Snippets

Brand Atlas: The brand building power of your customer database – (14 September 2017)

Your customer database is potentially the most powerful weapon in your marketing armoury. You should be seeing the people in that database as important members of your “brand community” and start conversing with them as you would converse with your friends. Do this and amazing things start to happen.

A customer database is so much more than a tool to be used solely for promoting special offers and discounts. In addition to this it is as importantly a tool for brand building. (By brand building we mean the process of creating, reinforcing and changing perceptions about your brand in order to optimise the alignment of your brand with the needs of your customers.)

Most customer databases are only used to pump out special offers and to kick tiny percentages of each customer’s spend back to them. In other words they get used for the purpose of giving value away in the hope that customers will reward you with their loyalty.

The fact is you can’t build a brand on price alone. Yes, to some extent loyalty is earned by offering low prices and good deals, but mostly loyalty is earned by building your brand in the customers’ minds. Until quite recently, the route to brand building has been traditional media, but the internet has changed that. Traditional media audiences continue to steadily decline as consumers switch to the internet for their preferred content fixes. (Granted, there will always be people who read printed magazines and pandas are not extinct – though there are none living in the wild!)

Most marketers ignore the opportunity of building and using brand community databases for the purpose of engaging with their customers to build their brands in their customers’ minds. They only see the opportunity to boost short term sales.

Yesterday we published the 2017 Brand Atlas Retailer Loyalty Report – a thorough investigation of the impact on ‘most often store usage’ as well as on ‘brand perceptions’ of each of the major retailer customer programmes in South Africa.

The report proves that in most retail product categories, customer programmes do correlate with both ‘most often usage’ and ‘enhanced brand perceptions’. Some programmes do better than others on each of these aspects, and programmes like these do better in some categories (like grocery) than they do in others (like homeware).

We think that all South African marketers owe it to themselves to find out more about how brand community databases work and how to use them better to help build their brands in the minds of their target markets.


The top 10 things South Africans are doing to stretch their monthly incomes – (30 August 2017)

We are about to publish the latest Brand Atlas Frugality Report. This is a large sample (n = 8264) survey of economically active South Africans designed to measure the steps that they have already taken, or think they might take in future in order to make ends meet.
 
We devised 105 ways in which consumers could make their household income stretch a bit further and asked them to identify the ones they have already adopted, as well as those they may well consider adopting in future.
 
Here's a list of the top 10 steps which consumers have already taken - most of them are very rational and have to do with grocery expenditure:
 

  1. Eat more chicken
  2. Hunt for special offers before making a purchase
  3. Use more loyalty programmes / use them more often
  4. Cut back on convenience products like heat and eat meals
  5. Buy cheaper cuts of meat
  6. Buy groceries from cheaper stores
  7. Buy cheaper grocery brands
  8. Eat less meat
  9. Eat less fish
  10. Buy fewer magazines and newspapers

 
Now here's a list of the things that far more people would like to do in order to make their budgets stretch than have already done so. These are the things which people fantasise most about doing, but in all probability are far less likely to do:
 

  1. Move your home loan to a bank with a cheaper rate
  2. Raise cash by selling investment products
  3. Find ways to pay less tax
  4. Buy solar panels for your roof
  5. Replace your car with a motorbike or scooter
  6. Sell your house and buy cheaper one
  7. Join a lift club
  8. Rent your house to a tenant and rent somewhere cheaper yourself
  9. Spend more on the national lottery
  10. Use Uber / metered taxis more often

 
The report covers the consumers’ ‘frugality’ behaviours across these broad expenditure categories:
 

  1. Grocery shopping
  2. Banking and finance
  3. Deals and specials
  4. Transport and travel
  5. Health and grooming (including clothes)
  6. Home and garden
  7. Cell phones, the Internet and subscriptions
  8. Holidays
  9. Entertainment and leisure

Brand Atlas: Loyalty programmes and customer clubs - more than just nice-to-haves – (3 August 2017)

  

Analysis of the data we are using for our soon-to-be published report on loyalty/reward programmes has yielded some very interesting insights about exactly how these programmes work.

The bottom line is that they work extremely well. Here is a brief overview:

  • These programmes strongly engender loyalty in the sense that there is a definite statistical correlation between frequency of usage of a brand or service provider and ownership of their loyalty/rewards programmes. Loyalty/rewards programme members are far more likely to be most often users of a brand or service provider than those who do not belong to the programme.

    In this sense loyalty/rewards programmes do engender loyalty. People respond to being rewarded for their custom, but there’s much more to these programmes than the mechanism of simply kicking back a percentage of the member customer’s spend. 
  • Effective loyalty/reward programmes work exactly like clubs. Aside from the obvious kickback mechanism, they afford special and varied privileges to club members like opportunities to win prizes, preview new ranges, get interesting curated news and information and access member-only special deals - not only discounts on stock items but special offers on other things too like insurance, holidays and anything else you can imagine. Some programmes do better than others at leveraging their programme in ways like this.

    Clubs like these enable the brand or service provider to engage with customers on an ongoing basis in many different ways and to develop meaningful and personalised relationships with customers. In the digital era which is busy putting traditional media to the sword, a club like this is almost an essential for any and every brand or service provider.  
  • Because of the ongoing engagement, club members are also far more likely to rate a brand or service provider much higher on offering good value for money than those who are not members. In fact, club members are more likely to rate the brand or service provider much higher on all other attributes relating to things like range appeal, service delivery, quality, aesthetics and the rest.


