Five consumer spending trends to watch out for in 2018
Top five trends which affect how consumers will spend their cash in 2018, according to GfK South Africa research into the country’s shopping habits.
Generations Y and Z, which account for nearly two thirds of the population are reshaping the country’s values as they come of age. They are driving values of ‘adventure, freedom, curiosity and authenticity’.
South African retailers and manufacturers face a significant shift in how consumers behave over the next few years, says RACHEL THOMPSON, writing for the IOL.co.za.
Her report looks at new research by GfK South Africa which says many South Africans are concerned about the future, with 46 per cent saying they are not very or at all confident and looks at how that is influencing their shopping habits.
“Meanwhile, Generations Y and Z, which account for nearly two thirds of the population are reshaping the country’s values as they come of age. They are driving values of adventure, freedom, curiosity and authenticity.”
Here are some ways that these social and economic trends will affect South Africans shopping decisions in the future:
1. Cocooning
Look after your customer and you will win their loyalty. Around 80 per cent of South Africans agree they are more concerned about the security of their personal information when shopping online than when shopping in a store, and 47 per cent 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
Make your brand a part of the consumers’ lifestyle.
GfK South Africa reveals that 50 per cent of South African 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 videogames, going to church or watching YV.
3. Instant everywhere
Consumers in 2018 expect instant satisfaction.
Around 57 per cent of South African respondents to our research say they need shops and services to be available at all times. Demand for instant access to services and products is even higher among people under 35.
Brands like Uber and Airbnb are setting a new pace for the customer experience. Consumers expect that products and services must be available when they want them – any time, any location, and on any device. Brands should focus on delivering slick, frictionless mobile interfaces that make it simple for consumers to access services and products instantly and everywhere.
4. Savvy shoppers
Loyalty is falling – price is king.
Some 70 per cent of South African consumers say they are less loyal to any one retailer, because they have to shop around more to find the best value.
South African consumers are coping with the difficult economic situation by shopping less frequently, spending less during each shopping trip and by buying bigger packs for better value. They are also becoming less loyal to brands as they seek out the best prices: 69 per cent agreed that the most important thing about a brand is that it offers good value for money.
And they are embracing the internet for bargain hunting, though their purchases may still be made in a traditional store:
- Interestingly 40 per cent check prices online but buy in a traditional store
- But 45 per cent said they use the internet to purchase a product
- Almost nine in every 10 people surveyed, said they use the internet to find products they want (if they have access)
- And 65 per cent have used a mobile phone to help them shop in the last six months, emphasising the importance of mobile presence.
5. Considered consumption
Being green is essential for business success.
Eco-citizenship is a high priority, with especially younger people recognising the importance of sustaining the planet so that they can have a prosperous future.
Consumers are increasingly aware on the impact they have on others and on the planet through the consumption decisions they make. South Africans in our research agree:
• I only buy products and services that appeal to my beliefs, values or ideals (54%)
• Where and how a product is made is very important to me (47%)
• Brands and companies have to be environmentally responsible these days (54%)
The report concludes: “To remain relevant in the face of these changes, brands need to realign their brand stories with consumers’ emerging needs and considerations. Those that get it right will be able to play meaningful roles in consumers’ lives and touch them with slick, seamless, and authentic solutions and experiences.”
