South Africans are having a moment, one of optimism, hope and confidence, while enjoying a bit more money in their pockets, according to StatsSA.
This comes after the surprising 4.1% increase in retail sales in Q2, while year-on-year the category increased by 2% in the second quarter of 2024 compared with the second quarter of 2023.
Add the lower fuel price, less load shedding, an interest rate cut and access to the controversial two-pot system and consumers will be somewhat flusher – right in time for the season.
The 2024 South African Customer Experience Report, an annual, in-depth study among 2 000 online South Africans and over 70 businesses, delves into the consumer-business relationship.
The report is co-authored by Rogerwilco CEO Charlie Stewart; Julia Ahlfeldt, customer experience professional (CCXP) from Julia Ahlfeldt Consulting; and, Amanda Reekie, founding director of research tool, ovatoyou.
Is your business ready to take advantage of this?
Comparing what consumers want from the brands they choose to buy from and what brands think they want, the sixth consecutive report tells the tale of a substantial disconnect between buyer and seller.
“Buyers have been through the mill during the past four years, thanks to two back-to-back crises, and have had to – across the income chain – change their buying behaviours. Life got expensive. Electricity, school, fuel, food, it all went up. What went down was the purchase of luxury items, as necessities like groceries took the lion’s share of people’s income,” said Reekie.
According to Ahlfeldt: “This was evident in last year’s Black November trading period. What is normally a rush on discounted electronics, appliances, etc, in 2023 consumers instead opted for deals on groceries – spending R8.3 million, according to Absa payments acceptance executive Vish Chetty – and other day-to-day purchases, instead of spoils like big-screen TVs.”
More consumers shop online during season and brands need to get onboard
What also occurred during last year’s Black November was a clear move among consumers to shop more online, as evidenced by the 20% increase in sales volume at Absa, as indicated by Chetty.
They’ve also become more discerning and know how to find the best product within their budget by toggling between multiple brands online or on an App, at once, looking for the biggest discounts.
What can brands do to capture the additional spend in the economy?
“Businesses that were asked, ‘Why do you think your regular customers continue to buy from you?’, 56% strongly believed it was because their customers like their brand, trust them (71%) or find value in their loyalty programmes (42%). Offering an effective delivery system that is also good value (21%) and personalisation (40%) are also key for businesses, but less so for consumers. This points to a significant disconnect between shoppers and shops,” Ahlfeldt said.
For starters, brands must look carefully at their detailing experience: Does it get the basics right, such as ease of navigation and check-out? Does it have access to help if needed, and do you have a human nearby? Is it transparent regarding delivery and any other fees? Is its loading time quick? Does its App work properly?
“The latter is extremely important to online shoppers. We live in a ‘now’ environment – not a now-now, or just-now, but now. This is typical of the instant gratification world that has mushroomed since the advent of the smartphone. It also affects consumers’ patience when dealing with brands’ response times. A significant amount of consumers (44%) said they expect an answer within an hour, compared to 26% of businesses who say the same.
BUSINESS REPORT