Should brands be seen and not heard? – (6 June 2017)

On a recent trip to the bush it occurred to me that for all creatures other than birds, the best strategy for survival in the wild is to keep dead quiet. Making noise attracts the attention of predators which inevitably leads to a brutal and premature death.

I pondered whether a strategy of silence has any merit in the competitive world of brands where the generally accepted rule is that those who make the most noise, win. Spending large sums to make a lot of “noise” via the media is still generally accepted as being the best way to build a brand. At face value, quietly going about your business and consciously staying off the radar doesn’t seem like much of a marketing strategy at all.

Yet amidst the cacophony of advertising in the world, there are silent brand giants out there who do just that. When last did you see or hear any advertising for Rolls Royce, Ferrari, Google or facebook? It’s not true that you have you make a lot of noise to cut through the clutter and be noticed.

Now we know that consumers don’t like advertising and we know that millennials and generation Z’s in particular don’t consume traditional media (or consumer very little), so maybe keeping quiet is becoming increasingly important. Perhaps it’s more important to be seen and not heard. Come to think of it, it must be better for a brand to be seen to be actually doing things rather than a brand that simply shouts what they are capable of to the world at large. It’s a case of “stop telling me how funny you are and get on with making me laugh”.

Brand Atlas provides clear insights about how the internet has changed the rules of marketing communication. Consumers are just not as involved with traditional media (both print and broadcast) as they used to be, and each year they are becoming less and less involved.


The better you understand your customers the greater your chance of meeting their needs – (31 May 2017)

Brand Atlas is a tool for marketers designed to give them the ability to describe specific customer segments in a very high level of detail.

Whilst marketers spend a lot of time, money and energy on conceptualising a segmentation model for their markets, not enough time gets spent on gathering intelligence and developing a deep understanding about the segments that they have defined.

The chances of satisfying the needs of a specific target market segment are greatly enhanced if the product and service offerings to that segment are based on a thorough understanding of their attitudes and behaviours. It’s really helpful, if not essential, to know as much detail as possible about:

  • their demographic and psychographic profiles
  • their attitudes and philosophies about life
  • their geographic locations
  • where they shop for a variety of different product categories (from groceries to electronics)
  • what they look for from retailers
  • the consumable brands they buy
  • their involvement with loyalty programs
  • how they invest and look after their money
  • the sources they go to for information about the topics that interest them (media)
  • how they use the Internet (what they do, the portals they use, the devices they use)
  • the vehicles they drive and how they look after them

Brand Atlas is a large sample (n = 40000+) survey conducted amongst economically active South Africans – those who account for 80% of household income and expenditure.

If you work in in product management, advertising, media planning or marketing research you should take the time to have a look at the scope of Brand Atlas Data and find out how you can access it on your laptop.


A marketer’s guide to South African generation Z – (30 May 2017)

Right now there’s more and more talk about generation Z in marketing circles. We are planning on doing a major study into the doings and screwings of generation Z later this year but before we do we thought we’d take stock of what we already know about this group from Brand Atlas data.

What follows is not a thesis about generation Z. Rather it is a mind dump of disassociated thoughts which give you a murky view of how generation Z’s are different from the rest of the population.

  • Because they are younger they are slimmer, happier with their looks and less likely to go to the doctor or dentist.
  • They are poorer and less likely to own property. They’re more likely to be flat dwellers living in rented premises (which they regard as being too small). They’re more likely to have savings accounts and far less likely to be making any kinds of investment.
  • They more likely to describe themselves as being honest, intelligent, confident, fun, sociable, spirited, modern, imaginative, charming, fashionable, liberal minded and sophisticated.
  • They’re less likely to smoke or to have ever smoked. They’re more likely to run and go to the gym to stay fit, and they’re more interested in sport. They’re more likely to say that they are stressed but at the same time they’re also more likely to say that they happy – so they feel happy about their stress!
  • They feel more in control of their destiny than the rest of us do, and they feel more spiritual.
  • They love eating out, buying fast food and are also more likely to drink vodka and cider (not mixed) than the rest of us. They are more likely to buy their booze at Tops.
  • They’re more interested in fashion and skew towards shopping for clothing at Edgars and at Mr Price but also shop at Truworths, Markham, Jet and Cotton On.
  • They’re more likely to want to end up running their own businesses and they plan on retiring sooner than the rest of us.
  • When it comes to mobile devices although they still mainly own Samsungs and iPhones they skew significantly towards owning a Huawei device. They’re far more likely to have a prepaid mobile and can be tempted to switch service providers for cheaper data.
  • They skew strongly towards accessing the Internet via their mobiles. They are far less likely to do transactions online (probably because they are less likely to own a credit card). Generally, they don’t by tangible items online, but they do buy airtime and data online.
  • As you would expect they are big on social media – all the usual suspects - Facebook, Twitter and YouTube, but have significant skews on Instagram and Google+.
  • When it comes to chat apps, nearly all of them use whatsapp and they skew towards being Snapchat users too.
  • They are far more likely than the rest of us to use uber - presumably because they’re far less likely to own their own motor vehicles.
  • Very few of them read printed magazines or in fact magazine content online. Magazines are not on generation Z’s radars and of the few who do read magazines the majority claim to be reading them less often now than they were a year ago.
  • The same is true for newspapers – they don’t read them nor do they read newspaper content online.
  • They skew strongly towards sourcing information about the topics that interest them on the Internet – no surprises there.
  • Very few listen to the radio and those who do claim to be listening less often now than they used to in the past.
  • It’s the same with TV. Very few watch it regularly - this probably has more to do with the fact that they cannot afford a DStv subscription coupled with their busy social lifestyles than it has to do with a dislike of television. They’re more likely to stream video on demand in order to watch the things that they want to watch when they want to watch them.
  • Finally they’re far more likely than the rest of us to go to the cinema.

