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Consumer spending trends

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1. Cocooning

South Africans are entertaining themselves at home rather than heading for the malls and nightclubs, partly because of fears about personal safety and financial security. However, this has not translated into mass adoption of e-commerce, because many people fear they will be victims of cybercrime if they shop online.  Around 80% of South Africans are more concerned about the security of their personal information when shopping online than when shopping in a store, and 47% say security of their personal information is a barrier to making online purchases. Brands that show they care about customers’ safety will win the consumer’s heart.

2. Experiences trump possessions

Research data reveals that 50% of local consumers agree that experiences are more important than possessions. Rather than wanting to spend money on expensive possessions, consumers are gravitating towards low-cost experiences such as visiting the beach, listening to music, playing video games, going to church or watching televised soccer with friends.

Manufacturers and retailers that want to remain relevant need to think about how they will weave their brands into consumers’ day-to-day lives.

3. Instant everywhere

Brands like Uber and Airbnb are setting a new pace for the customer experience. Consumers expect products and services to be available when they want them – at any time, at any location, and on any device. Brands should thus focus on delivering slick, frictionless mobile interfaces that make it simple for consumers to gain access to services and products instantly and everywhere.

Around 57% of SA respondents to our research say they need shops and services to be available at all times; 31% say it is essential to have access or store content in the cloud. Demand for instant access to services and products is even higher among people aged below 35 years.

4. Savvy shoppers

SA consumers are coping with the difficult economic situation by shopping less frequently, spending less during each shopping trip and buying bigger packs for better value. They are also becoming less loyal to brands as they seek out the best prices.

About 70% of local consumers say they are less loyal to any one retailer, because they have to shop around more to find the best value; 69% agree the most important thing about a brand is that it offers good value for money. They are embracing the Internet for bargain hunting:

•       88% of connected consumers use the Internet to find products they want

•       45% use the Internet to purchase a product

•       40% check prices online, then buy in a traditional store

•       65% have used a mobile phone to help them shop in the past six months

5. Considered consumption

Local consumers are demanding transparency and authenticity to enable them to make considered consumption choices. Eco-citizenship has a high priority, with younger people in particular recognising the importance of sustaining the planet so that they can have a prosperous future.

rajesh

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