Mind the gap: Consumers know what they want but businesses don't

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 as there was a surprising 4.1% increase in retail sales in Q2, and year-on-year, the category increased by 2% in the second quarter of 2024 compared with the second quarter of 2023[1]. Add the lower fuel price, less load shedding, a very welcome interest rate cut and access to the controversial two-pot system and consumers will be somewhat flusher – right in time for season.

But is your business ready to take advantage of this?

The 2024 South African Customer Experience Report – an annual, in-depth study among 2 000 online South Africans and over 70 businesses that 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 – says ‘not yet’.

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 the buyer and the 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,” says Reekie

“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[2] – and other day-to-day purchases instead of spoils like big-screen TVs,” Ahlfeldt concurs.

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 we are coining as the ‘SuperShopper’ is the growing cohort of consumers who now know how to find a great deal online” says Stewart. “In fact, according to Bob Group head of product Jaco Roux [3], retailers should be gearing up for a bumper Black November this year, as more consumers get comfortable with online shopping – and how to make it work for them.”

What can brands do to capture the additional spend in the economy?

Black November aside, to capture the increased share of wallet businesses need to get on the same page as their customers in terms of what they want and, more importantly, expect from the brands that they buy from.

Consider that according to this year’s Report, 63% of consumers said that price was the key decision-maker when it came to making repeat purchases from a brand while a significant 71% said it was their overall reliability.

On the flipside, the 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,” says Ahlfeldt.

Addressing this is critical, especially with less than a month and a half to go before 1st November when ‘season’ begins. For starters, brands must look carefully at their etailing 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.

“Of interest, the most patient consumers are those aged between 18 and 24 years. They are more likely to wait for up to 48 hours. This is contrary to their insatiable appetite for ‘now’ in every other aspect of their lives,” says Reekie.

Don’t forget the wow factor

The authors go on to say that the “surprise and delight me” factor has not disappeared, but brands have been less focused on this and more on getting sales in, any which way, due to the tough economy. Money-in has trumped memorability.

“However, having a unique customer experience (CX), where the prospective buyer receives exceptional service (from ordering online to the delivery, and after sales support) and experiences a moment of joy when receiving their purchase/s, pays dividends and brands are wise to introduce more moments of magic that make them stand-out from the local and international (think Temu and Shein) crowd,” says Stewart .

“With flusher shoppers ready to spend, brands now have an opportunity to make-up for lost time and revenue. “If brands don’t invest in these easy-to-instil factors, they will miss out on the retail boon that is set for the 2024/2025 season, and no business can afford that.”

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