These insights are a tiny taste of the types of insight that are available in our large sample brand Atlas database. Brand Atlas is a tool for marketers designed to facilitate a detailed description of defined customer segments across multiple markets.


Opportunity: Average young black South Africans are internet starved – (27 March 2017)

We checked Brand Atlas data to see if it’s true that people who have stopped reading magazines are also the ones who have stopped reading newspapers and found that this is only partially true. There’s not as strong a correlation between lapsed magazine readers and lapsed newspaper readers as you might have thought.

While checking this out we stumbled across something that’s looks interesting and is worth reporting. The consumer segment that is the least likely to lapse magazine or newspaper readership is young black people!

This surprised us. Our first thought was, ‘if this is true, where are the magazine and newspaper titles targeted at young black people?’ Do they even exist? And if not, why not?

Then we thought ‘if there are no (or only a few) titles for this segment, why is it that they are the segment that is the least likely to lapse magazine and newspaper readership?’ We think that the answer lies in an appreciation of the fact that it is the internet that is killing off magazines and newspapers and that the internet is something that is not readily accessible to the average young black person. They might have the smart phones but they can’t afford costly mobile data or uncapped fixed line data at home.

If you don’t have an adequate data allowance you need to get content somewhere other than the internet – magazines and newspapers. There may be opportunity for publishers to look for opportunities here and if you’re targeting young black people with your brands, more newspapers and magazines might be a good idea for you next media schedule.

 

There's more to value for money than low prices – (23 March 2017)

A look at Brand Atlas 2017 data shows us that in 6 retail categories (grocery, apparel, homeware, “sports equipment and clothing”, family restaurants and “health, grooming and beauty”) value for money ranks in the top 3 customers’ reasons why people shop where they do.

But what exactly is “value for money”? That which constitutes value in the context of grocery retailing is very different from that which constitutes value in the context of apparel retailing. Grocery shoppers’ favour, inter alia, stores that are conveniently located and stock good quality fresh produce, while apparel shoppers’ prefer stores that stock their taste and have clothes that fit their body shapes.

  

Understanding the elements of the consumers’ perceptions about value for any given brand is a tricky business which marketers really need to get their heads around. Inevitably, the brands that are perceived to do the best job of satisfying the consumers’ needs at a “fair” price will be perceived to be the ones that offer the best value for money.

In order to understand this equation it is imperative for marketers to have a good understanding of:

  1. The needs of their customers in each of the categories they operate in;
  2. How well the customers perceive that each of the competitors satisfies their needs.

The better the job of being seen to satisfy customer needs, the better the rating on value and ironically, the better the chances of charging premium prices which are still regarded as being “fair” prices.

(Whether honestly or trickily) brands are designed to add value to products over and above their intrinsic worth. A brand adds power to a product in the following ways:

  1. Solution power – the brand works better for you than the others do;
  2. Connection power – the brand is used by people you admire;
  3. Feel good power – the brand makes you feel good about yourself.

A combination of understanding the customers’ needs (and how well each of the competitors is perceived to match them), and brand building are the necessary ingredients for creating perceptions of good value for money.


Marketing research respondent panel just ain't random enough – (22 February 2017)

Across the globe market research practitioners have adopted the practice of establishing and grooming panels of respondents to complete online surveys.

Yet it was only a few years ago that researchers were required to screen respondents as being people who have not participated in a market research survey within the past 12 months.

The reason for this screening requirement had its roots in an appreciation of the fact that unless respondents are selected on as random a basis as possible, there is more than likely going to be a significant skew in the research findings.

To put it another way, the market used to be very averse to professional respondents (who we call lab rats), but for the sake of getting faster and cheaper surveys they are now prepared to accept a convenience sample of professional questionnaire completers, and forgo the quality of the survey data.

The last thing you want in a survey is a bunch of respondents who regularly get paid fees or rewards for filling in questionnaires. Ideally what you need is randomly intercepted respondents who have never been interviewed before – never mind lab rats, you want virgin rats.

The fact is, panels just ain’t random enough which is why we don’t use them.

The old toppies are ruining Facebook for generation Z – (1 February 2017)

According to the latest Brand Atlas findings, Facebook looks like it might be in decline amongst generation Z (people born between 1995 and 2000). So the generation that’s the most comfortable in the online world is less likely than the baby boomers, generation X and the millennials to be on Facebook. There’s not a big gap but it’s significant - only 69% of generation X use Facebook, versus 74% of baby boomers.

Now by our experience as soon as the old toppies adopt something the kids do, the kids run away from it. Some examples are tattoos, leggings, hair gel, long shorts, using the word “cool”, using iTunes, taking selfies and maybe even being on Facebook too. As soon as mom and dad started using or doing anything that the kids did, those things became “uncool”. Want to stop your teenage son wearing his cap back to front, or wearing a man bun or clubbing so much? Just start doing these things yourself. That ought to do the trick.

It’s not that generation Z are not on social media, they are – big time. The older generations tend to favour and use one platform only while generation Z uses multiple platforms depending on their current need. So aside from avoiding doing the things that older folk are doing on social media, Generation Z want social media platforms to deliver specific messages to specific people at specific times. Facebook’s not good for that.


