Consumer confidence in the Netherlands has taken a huge dent, with the Dutch Statistics reporting the largest-ever drop in consumer confidence at the end of April. The culprit? COVID-19. This month, many Dutch consumers will be getting their holiday pay, either delayed or as usual. But how are consumers spending their hard-earned holiday pay during these coronavirus-dominated times? Are they going on holiday, buying more online or putting their money to some other use?
Holiday pay. It’s been the subject of a fair few articles, discussions and analyses already, and many Dutch consumers were unsure whether they would be getting their holiday pay in the first place. After all, some companies have temporarily postponed holiday pay to help navigate the choppy waters of COVID-19. This prompted the Springbok UX & Research team to consult a group of consumers and ask them about their plans. This time, we asked 500 consumers aged between 25 and 55 about what they were going to do with their holiday pay.
In these uncertain times, a striking 65% of respondents told us that they would be spending their holiday pay differently than they have in previous years. Respondents in the 46-50 age group were the most likely to put their holiday pay to some other use (71%). Another notable observation is that higher educated Dutch consumers are more likely to spend their money differently (HBO: 69%, University: 72%) than consumers with an MBO degree (59%)
As many as 54% of respondents told us that they would be saving at least part of their holiday pay, but since this is the first edition of this survey, it is difficult to tell how this compares to other years. Many respondents did, however, stress that their plans had changed and lots of the responses were telling, such as: ‘Save and hopefully go on holiday at some point’, ‘I probably won’t be able to go on holiday now, so I’m going to save up to go on holiday later this year’ and ‘Our washing machine recently broke so our buffer is gone and I’ll be putting this money aside.’
The broad sense of uncertainty about the current developments are reflected in responses such as ‘Everything is uncertain’ and ‘We can’t be sure that the wedding will go ahead or that I’ll keep my job’ and ‘It’s best to keep a buffer in uncertain times. There’s bound to be plenty of expenses in the near future, and having a buffer always pays off.’ On top of saving their money, people also report re-examining their usual spending patterns, presenting significant opportunities for marketing professionals, especially in the utilities, banking and insurance sectors.
Interestingly, young people, or rather young professionals, are the most inclined to start saving, possibly driven by uncertainty about whether they will be able to graduate and whether or not they will keep their job (more likely on a fixed-term contract) or find a job. The 26 - 30 age group is the most vocal about saving (77%, average 54%), and there is a strong downward trend among other age groups. By comparison, a “mere” 44% of respondents in the 46 - 50 age group mentioned saving.
Another striking observation about the 26-30 age group is that they are more likely to go on a day trip in the Netherlands (19%) than any other age group (avg. 14%), while ranking relatively low on purchasing electronic goods (4%, avg. 9%), home furnishing (19%, avg 27%) and domestic holidays (15%, avg 24%). Elderly people are especially likely to go on a domestic holiday.
So what other notable trends could we identify, apart from saving? Consumers are still more inclined to keep their spending close to home, opting for home upgrades or new garden furniture from retailers such as Leen Bakker, Fonq and Blokker. Respondents reported: ‘I don’t expect to be able to go on holiday seeing as it’s not safe, so why not get comfortable at home’ and ‘We’ve used all our extra time off to get started on home improvement projects, which cost money’. Again, this presents clear opportunities for marketing professionals. What comes after the toys, puzzles, trampolines and gardening supplies?
Electronic goods were another popular destination for holiday pay (9.1%). Now that we’re spending so much time at home, we want to enjoy life as best we can with a Samsung Smart TV or JBL portable speaker. The question is whether people will rely mainly on online retailers or will still prefer their local Mediamarkt branch. It should be noted that respondents aged 35 and over were particularly likely to purchase electronic goods.
Respondents also reported spending their holiday pay on domestic holidays (24%) and day trips (14%). Now that the country’s major zoos and amusement parks, such as the Efteling and the Beekse Bergen, have introduced measures to slow down the spread of COVID, they have become an appealing option. Day trips are particularly popular among families with children, such as this family: ‘I wanted to treat my kids to a holiday nonetheless.’ or “We usually go abroad on our holidays, but the corona crisis has forced us to go on a domestic holiday or day trips instead.’ In a bid to control crowd sizes, many companies have opted for online reservation systems, which is good news for marketing professionals, as it leads to more customer identification, more data insights and more opportunities for pre or post-visit campaigns and cross- or upselling. Above all, it boosts the relevance of all other digital marketing assets.
A holiday abroad (18%) is still an option, but the big question is when. One family, for instance, put it this way: ‘Perhaps we’ll go in November if the coronavirus outbreak is over’ and ‘We probably won’t be able to go on holiday because of coronavirus, so I’m going to save up to go later.’
An important news flash for marketing professionals: consumers are planning to spend their holiday pay as quickly as possible. In the Home & Garden (70%) and Electronic goods (77%) categories, consumers want to spend the money in the short term, within 3 months of getting their holiday pay. Respondents planning domestic day trips reported that they would do so after corona measures were relaxed (30%) or in any case within the next three months (48%). It’s clear that we have a busy summer ahead of us. Measures are already being scaled back, but with the ongoing need for social distancing, restrictions will be imposed on visitor numbers, thus capping capacity. Only a small portion (6%) of consumers are looking to wait to 2021 to plan their holiday and/or day trip.
Will any of these recent COVID-induced changes be here to stay? On average, 30% of respondents indicated that we will (eventually) return to our old lives. Strikingly, this is particularly true for older respondents, while only 19% of respondents in the 26-30 age group agree.
The vast majority (83%) expect that certain changes will prove permanent. Online shopping is a notable stand-out, with 38% of all participants expecting a structural change in their own behaviour. These consumers agree: ‘Online shopping has become a lot more convenient, but I often weigh up whether the price warrants taking the extra risk’ and ‘I love the convenience of having products delivered that I used to buy in the shop.’
Online shopping has taken off and it’s not going anywhere any time soon. HEMA even converted its brick & mortar outlets into distribution centres to help meet the increasing e-commerce demand. Now the pandemic has confined them to their homes, consumers can experience the convenience of online shopping and having their groceries or gadgets delivered to their doorstep. In the survey among elderly people, we saw a similar development and detailed the opportunities for marketing professionals. With a clever on-boarding campaign, this ‘new’ group of online consumers may return to your shop for a second or even third purchase.
In addition to online shopping, many respondents stress their intention to buy local (24%), as did this consumer: ‘Many small business are struggling and I want to support local businesses in the coming months by buying my meals/supplies there.’ Others added: ‘Local small businesses will need our help and I’m sure they’ll get it. We already bought things online occasionally before the pandemic.’
Working from home is another oft-heard consideration (28%), with respondents who do not have children painting a more positive picture than their counterparts with children. There is a chance that this will change when nurseries and primary schools reopen. Finally, single parents are more likely to indicate that they will change their spending habits (21%) than families with children (7%) or couples (6%).
We’re living in fascinating times. Corona has shaken up the marketing landscape and changed consumers behaviour and spending habits. There is more uncertainty among consumers, and the controlled lockdown has also prompted them to postpone necessary purchases in certain product categories. With holiday pay and the gradual reopening of society on the horizon, consumer behaviour is set to take another turn, creating new opportunities to set yourself apart from the competition.
Author Gerrit van Leeuwen is Digital Director at Springbok. This article previously appeared on Emerce.