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Cash-strapped consumers seek value not ‘specials’

South African consumers look beyond price when actively seeking value for money while grocery shopping, with their perceptions of physical characteristics and quality superseding price in making astute purchase decisions that deliver value.

These were among the key insights that emerged from BMi Research’s latest consumer shopping behaviour survey, which sought to qualitatively explore the impact of the current economic climate on South African consumers’ lifestyle and shopping behaviour, specifically, what drove consumers to seek value when grocery shopping.

“It’s an easy trap to fall into; believing that price alone will sway a consumer’s decision to buy a product. However, the reality is, consumers are more perceptive than that and consider products and promotions holistically before deciding to buy a product or not. Price does not equate to value; what the product can offer the consumer for that low price, does,” explains Gareth Pearson, CEO of BMi Research.

Consumers participating in the survey stipulated that the quality of products on special was particularly important. Products needed to satisfy their needs and expectations, last a long time, have expiry dates and quality checks and demonstrate all the characteristics of regularly priced items, ie have the right consistency, colour, taste and smell, while producing the same or an equivalent result.

Not swayed by false economy

Another outcome that could perhaps surprise some retailers was that consumers were aware of the false economy related to specials, such as they paid more for smaller quantities. Because of this, consumers first evaluated promotional offers on a number of criteria to determine the true value before making a purchase commitment.

Consumers stated that an enticing special was of no value if the product on offer was:

• Not a quality product (if it was thinner than their regular brand, i.e., body lotion, cleaning liquid, toilet paper, etc. they needed to use more, so less value)
• Not convenient to obtain (they wouldn’t go out of their way to buy it, i.e. if not on their route home);
• If it had a high unit cost when buying in bulk (what is the real saving per unit?)
• If it had a short expiry date

“This tells us consumers take the time to assess the value being offered. That is not to say that price does not play a role, it does, but consumer expectations of the price are very specific. The survey showed that consumers interrogated the price of products on special. ‘Is it worth the money and will I have any regrets after buying it?’; ‘Do I get more for less?’ and ‘Is there a big difference in the original and special price?’ were common questions consumers asked when evaluating the price of goods on special.”

Adding value

“It comes back to value. South Africans want the savings they are making at the till to add value to their lives. These savings are only perceived as being ‘real’ when there is a sizeable difference in price, when the saving relates to a product consumed on a regular basis, and when more is offered (i.e. a bigger pack size) for the same price.”

Supporting this notion, the survey also revealed that consumers were increasingly doing pre-shopping research, using the internet, mobile phones, promotional advertising material and broadsheets. These have all become major sources of information on shopping specials, comparative prices and shopper alerts by consumers’ favourite outlets and were used by consumers before they left home to determine at which store to shop (even store-hopping, as a result of it) and to validate on-shelf prices when in-store. This was true across all LSMs.

Loyalty programmes and the lure of rewards or points also swayed store choice, whereas coupons had little influence over store and product selection, with a significant number of consumers saying coupons did not offer ‘real’ value or enough of a discount on regularly consumed products.

~GARETH PEARSON

*Value shoppers will be seeking in 2017, BMi Research, September 2016

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Say hello to the new South African shopper

Think you know South African shoppers? Think again. Recent shopper insights* research reveals local consumers have changed. A lot. And this radically redefined identity is tipped to gain significant momentum in 2017.
Local consumers are transforming before our eyes in response to squeezed household budgets. We are seeing fundamental behavioural shifts in the way consumers shop – before, during and after they hit the stores.

Pre-shopping trends
The biggest pre-shopping trend is planning. Consumers are planning their shopping trips more than ever before and 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, leave no room for impulse buys, are aligned to the monthly budget right down to the last cent, and are religiously adhered to (except in the case of onsite specials offering outstanding value).
That’s right, the new-look SA consumer is well informed, budget conscious, and demonstrates a refreshing sense of financial discipline that manufacturers and retailers would do good to take note of.
This flies in the face of what we have historically come to expect from South African consumers, who are notoriously poor savers and big spenders (using money they don’t actually have), but is a very strong driver that will continue throughout the next year.
Interestingly, all shoppers surveyed said they left either their children and or their spouses at home before heading for the shops. Why? The pester power factor and financially undisciplined spouses or partners posed too great a risk to the fragile monthly budget. This is a fascinating trend that demonstrates shoppers are consciously choosing to shop alone, and we expect it to gain traction in 2017.

In-store shopping trends
Inside the store, shoppers are filling their trolleys differently. Previously, brand loyalty was prioritised, but today shoppers are prepared to leave their old favourites behind as they gravitate towards other branded goods that offer increased perceived value or even private label products.
Where branded items still make the cut, smaller pack sizes are preferred.
The issue of perceived value will become even more significant in 2017, with the new SA consumer not only pursuing specials, but specifically multibuy offers that they believe provide good value for money.
Luxury items have all but fallen off the shopping list, with shoppers preferring to strictly spend their hard-earned cash on necessities. This trend will continue in the next year in the face of increased economic uncertainty. And while some shoppers will reward their frugality with treats, these will not be the big-ticket items of the past.
However, luxury items still have a (small) place when it comes to special occasions, with most shoppers not willing to comprise on top quality, luxury goods for special events.

Post-shopping trends
The biggest post-shop trend is seen in product usage. The new consumer is critically aware of wastage, using expensive products like toiletries sparingly; choosing frozen vegetables over fresh; reusing products more than once, like cooking oil, and finding innovative uses for everything from leftovers to the last dregs of soap. Multipurpose products are fast replacing multiple individual products around the home, and refill packages are in hot demand.

There is no doubt the recession chickens have come home to roost, and right here in our back yard, 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.

~GARETH PEARSON

*Value shoppers will be seeking in 2017, BMi Research, September 2016

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JackalBerry MTB Cycle Challenge 2016

The cyclists of the JackalBerry MTB Cycle Challenge 2016 raised over R300,000 for the Ubuhle Christian School, in Bronkhorstspruit. This achievement is another feather in the cap of a concept which evolved from a casual chat around a braai in 2010 and which has now cumulatively raised over R835,000 for the school.

The finish at JackalBerry Farm in Machadodorp

In November 2016, 43 riders participated in either the first or second day of this gruelling 277km race from Bronkhorstspruit to JackalBerry Farm, in Machadodorp, on 25 and 26 November, each wearing brand new kit from the sponsors 4PL, BMi Research, and Six Square Networks.

The money raised exceeds the group’s target by over R50,000 and the three main sponsors are ecstatic.

“This year’s race proved to be the most challenging to date so we’re extremely proud of the cyclists. The money will be used to build a new classroom for Grade 7 learners,” said Gareth Pearson, CEO of BMi Research. “We couldn’t have anticipated that the informal challenge set out around that braai in 2010 would be this successful. It is a terrific accomplishment for all involved.”

Ubuhle was founded in 2008 by local volunteers to assist orphans and vulnerable children living with farm workers in farming communities in the Bronkhorstspruit area. Today it provides a pre-school facility and an English primary school up to Level 3, after care, workshops and courses for
adults, as well as aid to develop new income sources for the 200 rural families living in the area.

2016 JackalBerry Team

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