The strategy of ignoring problems – (19 January 2017)

The strategy of ignoring problems because they are more likely to wane than wax, is not a good one. While there’s a fine line between being paranoid and being circumspect, ignoring possibilities without first carefully considering them is just obtuse and maybe even stupid.

Over the years we have encountered several instances where ignoring problems has led to red faces and badly bitten backsides.

The first that comes to mind was around 1990. We were doing market research for SA’s then biggest apparel retailer. They were scornful of a new brand that had just achieved a spontaneous awareness level of 5% and their incumbent managing director made a statement along the lines of “they are a bunch of fly-by-nights who will be out of business in 5 years”. The brand he was talking about was Mr.Price who 20 years later were seriously challenging for the position of number one apparel retailer in SA.

Snap to 2017 where ironically enough Mr.Price, and many of the big players in the apparel retail market, are showing signs of deploying the ‘ignoring problems’ strategy again. This time they are choosing to ignore Pick n Pay Clothing who are now the fourth best penetrated apparel retailer behind Edgars, Woolworths and Mr.Price. The apparel retailers only see the new ‘sexy’ brands like Cotton On, H&M and Zara as the new important players – Pick n Pay Clothing is just a bit too infra dignitatem (infra dig) for them to contemplate.

The same thing is happening in the automotive world where the mainstream manufacturers don’t appear to have any of the Chinese or Indian marques on their radars.

The message is ignore your competitors at your peril. It makes better sense to find out what your target market customers think of them before you write them off and choose the ‘ignore the problem’ strategy.


South African heavyweights - post festivity blues – (17 January 2017)

If you need to shed a few kilos to be able to fit into your clothes, you’re not the only one.

The Brand Atlas 2017 survey findings tell us that only 34% of economically active South Africans (those living in households with a monthly income of R7 600 or more) have an “ideal” Body Mass Index (BMI).

  • 2% are underweight (with a BMI of less than 18.5).
  • 35% are overweight (BMI of 25 to 30).
  • 29% are obese (BMI of more than 30).
  • At 72% men are much likely to be overweight / obese than women at 56%.
  • At 69% those over the age of 34 are overweight / obese compared to only 51% of those below that age.

Despite their problem with podginess South Africans have really high expectations about how long they are going to live. Only 35% reckon they won’t make it to 80, 26% are aiming on reaching 90 and 8% are striving to reach 100 or more! (According various sources life expectancy in South Africa is only 61.)

Add to this the fact that only 39% of us are unhappy with our weight and you get the picture that a lot of us have some really unrealistic expectations about health and its relationship with longevity.

  

Brand Atlas is a tool designed for marketers to facilitate rich and colourful profiling of defined customer segments beyond the usual demographics ‘hygiene factors’. The survey is packed with tons more interesting and revealing insights about the users of hundreds of important South African brands.


People who drive German cars are just different from the rest of us – (22 November 2016)

If Mr BMW had to walk into the room, what type of person would he or she be? I bet you're thinking they’d be somewhat debonair, perhaps a bit arrogant and probably confident. Brands have distinctive personalities in the same way that people do. Brand personalities are an extremely important component of what constitutes a brand. They are powerful differentiators in many markets.

  

We did a small analysis from our Brand Atlas data where we measured how respondents describe their own personalities. Then we had a look to see if there were differences between the owners of one car brand and the owners of another.

  

Not many motorcar brands are differentiated on personality attributes. The exceptions to the rule are all of the German brands – Audi, BMW, Mercedes-Benz and Volkswagen. (By the way Toyota is not differentiated at all on any of the personality attributes, which just goes to show that a brand which is differentiated on personality attributes is a nice-to-have rather than a need-to-have.)

Audi and BMW are almost identical in terms of how their owners describe their own personality – intelligent, confident, successful, modern, athletic, healthy, liberal minded, fashionable and upper-class. In addition to these, BMW owners add sociable and sophisticated for good measure, and Audi owners add tough to their list.

  

Mercedes-Benz owners describe themselves as being trustworthy and responsible, honest, warm and wholesome, confident, sociable, successful, charming, sophisticated and upper-class. A more grown version of the Audi and BMW personality types (and very similar to Woolworths shoppers).

  

Volkswagen is the least differentiated of all of the German motorcar brands, but owners describe themselves as being down to earth, fun and cheerful, sociable and outgoing as well as fashionable.

  If you're interested in understanding the personality of your brand, there is a good chance that we have already measured it in our Brand Atlas survey which is in field right now.


Newspaper are no longer an important source of news – (16 November 2016)

Brand Atlas data has started to come in and we have started sifting through if for interesting snippets.

Only 56% of economically active consumers (those living in household s with a monthly income of more than R10000) occasionally or regularly read printed newspapers, and of those who do, 52% claim that they are reading them less often now than they did “a few years ago”. So readership continues to decline.

This chart shows where South Africans are going to get news – and it’s not newspapers!

So to summarise – nearly half don’t read newspapers at all any more, their numbers are dwindling, and more people read newspapers than use them as a source of news. The entertainment and commentary components of newspapers, rather than hard news, is what’s keeping them alive.

Now have a look at millennials:

Here’s where millennials are going to get news – and again it’s definitely not printed newspapers!

Only 32% of them occasionally or regularly read printed newspapers, and of those, 50% are reading them less often, and just over half (53%) are reading them for news.

Nearly twice as many of them read the online editions of newspapers than read the printed editions. Millennials are strongly connected to the internet for their news, and just look at how important sharing news on social media is for them.

