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Brexit Consumer Segmentation

Introduction

Our Brexit consumer research programme is designed to gauge perceptions of and attitudes to the consumer landscape after the UK leaves the EU, and measures consumer expectations and priorities across the economy. Our Brexit tracker survey is nationally representative and captures consumer views on a quarterly basis. After the first wave of the survey was conducted in September 2017, we carried out a segmentation to see whether the range of consumer attitudes towards Brexit and its impact could be grouped into distinct categories. The questions included in the segmentation are forward-looking, allowing the size of each segment to reflect any underlying changes in consumer attitudes over time.

Methodology

We undertook a statistical segmentation to split the population into groups based on four themes - attitudes towards trade, Brexit outcomes, engagement with Brexit, and views regarding the impact of Brexit on prices. The nationally representative sample of 2,072 respondents was collected by Populus on behalf of Which? through an online survey. Fieldwork took place between the 15th and 17th of September 2017.

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Segment Profiles

Our segmentation identified four distinct groups in the population:

  • Engaged & Concerned
  • Resolute Optimist
  • Hopeful Pessimist
  • Distant & Disengaged

This section describes the profile of each segment. Demographic details, whilst not used as variables within the segmentation process, are also included to aid profiling. We intentionally decided not to include voting behaviour in the segmentation, in order to not be tied to past behaviour and instead focus on how consumers feel about Brexit now and their expectations for the future. All of the statistics in this section come from the original segmentation data collected in September 2017.

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The chart below provides an overview of the strength and direction of the four attitudinal themes for each segment profile.

Distant & Disengaged

The largest segment of the population, Distant and Disengaged, are primarily characterised by their ambivalence towards the process and limited knowledge of Brexit issues.

In terms of impact, the majority of Distant and Disengaged consumers do not anticipate Brexit having an impact on the price of a range of consumer goods and services. The majority think Brexit will have no impact on their quality of life (56%) and are the group with the highest proportion of people saying it will have no impact on their personal finances (40%). They have mixed views about how it will impact the UK economy. When asked their view on whether they thought the possibility of creating new non-EU trade deals after Brexit was a risk or opportunity, they sat somewhere in the middle with no strong views either way with nearly a third (31%) claiming they didn’t know.

Compared to other segments, the Distant & Disengaged group are the most likely to describe their financial situation as ‘poor’ (25%) and nearly half of the group (42%) have a household income of less than £21,000. This segment has the most precarious financial situation, and thus the most vulnerable to any price rises which may occur as a result of Brexit. However they are the most likely to assume that Brexit will have little or no impact on their lives.

Engaged & Concerned

The smallest group identified, the Engaged and Concerned segment comprise 12% of the population. This group is characterised by its pessimism towards Brexit and its impact, as well as feeling extremely knowledgeable about the process and talking about it regularly. This group are pessimistic about both the impact on them as an individual -  the negative impact on the prices of consumer goods, the impact on their personal finances and quality of life - as well as the broader impact, as the majority (91%) think the UK economy will be negatively affected.

This group has a fairly distinct demographic profile when compared to the total sample. A large proportion (42%) are under 35, the majority live in an urban area (50%) and a higher than average proportion (48%) have a university degree. They have the largest proportion of people on high incomes, with less than one fifth (17%) having a household income of less than £21,000.

Interestingly, while this group are the most well off of all segments identified, they are the most likely (40%) to say they are dissatisfied with their income and that a cost of living increase of 10% would have a significant impact on their day to day life (82%). This could suggest an overall tendency towards pessimism within this group, towards other areas of their life as well as Brexit.

Hopeful Pessimist

This group make up just over a quarter (28%) of the population. Their level of engagement with Brexit in the media and frequency of discussing Brexit is in line with the average, as is their claimed level of knowledge about the topic. Their view of the UK post-Brexit is a mix of both optimism and pessimism. When asked their view on whether they thought the possibility of creating new non-EU trade deals after Brexit was a risk or opportunity, those in the Hopeful Pessimist group see this mainly as an opportunity (90%). However, they are fairly pessimistic about the impact of Brexit on both the UK economy and their personal finances. They are also fairly pessimistic about the impact of Brexit on the price of consumer goods and services.

Looking at the demographic information of the Hopeful Pessimist group, they are fairly in line with the UK population in terms of age and income. However, they are the segment most likely to have children under 18 in the household (29%).

Resolute Optimist

The final segment makes up a quarter (26%) of the population. The Resolute Optimist group are characterised by their profound optimism towards Brexit and its impact. They feel very knowledgeable about Brexit and engage with the topic in the media relatively frequently. However, in contrast to the Engaged and Concerned group, this group strongly believe Brexit will have a very positive effect on the UK economy (90%), their personal finances (70%) and their quality of life (71%). Further, when asked their view on whether the possibility of creating new non-EU trade deals after Brexit was a risk or opportunity, the vast majority of this group saw this as an opportunity with no significant risks (94%). When asked what impact they thought Brexit has or will have on the price of a range of consumer goods and services, some think Brexit will impact the price, however, this group are the most likely to think it will have no impact at all.

Much like the Engaged and Concerned segment, the Resolute Optimist group have a distinct demographic profile. This segment has the highest median age (55), the highest proportion of over 65s (34%) and the highest proportion of owner occupiers who have paid off their mortgage (45%). Compared to the other segments, they are also the most likely to say they are satisfied with their life (75%) and their household income (52%). As with the Engaged and Concerned group, these findings suggest an attitudinal tendency to think a certain way about not just Brexit but one that extends to their everyday life - they are optimistic about both.

Consumer & Brexit Views

Following the fourth wave of the Brexit tracker in July 2018, we analysed the views of each segment on the importance of a number of consumer rights.

Perceived importance of maintaining consumer rights

Our survey tracks consumer views on how important it is to uphold a number of consumer rights after the UK leaves the EU. Examples of these rights are the ability to ‘roam like at home’ whilst in the EU, and the ability to take legal action in the UK if you buy a faulty product from an EU country. For most of the eight consumer rights mentioned, a majority of consumers from all segments think it is important to uphold them. However, the size of this majority varies by segment. Across all rights, it is the Engaged and Concerned group who are most likely to say it important the right is upheld, and the most likely to select ‘very important’. Another consistent trend across the list of consumer rights is that the Distant and Disengaged group are the most likely compared to other segments to say they didn’t know, illustrating another area of disengagement. The level of importance attached to upholding one of the consumer rights - access to healthcare when travelling in the EU - is shown below.

Respondents were also asked to choose which consumer right, if any, would most affect their household if it was removed. The Resolute Optimist and Distant and Disengaged groups were the most likely to say that none of the rights mentioned would affect their household if removed (24% and 39% respectively). This is compared to just 9% of the Engaged and Concerned group. It is worth noting that for all segments, a majority did think that the removal of one or more rights would affect their household.

Proportions Over Time

As of July 2018, we have conducted four waves of our Brexit tracker. This means we have been able to track the sizes of our consumer segments as the negotiations progress.

As the chart above demonstrates, the relative proportions of the segmentation have stayed fairly stable over time. However, there has been a small but noticeable increase in the proportion of consumers who fall into the Engaged and Concerned group. This group represented 12% of consumers in September 2017 and increased to 16% of consumers in July 2018. There has also been a corresponding decrease in the proportion of consumers who fall into the Distant and Disengaged group - suggesting a small shift in how engaged the public are with Brexit and associated topics.

We will continue to monitor how consumers think and feel about Brexit and its impacts over the next 12 months. Our Brexit consumer segmentation offers a unique way to understand how the UK population feel about the UK leaving the EU and its potential impact on consumers.

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