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.