The Netherlands is dealing with historically poor purchasing power figures, caused by an 'exceptionally high inflation'. On average, the purchasing power of households will decline by 6.8 percent this year. Not exactly rosy news for consumers - at the end of August the CBS CBS reported that consumer confidence had fallen to its lowest level ever. How does the poor economic outlook affect consumer behavior? We did a deep dive into the Consumer Behavior Monitor, an initiative of Validators and VU Amsterdam.

Most logical is to look at spending right away. What did consumers spend their money on in the past two weeks? For 86% it was on groceries, up from four weeks ago (77%). Followed by restaurants (35%) and fashion (34%).

And if we zoom in even further on the increase in the number of 'message shoppers', we see that it is mainly caused by people with a lower income. Of these, 92% said they had done their shopping in the past two weeks. This could indicate that people are now hoarding a little more in order to cope with a possible recession later on. In this group, shopping is mostly done offline, so actually physically in the store (84%), compared to 68% on average. We also see in this group, in second and third place, money is spent on fashion (30%) and a private vehicle (29%).

Knowing that more people are spending their money on (physical) groceries, as a marketer you would do well to stand out even more and more often in brand communications. Make sure you consistently put your Distinctive Brand Assets to work for you, to activate brand associations when the moment of purchase comes. That way, you'll at least get into that consideration set of consumers' brains.

Stand by your consumers
Daan Muntinga, strategy director at Mensch: 'More people are worried about tomorrow. For supermarkets and other retailers, but also for energy suppliers and many other companies, this is an excellent moment to assist their consumers, to show that they have their best interests at heart and can empathize with their concerns. Not just with words, but especially with behavior. Like the North-Holland supermarket chain Vomar for example, which has promised not to adjust its bread prices until the end of this year (while bread is becoming 10% more expensive), offers good day-old bread at half the price and, under the banner of "Goedkoopkracht", reduced the price of 300 basic products to "level out" purchasing power. Now that supermarket prices have risen by 20% in a year, Vomar is showing that it understands what consumers are up against and is really acting on it. The company shows that it is prepared to make concessions itself. That is usually seen as very sympathetic. And that is good for both the short and long term.

Brands provide grip
What we also know from a previous study on the relevance of brands in product categories (BRiC: Brand Relevance in Category), is that people seek grip on brands in more difficult times. Consumers often experience uncertainty when buying products and try to avoid it. Brands have a risk reduction function here. Because consumers choose a brand they already know, they reduce the risk of making a bad purchase. However, this is by no means true for all categories. Brands are especially relevant when it comes to products like beer, cell phones and cigarettes. Marketers of brands in categories with a high BRiC score, it is important not to rest on their laurels, but to invest now in brand building and increasing media reach, so that you have extra touch points to strengthen your association network and thus ensure that your brand pops into the consumer's head more often when it matters (i.e. when a consumer has a need). Also, you can often charge a higher price for a product with high brand relevance. People seem to be a little more loyal.

Categories in which brands are less important are, for example, toilet paper, paper tissues and energy suppliers. Here, for example, price (communication) can be a good driver. Increasing physical availability can also help here in the purchasing process.

Do you want to know more about (changing) consumer behavior? Then sign up for the Monitor consumer behavior.

This article can also be read at MarketingTribune.