Retailers and brands must relearn everything

by Louise Burgers. Shopper behaviour has changed radically under lockdown in poorer areas and will continue to evolve as pressure on income and affordability hit the poor hardest, said Lebo Motshegoa, managing director of Foshizi Research & Insights, which surveyed consumers in South African townships under lockdown. Brands have to find ways of supporting consumers and showing empathy for their plight.

Television and mobile phones have become very important tools of entertainment, escapism and connection under lockdown, and brands need to leverage this. Data remains a major problem and brands need to use airtime and data as a hook. Facebook Lite and Facebook Free Mode are popular ways for users to connect with friends and family without using data, thereby driving more engagement to the platform during this surreal time.

The research focused on how consumers at the bottom of the pyramid are coping under lockdown in South Africa’s townships and in the context of the global pandemic; as well as how businesses such as brands, retailers and banks can support the poor in a meaningful way. “Businesses will have to gear themselves up for a very different world following the lockdown period. To this end, it will be critical to identify key areas where brands can begin to bring pertinent and compelling solutions to consumers and in order to remain relevant,” Motshegoa pointed out.

Foshizi was established in 2004 as a full research insights agency specialising in the black consumer market. They have done strategic output work for clients including, Shoprite, MultiChoice, Nestle, Mr Price, Amway, Toyota, Nando’s, Flash Mobile, Virgin Active, Power Fashion and Nedbank. The current research was conducted during the first 21 days of South Africa’s lockdown due to the coronavirus COVID-19 pandemic. Motshegoa worked alongside the SA COVID-19 government teams, conducting ethnographic research in Soweto, Alexandra, Kagiso, Mamelodi, CosmoCity, Tembisa and surrounding informal settlements. Foshizi teams were also present on the ground conducting research in KwaZulu Natal and KwaDabeka informal settlements in Pietermaritzburg.

Consumer-centric

In this period of extreme uncertainty and without clarity on what business will look like after the hard lockdown under Level 4 and 3 is lifted, potentially, in a few months’ time when South Africa is out of danger of being overwhelmed by infections; brands have to ensure that they become consumer-centric. This means being in constant connection with the consumer, particularly those living in poverty at the bottom of the pyramid who were experiencing the worst of lockdown.

“Retailers and brands need to go back to ground zero and forget everything they learned. This pandemic has completely changed our lives,” Motshegoa told Retailing Africa. “The lockdown has also exposed family dynamics in South Africa. It is easy to lockdown if you are a nuclear family. Within an extended family household, it becomes virtually impossible to lockdown. Previously, not everyone was always around. Some were at work, some at school, it was only the unemployed who were at home. There is nowhere to go now.”

Another surprising result was that fathers are taking over the shopping, becoming the “warriors”, Motshegoa quipped, in going out to do battle against the virus in the retail environment. Social media was also ramped up in the findings as one of the ways to remain in contact with family who were remote. People were also using social media and technology more creativity and efficiently, like Facebook’s free data mode.

Despite Government allowing street vendors to trade under lockdown, people were not buying as before as money is short and produce is no longer as fresh. Confusion around the permits means that shoppers feel it is too risky to shop at street vendors. The feedback from spaza shops is that consumer behaviour has also changed under lockdown, as people are saving their money; plus there is no longer much commuter traffic as people stay home. “Spaza shops are having to close at 6pm and can only open at 9am. And because there are things they are not allowed to sell, like cigarettes which would often lead to a bigger sale, those drawcards are not there. So it is quiet. I’m starting to see certain parts of the townships starting to adhere to the lockdown. It is not perfect, there is still a lot of work to be done, but word of mouth has started to get around that the military were ‘blikseming’ people just sitting around.

These are the key findings from the report, as narrated by Motshegoa:

1. Hunger: The research found that lockdown is not being adhered to in the strictest sense of the word, and there is a very loose application of the rules. This is driven by two main issues: the gravity of the pandemic has not yet sunk in; and hunger, a grim reality for many South Africans, is forcing the poor out of their homes in search for food or opportunities to earn money and feed their families. It becomes evident that the lockdown is easier on nuclear families; but has created immense pressure on extended families. The exceptionally tight living space in the homes of the emerging market at the bottom of the pyramid (BOP), where an average of five to eight people can occupy one room, does not allow one to comfortably stay indoors for extended periods.
2. Escapism: As a means of escape, television and the cellphone have never been more important for the consumer, and brands should leverage this and use it effectively. Above-the-line can now reach a wider target, the key issue is to ensure you’re reaching the right consumer at the right time and this should be supported by digital to drive further engagement. Consumers are spending more time on social media not only to pass time but to also connect with friends, family and the outside world; however, data remains the main barrier. If brands are going to engage with consumers on digital, they will need to ensure that they use airtime and data as a hook.
3. Connection: If Facebook didn’t have enough impact before, it certainly does now. During the lockdown, consumers at the BOP mention that Facebook is one platform that has enabled them keep in touch with the world – through Facebook Lite and Facebook Free Mode. FB Free Mode allows them to see text only and images are greyed out; they can still chat, see status updates and comments without the use of data, driving more traffic to the platform.
4. Funerals: Insurers who underwrite burial societies and stokvels will need to rethink their value and their unique selling proposition under the ‘new normal’. The observance of norms and cultural practices around funerals have always been sacred within the black community. In order to enable adherence to these cultural practices, many will take out insurance cover or join a burial society to cover the family against the exorbitant costs of a funeral in the event of the of death of a loved one: The funds would usually be used to cater to the many mourners that descend upon the home once the announcement of death has been made; monies towards bus hire, a tent and chairs; vehicles for the family procession and an animal that will be slaughtered, amongst other costs. COVID-19 Regulations for Attendance at Funerals has set a limit of 50 people who can attend a funeral. This is followed by a cumbersome process of obtaining a travel permit as stipulated in the regulations issued by the Minister of Cooperative Governance and Traditional Affairs. Without a doubt, it begs the question, will funeral insurance in its current format still have a place in the new world? And if so, what does the new burial ‘package’ look like post-COVID-19? The answers are not clear, as to what extent will social distancing and self-preservation change the way people send off their loved ones? And will the ancestors approve? And finally, should cultural norms and customs fall away because they are unaffordable?
5. Shopping: We are likely to see shopping behaviour evolve even further. The most predictable being the fact that the purchase of groceries is now driven by price and affordability instead of personal choice; followed by availability; with another key variable being versatility – one product with multiple uses such as the sunlight brick soap, considered ideal for bathing, and washing clothes; or mielie meal, which is an essential calorie providing carbohydrates and can be had as either a porridge at breakfast; or the starch at supper time.
6. Consumer: Another key development is the fact that the shopper is now not necessarily the consumer. While ‘mom’ used to be the primary household grocery purchaser before; ‘dad’ has taken over this role in many instances, based purely from the fact they would rather be the ones to brave the scary world of COVID-19, than the more vulnerable members of the household.
7. Brands: Shoppers now navigate store aisles differently as they cannot go into certain parts of the store. They are ‘forced’ to navigate the store according to what they are permitted to buy. They also now have to shop new and unfamiliar categories, as mentioned by one respondent: “I am now buying hand sanitiser, something I have never had to buy in my life before.” The in-store decision making criteria has also changed, as shoppers now actively seek out products with strong functional benefits such as ‘Kills 99% of all germs’ or ‘with added vitamins’, as opposed as to good taste, pleasant aromas or even packaging.
8. Spazas: Having intercepted a number of spaza shops and a few of their customers while on the ground, one might think that spaza shops should be busier, as many would be shopping at their local spaza store to avoid traveling to the bigger malls, but this is not necessarily the case. If anything, business is dwindling in the informal trade. This is driven by a number of factors, one of which is the list of items that cannot be sold during the lockdown. Small items such as cigarettes, Rizla paper, or even sneif (snuff), drive traffic to the spaza shop which usually turns into a bigger purchase, this shopping occasion is no longer the same. Interestingly, kiddie’s snacks are not moving off the spaza store shelves as quickly anymore as the core purchaser as ‘kids’, are indoors. To make matters worse, spaza shops must be closed by 6pm, which is way early than usual.
9. Street vendors: Arguably, the biggest loser in this whole equation has been the street vendor, who has gone through the emotional rollercoaster of the permit confusion and crackdown. Street vendors make up just over 1.1 million in South Africa, according to StatsSA. Unlike Spaza stores, street vendors draw in many buyers through the sale of loose cigarettes and airtime, who then end up purchasing other products such as fresh produce, and are seeing significant declines to their daily sales.
10. Alcohol: In absence of alcohol, consumers are turning to soft drinks, albeit, begrudgingly. Soft drinks are taking the space of alcohol as the next best thing to drive conversation and bonding, as people hang around at home. Spaza store owners have also seen an increase of sales in this category. However, unlike their usual vices, non-alcoholic beverages do not quite hit the spot. As one beer drinker reported: “I now have to drink ginger ale because I can’t get beer, and I am worried that this amount of ginger could have adverse effects on my well-being.”

*In the spirit of sharing during the lockdown, the full research report is freely available from Foshizi by sending a request to research@foshizi.co.za.

Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.

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