Try to imagine what this picture will look like for generation Z (the generation after the millennials).  Not a pretty picture for printed newspapers!


Strong signals that the internet will eventually kill printed magazines

– (8 November 2016)

Be careful about how you spend your money on print advertising. Brand Atlas core data has started to come in and we did a quick analysis of where consumers are going to get content for the magazine categories they are interested in. (by the way, the average number of sources of content across the categories is 3.1)

Across the 15 categories we probed, the internet is the primary source of content for all categories but one, namely “entertainment, celebrities and gossip” where TV narrowly beats the internet. In not one of the categories do printed magazines come out tops, but they do fare better in some categories than in others.

The only 5 categories where printed magazines come fairly close to the internet as a category content source, are “home décor and gardening”, “farming”, “female interest (fashion beauty etc)”, “cooking and home entertaining” and “motoring”. But even in these categories the internet still has a significant lead.

The categories where the internet is very far ahead of printed magazines are “business”, “sports and hobbies”, “finance and investment”, “science and technology” and even “travel”.

There is no doubt that printed magazine publishers are being eaten alive by the internet, but what strategic options do they have? Assuming that shutting up shop is out of the question, the only option must be for them to go fully digital. You can’t beat them so you have to join them. Create a beautiful website, attract free subscriptions with compelling content, develop an app and get it onto every smart phone in the country and embark on a social media strategy designed to engage with readers in a two way dialogue in order to win their hearts and minds.

Not an easy ask, but that’s the sort of approach that is necessary for magazine publishers to survive.

Brand Atlas will be completed by the end of the month, and we would love the opportunity to show you the full story about print media and where it’s headed.


An idiot’s guide to brands – (13 October 2016)

A lot of people seem to be pretty confused about what a brand is.

A Gucci T-shirt sells for hundred times more than a Mr Price T-shirt. Why does this happen? Is it because a Gucci T-shirt is a hundred times better made, or made with materials worth hundred times more? Or is it because people perceive that a Gucci T-shirt is well, just worth a hundred times more to them than a Mr Price T-shirt?

The answer is that people perceive that the brand name Gucci adds value to a product over and above its intrinsic physical worth. In other words the brand name Gucci adds extrinsic value to a product. It is this extrinsic value that is the stuff of brands.

When measuring how brands are positioned in the minds of consumers, it is critically important to remember that the primary measures required are extrinsic, rather than intrinsic measures. If the brand is a motor vehicle it won't help to attempt to measure the brand reputation using intrinsic measures like 'has a steering wheel', 'has a driver's seat', 'has an engine' or 'has brakes'. All of these measures are common to all brands.

The only measures that count are the extrinsic measures - 'exciting to drive', 'latest technology', 'best safety features', 'beautiful looks' and the like.

Successful brands are well differentiated from their competitors. Differentiation is the key to brand survival and growth. In just about every instance brand differentiation has its roots in extrinsic rather than in intrinsic consumer perceptions.


The real reason why many people don’t shop online – (12 September 2016)

We recently came across a rather obvious but interesting notion. If you ask people whether they shop online, they automatically make the assumption that you’re talking about shopping online for tangible items that need to be delivered to them. Many will tell you that they don’t shop online but when you interrogate them further you discover that they do in fact shop online for intangible items like airline tickets cell phone airtime, electricity and movie tickets.

In a recent large sample survey (11828) we discovered that amongst “non-online shoppers” - that is to say, those who do not shop online for products that need to be delivered to their doors, 64% of them actually do shop online for intangible items.

That so many “non-online shoppers” happily shop online for intangibles indicates concern about delivery and exchange problems associated with purchasing tangibles online. It is most commonly believed that the reason why “non-online shoppers” don’t shop online is because they are worried about making payments online. It turns out that this is not the main reason at all.

Assurances and guarantees that the correct products will be delivered on time, at no charge, in perfect working order and assurances that the products will be efficiently and accurately exchanged if necessary, are the keys to converting “non-online shoppers” to online shoppers.

We have a really interesting and thorough dissertation on the topic of online shopping. We are able to filter the findings through users of nearly all of the major South African retailers.


Falling customer satisfaction ratings and disruption – (30 August 2016)

If you look at how consumers rate their levels of satisfaction with a cross-section of the different products and services they use, you will see that the cellphone network operators are at the bottom of the satisfaction pile. Even the banks are more loved.

If you regard a low level of satisfaction with a product category as an indicator of how well the category is perceived to be satisfying customers’ needs, then the cellphone network operators look ripe for a disruption.

Quite simply, consumers think they charge too much as witnessed by the enormous profits that they make notwithstanding the vast amounts of money they spend on marketing.

Telkom Mobile (8ta) is the only network operator brand that is bucking this weak satisfaction trend. Compared to the other network operators they are perceived to be making a real effort to make wireless communication affordable to everyone. They are offering generous data bundles, free SMS, free instant messaging service (e.g. WhatsApp) calls, free Wi-Fi hotspots and free Telkom to Telkom calls to their subscribers.


Why are so many people interested in “mobile surveys”? – (23 August 2016)

The market research world is abuzz with the topic of mobile surveys. The advent of smartphones has put the Internet into the pockets of millions more South Africans. Prior to smartphones most South Africans could only be interviewed face-to-face for the purposes of market research. Whilst it is still true that most South Africans do not have access to the Internet, it is also true that just about every single economically active South African now has access to the Internet and is therefore available for inclusion in online surveys on their smartphones.

If you're interested in running a mobile survey then you should consider some of the advantages and disadvantages before diving in.

