Although consumer confidence fell last month to its lowest level ever, we are again spending more and more money on experiences that have been denied us in the past two years. After years of restrictions, the need for things like eating out, cultural activities and holidays is high. And we see this reflected in the Consumer Behaviour Monitor, an initiative of Validators and VU Amsterdam. So there's a lot we can do, but at the same time we live in an uncertain time that could make us cautious about spending money. For marketers, it seems to be quite a challenge: things seem to be going well now, but heavy economic weather may be lurking. How do you deal with this as a marketer?

Young people mainly worried about the work situation
Figures released by the CBS show that consumers were pretty downhearted about their confidence in the economy in April. In fact, consumer confidence has never been this low since measurements began in 1986. People's willingness to buy also bottomed out. Never before have people been so negative about their future financial situation. This is also reflected in the figures of the Consumer Behaviour Monitor. Since the war in Ukraine, more Dutch people put money aside in the form of a savings account, cash in the house or investments. In mid-April, the percentage of Dutch people doing so was 16%, which rose to 22% (+6%) in mid-May. In addition, the group that spends money on fun things is getting smaller (9%, -4% compared to mid-April). Financial worries are also on the rise. 27% of Dutch people are worried about their work situation, a percentage which is higher than in mid-April (+5%). This increase is mainly caused by the group 18-34-year-olds: 40% are worried about their work situation (+13% compared to mid-April).

Financial uncertainty does not stop us from spending now that everything is possible again
Current inflation rates are through the roof, consumer confidence is low and we are in an uncertain time of war: all factors that should logically cause us to be a bit cautious financially. Although the first indications are there (we are buying more cheap peanuts and less luxury nut mix, reported the NOS April), the data from the Consumer Behaviour Monitor seems to indicate that, for the time being, we are closing our eyes to the (financial) uncertainties. We seem to be mainly busy compensating for the past corona years. For two years, we spent little money on experiences, so we now feel we have a lot of catching up to do. In the monitor, we see an increase in spending on restaurants/take-aways since mid-January; 33% of Dutch people spent money on these in the past two weeks (+9%). Since mid-January, there has also been an increase in spending on cultural activities (13%, +11%) and hotel stays (12%, +5%). Apparently, our need for experiences is so great that no crisis can now get us out of the restaurant or nightclub.

 

Daan Muntinga, strategy director at Mensch: 'Never before have we seen so much contradictory data in the Consumer Behaviour Monitor and other consumer indexes. It seems that many people do not yet care much about the uncertainty that awaits us around the corner with scythe and axe - everything points to a recession being inevitable. People are ostriches, hardwired to make fools of themselves. So we put on blinders and take it while we can. It reminds me of the song Dansen op de vulkaan by De Dijk: Even if the whole thing has to end / Sweetheart, put on something nice / Because we are going / Dancing, dancing, dancing / Dancing on the volcano. Marketers would do well to know that sentiment and adjust their plans accordingly: prepare for the worst, hope for the best'.

Noud Schartman, PhD student at VU Amsterdam and Validators: 'During the lockdown, spoiling yourself was a matter of ordering something delicious, buying new clothes online or using luxury personal care products. Now we can spoil ourselves again with outings and holidays, see the crowds at Schiphol Airport. We know very well that we should consume less and fly less for the environment, that it might be better to save some money instead of spending a lot now, and that products will probably become a lot more expensive in the near future due to inflation, war and shortages in logistic chains. But because of the past two years, many Dutch people feel a kind of need and maybe even a right to take a break now. Many Dutch consumers do not yet seem to fully appreciate that some of these developments are likely to continue in the longer term. Is there perhaps a role for marketers in bringing this news to the public in an understandable way?

Marketers must be ready for a moment of transition
It is more relevant than ever for marketers to be alert for a moment of transition. Things seem to be going well now, but heavy weather may be lurking. Keeping a finger on the pulse of your target group is the least you can do as a marketer in this situation. Above all, keep researching your target group to see what their needs are and stay in tune with them as much as possible.

Marcel van Brenk, partner at EY VODW: "For marketers, these are the moments that matter. A world in which consumers sometimes display irrational behaviour while a recession is looming. More than ever, you can distinguish yourself as a marketer if you stay close to the consumer, pick up on developments quickly and, above all, know how to translate them into appropriate solutions. A combination of data (head) and feeling (heart) is of course worth its weight in gold, but there is a clear task for all marketers to take their role and get the organisation moving!

Enjoy!
Team Validators

This article also appeared on MarketingTribune.