Retailers must channel marketing to meet new trends.
New-age South African consumers have drastically changed their buying patterns, with aspirational desires and budget buying trends heavily impacting the retail industry.
Retailers should be aware of this refreshed consumer mindset, according to Gareth Pearson, CEO at BMI research, and Professor John Simpson, director and co-founder of the UCT Unilever Institute of Strategic Marketing.
In this new world, consumer trends seem almost contradictory. On the one hand aspirational consumers long to improve their standing in life, so retailers need to talk to these desires. But on the other hand consumers are budget savvy.
Brand loyalty is not as important as it was a decade ago. Price and value for money is the consumer’s priority, and pre-planned shopping with no room for impulse buys is the biggest trend.
Pearson and Simpson say retailers therefore need to strategically channel their marketing efforts to meet these changing – and often contradicting – trends. If they don’t do this, they will struggle to hit their targets.
In terms of aspirational consumers, Simpson explains that people want to improve their states of living and their lives. As an example, the desires of the country’s emerging black middle-class have had a major impact on the retail sector.
“Consumer aspirations in South Africa are very important because they allow retailers to target their brands to particular customers, giving them the opportunity to buy items they feel better about as a result,” says Simpson.
Earlier this year he shared his research with members of the South African Council of Shopping Centres.
“In one way or another, whether it is in terms of the consumer’s personal circumstances, whether in terms of the society in which they are a member, or whether it has something to do with their families, they aspire to improve upon certain things.”
As a result, Simpson says South African retailers need to make their stores and products more attractive to consumers with aspirations.
“There is a big difference between just satisfying a need and perhaps getting something consumers aspire to have, which is normally above their needs.”
However, retailers need to carefully balance this with the increased savviness of consumers, as fundamental behaviour shifts prompted by squeezed household budgets also heavily impact their purchases.
Pearson says: “The biggest shopping trend is pre-planning. Consumers are planning their shopping trips more than ever before and are actively seeking out specials via broadsheets and pamphlets, comparing prices online, and then from this information, drawing up shopping lists.
“But these are unlike traditional shopping lists. These lists are detailed. They leave no room for impulse buys, they are aligned to the monthly budget right down to the last cent, and they are religiously adhered to, except in the case of on-site specials offering outstanding value.”
He adds: “There is no doubt the recession chickens have come home to roost, and right here in our backyard, but acknowledging and providing for this refreshed consumer mindset will ensure producers and retailers don’t fall foul of South Africa’s new savvy shoppers in 2017.”
According to a survey undertaken by PriceCheck, 58% of respondents shopped online when they spotted a good deal on offer.
PriceCheck founder Kevin Tucker says: “Having shared their reasons for choosing to shop online, the vast majority – 95% – of respondents say they will continue to shop online moving forward.”