Some advantages

  • Relative to other online platforms, smartphones offer the opportunity to reach potential respondents who are not tuned in to email. (Millennials are an excellent example of a segment that is not tuned in to email.)
  • Relative to other online platforms, surveys completed on a smartphone can be done more easily "on the hoof". This gives the respondent greater flexibility to complete a survey at a point and place in time that suits them best. (Arguably the same applies to tablets and laptops.)

 Some disadvantages

  • For a survey administrator it's not easy to ensure that the survey software is compatible with each of the different brands of smartphone. This can result in surveys being skewed towards owners of certain brands of handset.
  • Smartphones are not a good platform for lengthy questionnaires. Respondents can easily be distracted in the middle of the survey by notifications from the multiple apps that most smartphone owners have on their phones. This results in a large proportion of respondents not completing the survey.
  • For many smartphone owners the cost of data or the lack of availability of free Wi-Fi puts them off even considering completing questionnaires on their smartphones.


Buy market research direct – cut out the middleman – (16 August 2016)

You wouldn't go to the hairdresser to have your teeth straightened. You'd have to have a screw loose to get your car serviced by a carpenter and you wouldn't buy your vegetables from a bottle store.

So why do some of you go to an ad agency to buy your market research? If you don’t brief your research through the ad agency, pat yourself on the back and stop reading this snippet now!

In 30 years of practice we've never had a single client come to us for an ad campaign yet at least twice a week we get briefs from ad agencies for market research that their clients need. Ad agencies don't do the market research (because they can't), they just subcontract it to a market research agency, (and presumably mark up the cost so that they actually make more profit than the research agency does!).

We understand that some market research users are nervous about things like statistics, research design, research methods and methodologies, data analysis and the interpretation of survey results which is probably why they brief their ad agency to interface with the research agency in the first place.

We're not saying it's wrong to brief research through your ad agency, we're saying it's better to cut out the middleman and brief the research agency directly or at least have us in the room when you are briefing the work. We research agencies have no vested interest in the outcome and findings of market research and for this reason are better placed than any ad agency to be able to objectively interpret survey findings.


The renaissance of sales promotion – (10 August 2016)

Back in the 1980’s conventional wisdom had it that advertising built brands whilst sales promotion stimulated brand purchase. Improved brand image led to improved brand equity which in turn created an improved climate within which to sell. Sales promotions were designed to cash in on an improved sales climate.

The advent of “new media” changed this classical approach. Marketers expected that just by talking to (or is it at?) consumers and “engaging” with them in “conversations” about their brands it would no longer be necessary to follow the classical approach of building an appealing brand image and using tangible sales promotions to lubricate brand sales.

We are seeing strong evidence in many of our surveys of the fact that economically stressed consumers are bargain hunting, participating in sales promotions, looking for rewards for their custom and entering more competitions than they have since the 1990’s.


Fun facts about those of us who are bit overweight – (1 August 2016)

The recent BMI survey (n = 11 828) shows us some fun facts about the 60% of economically active South Africans whose BMI indicates are overweight.

  • They are more likely to be better off than their underweight cousins
  • And more likely to worry more about what’s going on in the world (probably because they are also more likely to keep up to date with the news)
  • They are more pessimistic about the future
  • They are more likely to gamble
  • They’re more likely to drive a Toyota than a Volkswagen
  • And they are more likely to eat a traditional Sunday roast (and eat at KFC!)


How do South African consumers really feel about making payments online? – (30 June 2016)

These days more and more purchases require online payment. Paying online is more convenient for the purchaser and better for the profit margins of the seller. But the media is full of horror stories about a cybercrime underworld that preys on hapless online shoppers using techniques like phishing, identity theft, hacking, and data theft. Estimates of the global value of cybercrimes vary enormously ranging from $450 billion a year to $2 trillion a year – and growing.

These are sensational numbers that make most consumers wary about flashing their cash on the internet, but just how many South African consumers make payments online and how wary are they?

According to the Online shopping survey (n = 11828) 59% of economically active South Africans have ever made a payment online – regularly: 13%; occasionally: 30%; hardly ever: 16%. So 41% have never made an online payment.

Of those who have made an online payment only 38% feel very or quite comfortable about it, with rest feeling unsure (28%), not very comfortable (25%) and not at all comfortable (9%). So a very large portion are fearful about making online payments even though they do it.

Consumers need strong assurances from a vendor that the payment system is impenetrable by cybercriminals. This is really important. Also, consumers are far more likely to feel comfortable shopping from vendors who have been around a long time and have physical stores that they know they can visit at any time.


96% of South Africans are budding entrepreneurs – (29 June 2016)

Humans are hardwired to resist cutting back on their lifestyles. Lifestyles are only meant to get better and better – never worse.

In the recent Frugality survey (n = 11828) we see that a whopping 96% of economically active people who aren’t already doing so like the idea of starting an income generating sideline as a way of helping to make ends meet in these tough economic times. (Generating additional household income as a way to make ends meet comes second only to the idea of saving money on grocery spends.)

With so many budding entrepreneurs around it’s a wonder that our economy isn’t booming. Government is doing nothing to reward the endeavours of budding entrepreneurs and financial institutions do very little to help them out of the starting blocks. The government recognizes the potential for the development of small businesses as a way to stimulate economic recovery and growth, but unless they do something to make it happen, the enthusiasm of budding entrepreneurs will come to naught.


