Hey big online spender
The high-spending, hyped-up tribe known as NEOs are emerging as the new sexy segment in the booming online sector.
Consumer behaviour expert Ross Honeywill, who dubbed the group Neo (Latin for new), has spent the past decade refining his research. He says the birth of the Neo coincided with the start of the information age in the 1990s and viral marketing, or "word of web".
Roy Morgan research defines NEOs as metropolitan dwellers and account for 24% of the Australian population. More of them live in inner Melbourne and Sydney than anywhere else in Australia.
They are most likely to be male (55%), 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.
NEO consumers however are an audience bound not by demographics or income, but by spend behaviour and attitude. Socially and economically powerful, NEOs account for more than half (54%) of discretionary spending. NEOs spend more, spend more frequently and dominate spending in the online environment. They believe it gives them greater control as consumers.
They are the group that Yahoo and the Neo Group claim will drive a boom in online purchasing in the next two years - 61 per cent of them have purchased over the internet, compared to 25 per cent of the general population. "Newspapers, magazines and the internet make a pretty fine mix for reaching NEOs, but the internet is stellar," "Ninety per cent of them are online.”
Yahoo's director of marketing, Brett Corrick, said Yahoo would unveil a series of initiatives in coming months which would square the company's service directly against "neo mindsets".
“It is the NEOs who are fuelling the growth of the online industry. NEOs power online commerce. They are more connected, use the Internet more frequently and they spend more online than Traditionals,” said Ross Honeywill, Managing Director, Neo Group.
On the broader issue of the continuing slowdown in growth for the retail sector, Mr Honeywill said those retailers with "discount and deal" as their main proposition would "suffer sooner". Basic needs retailer such as Harvey Norman would be hit first and hardest, he said. "Those with quality and service like David Jones, as opposed to Myer, will be more robust in the next 12 months. But what's really significant is online retail.
"It will be completely counter-cyclical. That's going to be the darling of the market."
Related Links
Customer Strategy
Yahoo Press release
NEOs powering online commerce
Big spenders 'boosting economy'
Yahoo chases big-spending neos
