Nielsen’s ‘catalyst moments’ driving consumer behaviour

by Gareth Paterson. Nielsen has identified ‘catalyst moments’ that may change technology adoption horizons and drive changes in shopping habits.

by Gareth Paterson. Amidst the strange new world of COVID-19, online grocery shopping has been a lifeline for many South African consumers who have desperately sought out safe and secure shopping alternatives amidst the uncertainly of lockdown living. As a result, available online shopping platforms, especially for groceries, medicines and other necessary items, have seen a surge in usage over the last few weeks as consumers prefer not to venture into stores.

South Africa’s online grocery shopping penetration and usage has previously been quite niche. Of the 58% of South Africans with internet access, only 1-2% have regularly purchased food and groceries online and only 8-10% have purchased in the past year. However, one-third of consumers have expressed a willingness to shop online.

In line with this thinking, Nielsen has examined recent data sets collected from consumers around the world who have provided insights on their intentions as they relate to technology; and reviewed it alongside developments in recent weeks tied to the COVID-19 outbreak. Through this research, Nielsen has identified ‘catalyst moments’ that may change technology adoption horizons and drive changes in shopping habits.

Reduced touchpoint alternatives

In many markets, fashion, travel and entertainment categories have been the frontrunners for consumers to enter the online retail sphere; followed by the beauty and personal care categories, as consumers became more comfortable and confident shopping online. But other grocery categories, particularly packaged and fresh goods, have been slower to gain traction. However, within a lockdown environment like the one South Africa is currently experiencing, we are seeing some shifts in online adoption. Where products can be obtained via online shopping and home delivery, consumers with access to these online options are increasingly opting for them.

This has also been borne out by a Nielsen investigation that uncovered six key consumer thresholds which showed that when markets reach the fourth threshold: “quarantined living preparation”, consumers increasingly opted for online shopping and declined store visits. However, the increase in online shopping has also placed immense pressure on order fulfilment and led to extended delivery times as local retailers have sought to boost their online capacity to match the increasing online shopper traffic. It’s important to note though, similar challenges have been faced around the world, but retailers that have managed to scale up their supply and delivery logistics have seen exponential growth in online retailing. In Italy, for example, online sales growth now exceeds 100%.

Accelerated innovation

One of the outcomes of the current challenge is that local innovations have emerged to fill the need gap. For example, services where consumers place an order with a retailer and have their order delivered to their car in a pre-arranged parking bay have emerged, ensuring not only increased health and safety, but speedier fulfilment of online orders. Existing online retailers have also quickly shifted their existing product offering to supply essential goods; such as a large ecommerce gifting platform now delivering fresh produce; and former Uber Eats drivers who are maintaining an income through the delivery of groceries for large retailers.

Lockdown challenges have also compelled some consumers to look for alternative online sources to find the products they need. Smaller players who aggregate various retailer offerings on their platforms have carved out a much stronger position than pre-COVID-19 due to their ability to offer faster delivery times by utilising a network of personal shoppers and independent drivers at an additional service charge.

Neighbourhood does good

In addition, direct-to-consumer (DTC) businesses have evolved at a rapid pace in the last few years, predominantly driven by smaller, often local players, who have identified niche segments or consumer needs, and recognise the advantages of direct consumer reach, powered by technology. Local neighbourhood stores are important for those who do not have access to online shopping or are still not using online options. What we might see is that the number of trips will become less frequent under the current situation and most shopping might be done from one store, compared to trips to multiple stores that were previously visited for different items.

Preparing for a technology-enabled future

What this rapid evolution in online makes clear, is that as we gear up for a post-lockdown ‘new normal’, previously perceived obstacles and barriers to online adoption may no longer be as indicative or insurmountable. Technology adoption in the current situation is paving the way for a sustained development of online shopping, in terms of infrastructure and consumer acceptance.

We can therefore expect a permanent uplift in online shopping numbers – albeit off a small base in South Africa – even after the pandemic has ended, since many behaviours adopted during the COVID-19 period are likely to translate into more permanent long term habits.

As a result, retail and manufacturing businesses around the world can benefit from a more proactive e-commerce strategy, as digitally-enabled solutions become even more sought after. Technology advancements that provide consumers with convenience, choice, and safety, will therefore be one of the most significant game changers for FMCG retailers and manufacturers in the immediate and longer term.

Source: Nielsen’s Connected Commerce and Shopper Trends surveys.  


Gareth Paterson is Nielsen South Africa Retailer Lead. Nielsen studies consumers in more than 100 countries to provide the most complete view of trends and habits worldwide.


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