And the point of POPI is? – (28 June 2016)

In our recent online shopping survey (n = 11 828) we asked respondents how they would feel if they had bought a TV set from an online retailer, and a few days later the same online retailer was sending them advertising messages for blue Blu-ray players, TV stands and other TV accessories.

We anticipated fairly high levels of paranoia from respondents who we thought would feel that they were being spied on by the online retailer, but that's not what we found.

46% selected the option "it wouldn't mean anything to me". 31% selected the option "I would be impressed that they're attempting to sell the things to me that they know I'm interested in right now" and only 22% selected the option "I would feel distressed that they are spying on me so that they can exploit me."

Far fewer people are worried about the idea that Big Brother is watching them than we imagined. This insight begs the question - what is the purpose of POPI? If it's to protect consumers from their personal details being used by marketers who bombard them with advertising messages then it is a waste of time because most people feel they don't need or want this protection. Provided marketing messages are relevant to the needs and wants of the consumer, most are quite happy to receive them.


Are printed magazines doomed to failure? – (27 June 2016)

From BrandMAPP (a very large sample survey of 27 000 economically active respondents) we see that 28% no longer buy and read printed magazines, (for 16 to 24 year olds it's 38%) and 39% say they are buying them less often that they were a year ago.

From the same survey we see that 34% of respondents read magazines online, so there is little doubt that the internet is killing magazines and apps like Flipboard (if you haven't already tried it, you should) are rapidly hastening the demise of printed magazines.

To make matters worse, in our frugality report (n = 11828 economically active respondents) we see that a 48% of respondents who still buy and read printed magazines see sense in the idea of buying fewer magazines in order to save money.

Unless magazine publishers make a serious effort to draw readers to their content on their websites, it's a very bleak future indeed for the magazine industry.


Online shopping and instant gratification – (24 June 2016)

According to Urban dictionary instant gratification is defined as "the quick attainability of happiness or of contentedness". We humans are programmed to want to satisfy our needs, wants and urges immediately, but we are taught that delayed gratification is a virtue.

Our digital devices have greatly exacerbated our desire for instant gratification – they are with us all the time and they give us constant connectedness so we are able to get stuff as soon as we want it.

Our digital devices have shortened our patience threshold – we want everything now!

In our recent survey about online shopping we asked respondents to what extent they agree with the idea that one of the downfalls of shopping for tangible items online is that you don't get your hands on purchased items immediately. Nearly half (46%) agreed with this proposition, around a quarter (28%) felt neutral about the idea and the rest (25%) disagreed.

The results highlight an interesting paradox. Shopping online for tangible items promises instant gratification in the sense that you can buy the item immediately, at any time and from any place. But when it comes to fulfilment, gratification is delayed. Half of our sample agree that this is a problem with shopping online for tangible items.

It's worth noting that this problem doesn't exist when an online shopper is shopping for intangible items – for example, cell phone airtime, software, airline tickets or electricity. Intangible items are delivered instantly and the promise of instant gratification is complete in all respects.

It would seem to make sense that any online retailer should be offering both tangible and intangible products on their online shopping websites so that their customers can achieve the instant gratification that so many of them desire.


How well do you understand the demography of South Africa? – (23 June 2016)

Based on the census 2011 data, it is estimated that there are 15 million households in South Africa. 

70% of households exist on a monthly income of less than R6400 a month. On average each household comprises four people. That means there is just R1600 per person per month - or R53 per person per day for food, clothing, shelter, transport, education, health and electricity with very little left over for non-essentials. In fact, it's hard to imagine that there is anything left over at the end of each month in these households. These people are poor.

According to Unisa's BMR the poor in South Africa account for only 20% of household income and expenditure. The remaining 80% of household income and expenditure is attributable to the 30% of households with a monthly income of more than R6400 a month. We call these people the economically active.  

The advent of smart phones means that nearly all economically active South Africans now have access to the Internet. From a market research perspective this is really important. It means that we are now able to reach online all of the people in South Africa who account for 80% of household spends.


The dawning of the age of frugality – (22 June 2016)

In our recent frugality survey (comprising 11,828 economically active South Africans) we discovered that 40% of respondents do not have any money left over after paying all their bills. This is a good measure of just how hard pressed South African consumers are right now. (We define economically active South Africans as being those who live in a household with a monthly income of R10,000 a month or more. By this definition, 30% of South Africa's population are economically active. The remaining 70% are already living hand to mouth - arguably for them things have never been anything but terrible, and cannot possibly get worse.)

60% do have money left over after paying bills. But just how much do they have left over? Well, the answer is, not very much at all. In fact the average is only R2500 a month. There's just not much fat in the system.

Our frugality report goes on to expose in detail just how financially stressed South Africans are going about the business of making their Rands stretch as far as possible.

Fears about online shopping – (21 June 2016)

From our online shopping survey we see that when it comes to shopping online for tangible products, the biggest worry that shoppers have is the concern that that there will be something wrong with the delivered product that will necessitate it having to be returned.

Following this concern, is the uncertainty around delivery – where will I be when my delivery arrives, and how long will I have to wait for my delivery?

Both current and prospective online shoppers need to be reassured that the process of delivery and return is efficient, accurate and painless. Online retailers would be better off reassuring their target market of this rather than ramming unwanted offers down their throats on a daily basis.

Online shopping trolley abandonment – (20 June 2016)

59% of online shoppers have abandoned online shopping transaction! That’s according to our online shopping survey of 11 828 respondents.  

That's a lot of sales that never happened. Finding ways to stop transaction abandonment is an imperative for any online retailer. Finding solutions to the problem lies in understanding why people are abandoning in the first place.

