Energy bills are going over the top. More and more households and businesses are deeply affected by the unprecedented high costs. And with these rising costs, more and more Dutch people are struggling to pay their energy bills, causing great concern in many households. In the Consumer Behavior Monitor, an initiative of VU Amsterdam and Validators, we zoom in on current concerns and look at how these concerns translate into behavioral changes. How do Dutch people cope with skyrocketing energy costs and what do they save on first in their "mental household book"?
With the polycrisis in mind, Validators and VU Amsterdam have redesigned the Consumer Behavior Monitor to quickly identify behavioral change. The addition of an advanced Voice tool is a catalyst for this. The tool generates richer responses that more clearly reflect sentiment. As a result, you can see the impact of a crisis on behavior even more strongly. To give you an idea, below is a voiced, more intuitive answer from Consumer X to the question of whether the crisis has an impact on behavior:
'Well, anyway, I've become even more frugal. I leave the car behind even more. By the way, it's also better to exercise. I pay more attention to leaving the lights and TV on unnecessarily. They are power guzzlers. So I don't leave them on standby anymore. Yes, so I'm really trying, being more frugal. I just hope that people will be helped a little bit anyway, because it's really tough. It would be nice if there was a concession, so that people could also just buy their food.'
Uncertainty height energy bill and fear of not making ends meet
A third of the Dutch are quite worried when it comes to the energy crisis. A large part of the Dutch who are worried indicates that they experience uncertainty about the amount of the energy bill (57%). In addition, 4 in 10 Dutch people are afraid of not being able to make ends meet in the future. Nearly a third of the group experiencing worries says they are worried about not being able to pay bills (on time) and another third is afraid of having to cut back on basic necessities such as food and drink. All of these financial worries translate into behavioral changes, whether forced or not.
Martin Leeflang, CEO Validators: 'The multiplicity of crises usually makes it complex to measure the effect on consumers, but the Consumer Behavior Monitor now measures this topic in its entirety. It is expected that people will spend less, the question is where the hits will fall. With innovations such as voice analytics in the monitor, Validators wants to uncover more unconscious behavior. The first results are already providing better insights, such as now the return of the mental household book. The goal is to feed marketers in times of (economic) uncertainty with in-depth insights so they can make better brand decisions.'
Consumers devise countless solutions just to save within the energy piggy bank. The mental household book, which has a money pot for every spending category, is being scrutinized. For example, 64% of Dutch people save energy in a jiffy by turning the heating down or off by default when away from home. Many Dutch also say they spend a shorter time in the shower (63%) and cut back on shower frequency (39%). About 6 in 10 Dutch people put on a sweater more often or grab a blanket to keep warm. Finally, 39% say they use more energy-efficient appliances and light bulbs. A financial incentive thus encourages more "green behavior.
Impact of energy costs on consumer behavior appears limited
Yet it appears that the financial concerns experienced due to higher energy costs do not cause savings within other spending categories. Take for example the categories fashion and restaurants/take-aways. In these, we see no decreases in spending over the past two weeks. In fact, almost half of the Dutch (46%) indicate that they (still) spend the same amount of money on restaurants/take-aways. 29% indicate that they spend no money on this category and 15% spend less money on it. Consumers seem particularly solution-oriented in the mental part where the problem is also created: energy prices are shooting up, so we are going to take shorter showers. That we then save on other categories we do not yet see. So the mental household book, where you mentally divide your money neatly into pots, the problem seems to arise mainly within the category.
Marcel van Brenk, partner at EY VODW: 'Although every brand has to take into account changing social conditions, consumers primarily blame the increased costs on the energy companies. Empathy for the worsening conditions is good, but actually solving it is a bridge too far. Even more promotions erode the margin and offer no long-term relief. Each brand has to fill in from its own perspective how it can do its part, without going straight to the price tool. The need to know how brands contribute is also growing among consumers (from 17% to 29%).'
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This article can also be read at MarketingTribune.