reactivate with each new onslaught of the context, but that we would like not to have to use.
Uncertainty triggers our survival instinct, generating anxiety due to a lack of control and predictability in the future. However, it also prompts us to explore new possibilities and adapt to the unknown: ultimately, this mix of emotions reflects our complexity and our unique ability to face the unknown with a mixture of apprehension and creativity. It will be a matter of surviving once again, recalculating.
Ximena Diaz Alarcon is Co-founder and CEO of Youniversal, a consultancy specialized in market research and trends.
by Ximena Diaz Alarcon
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