  

The single biggest reason given for abandoning an online purchase transaction is unexpectedly high shipping costs. In a competitive environment where everybody else is offering free delivery and you are not, it's going to cost you dearly.

The next reason given is as old as the hills for any retailer – out of stock of wanted items. If the item is out of stock then remove it from your website or face the consequence of irritating your customer.


Good growth in the penetration of online shopping in SA – (17 June 2016)

In our online shopper survey with 11,828 respondents, we discovered that 30% of people who shop online for tangible items only started shopping online in the past 12 months. In an economy where most sectors are showing sluggish growth of around 5% or 6% (if they're lucky), then a growth rate like this really stands out.

The penetration growth of online shopping is more noticeable amongst black consumers as well as females than it is amongst the other segments. The advent of smartphones has put the Internet into the hands of many more South Africans and this in turn is enabling them to shop online.

Another factor driving better penetration of online shopping is the increasing number of bricks and mortar stores offering an online shopping platform. Many prospective online shoppers feel more secure shopping online with a store they know and trust than through a website of a retailer with no physical presence.

 

Smart phones are the future for online shopping – (15 June 2016)

Although 79% of online shoppers say that a website on their laptop or desktop is their preferred platform for shopping online, 58% say that they have used a smart phone to shop online and 65% say that they very or quite likely to shop online using a smart phone in the next six months.

What's more, 56% of online shoppers have used a mobile app to shop online. So there are two golden rules for online retailers:

  
  1. Make sure your website is mobile friendly.
  2. If you haven't already got one, develop an online shopping mobile app for your customers.
 

Here’s how South African consumers are planning to save money as living costs continue to rise – (14 June 2016)

70% of households in South Africa somehow manage to survive on less than R5000 a month. Arguably things can’t really get much worse for these people who have probably already done everything they can to cut back on the expenses that go beyond the basic necessities of their frugal lives.  

But what of the remaining 30% of households – those that account for at least 80% of SA’s household income and expenditure – what are they doing to cope with the rising living costs in South Africa today? They have discretionary income and have choices about which product and service providers to use and where to go to find cost saving opportunities.

  

It’s in economic times like these that consumers are most prone to switching products, services as well as product and service providers.

  

In a new report from All Told, we take a close look at how economically active South Africans plan to make the changes necessary to sustain an acceptable standard of living for themselves. And we get to grips with identifying opportunities for businesses to survive and thrive in the face of the looming swell of consumer switching behaviour. The report is based on a survey of 11 858 economically active South Africans.

  

Here are some of the key themes that emerge from the report:

  • For many consumers, it’s back to basics. No more frills no more luxuries just the things they need (with a bit of fun on the top).
  • As always, but now more than ever, consumers are looking for value, value, value!
  • Consumers will go to extravagant lengths to make sure that the general living standard remains as close as possible to what it is now. People want to cut back, not cut things out of their lives.
  • Consumers have trained themselves to use information sources – in particular the Internet – to research and find the best deals before buying most things.
  • In many product categories we see the consumer’s willingness to switch from one service provider to another they perceive they getting a better value or a better deal.
  • Family, health and home are sacrosanct. Charity begins at home. Cutting back in these areas is a low priority.
  • Consumers will go to incredible lengths to find and use free products and services and appear to have little fear of the consequences of copyright legislation.
  • Consumers want to buy from product and service providers who show manifest empathy for the economic plight. Those who are seen to be concerned for their customers’ well-being will be more favoured than those who don’t.
  • Consumers demonstrate resentment towards expenses that they perceive yield no immediate return – like bank charges, insurance premiums etc.
  • In many categories there is a real need for product and service providers to offer cheaper product and product package options.
  • Black consumers are beginning to “fess up” to the fact that they are really feeling the economic pinch.
  • Domestic workers seem to be relatively dispensable – you can actually survive without them.
  • Consumers are going out less often. By implication this staying at home more often.
  • High-tech digital products are reaching saturation point for the economically active. There’s a cooling off in the feeding frenzy for these types of products.
  • For many categories non-branded products will do nicely.
  • For many product categories consumers are intent on not replacing products as often as they used to in the past.

 

A definitive consumer study of online shopping in SA – (13 June 2016)

Some people believe, and we agree, that it's just a matter of time before everybody on planet Earth is shopping online. Up to now the biggest limiting factor to getting South Africans to shop online has been a lack of access to the Internet. But the advent of smart phones is changing all of this, and the penetration of the Internet is growing at a phenomenal pace.

Against this background we conducted a large sample survey (11,828 respondents) of economically active South Africans (those living in households with a monthly income of more than R10,000 a month) to find out everything we could think of about their online shopping needs, perceptions and behaviours.

Here are some of the things we discovered about online shopping in South Africa:

  • There's not much demographic difference between an online shopper and a non-online shopper. Demographically they are more or less the same, although online shoppers do tend to be wealthier. Where they are different, is in the fact that online shoppers are far more tech savvy than their non-online shopping cousins.
  • Smart phones look set to be the online shopping devices of the future both for browsing and placing orders, as well as for making payments.
  • South African online shoppers have more faith in retailers who offer both online shopping and physical stores than they do in retailers who only offer online shopping. It will take time for the online only retailers to gain the trust and confidence that South African consumers have in the retail chains (with stores) who have been around for many years.
  • South African online shoppers really like the idea of being able to earn loyalty rewards for shopping online.
  • Very few people shop for groceries online, yet this category scores highest as being the category where most people would really like to shop online.