Thursday, 13 March 2014

Consumer behaviour changes? Look in the market basket!

The UK Office of National Statistics measures changes in the cost of living (inflation, specifically) by examining changes in the price of a typical household's 'market basket' of goods and services. Marketers are interested in the contents of this representative basket year to year because additions and deletions reflect changes in consumer behaviour and in the marketing environment, over time. Here's the ONS's explanation:
It is important when measuring inflation to take account of changes in the sorts of things people buy due to changing tastes and advancements in technology. If these changes weren't made, the basket (and therefore the measurement of inflation) would become increasingly irrelevant to households. For example, it wouldn’t make sense to base inflation nowadays on the price of mangles.
In 2014, the market basket consists of 699 items that might be purchased by an average UK household. Milk was replaced this year by flavoured milk; DVD rentals were replaced by on-demand entertainment rental services such as Netflix. The DVD recorder was deleted, due to much lower demand now that many consumers have other recording and viewing alternatives. Wallpaper paste was deleted. Canvas trainers were added.

The infographic above shows items (in green) that have been added at different times, and items (in purple) that have been deleted at different times. The mangle was eliminated from the basket in 1962; the microwave was added in 1987.

What will be added and deleted in 2015?