Shifts in consumer shopping behaviour

by Louise Burgers. Lockdown is expected to bring about “prolonged behavioural changes” in in-store and online shopping – with services like click and collect, automated online subscriptions and personal shopping all being growth areas. Nielsen research has revealed that 37% of South Africans are already shopping more online under lockdown and that this trend is expected to continue, boosting the uptake of ecommerce and leading to shifts in consumer shopping behaviour.

In an interview with Retailing Africa, Nielsen South Africa retail lead, Gareth Paterson, unpacked the data, explaining that where previously, fashion, travel and entertainment categories have been the frontrunners for consumers to enter the online retail sphere; with grocery categories, particularly packaged and fresh goods, being slower to gain traction; the lockdown has now accelerated the adoption of online shopping for some of these categories. Paterson said South Africa’s online grocery shopping penetration and usage has also been quite niche up to this point and of the 58% of South Africans with internet access, only 1-2% had regularly purchased food and groceries online; and only 8 -10% have purchased in the past year. However, one-third of consumers had expressed a willingness to shop online, at the time. This pandemic has now accelerated the uptake of ecommerce, although delivery constraints and logistics are still a challenge for many retailers.

1. Would you describe the jump in online grocery shopping uptake by consumers under lockdown as a radical shift? Will this shift continue? 

Just to confirm, 1-2% is the current share of online grocery sales (i.e., 1-2% of all food sales are online). The 37% statement was from our recent syndicated survey which said 37% of South Africans are purchasing more online. So yes, the statement that 37% of people are shopping more online, specifically during a time in which food and essentials are the only items available, is a significant shift, with the obvious concerns of COVID-19 and shopping in brick and mortar stores, pushing those that had pervious concerns about online grocery shopping into taking the leap. Concerns like not being able to see and feel the items you are buying, ease of using websites or apps, payment security, etc.

A key decision that has also led to taking the leap is that people are at home, meaning taking delivery of online orders would be less of a concern than in the past. We do believe that the trend will continue after lockdown; with many consumers not going to want to rush back into stores even when lockdown is eased. As retailers work on expanding their capabilities and networks and making the online grocery experience as convenient and pleasant as possible, the online grocery channel is in a great position to keep seeing growth into the near future. Something to consider is when clothing, and electronics reopen, online sales within these categories are more than likely going to see an uptick as well.

2. Do you know if most of the ecommerce is via PC or mobile phone; and are you seeing more retailers using WhatsApp or pick-up and go systems?

Unfortunately, we do not have data to be able to substantiate that. What we can say, is that retailers are working on supply chain, order management, and fulfilment systems in order to scale and take advantage of the increase in demand for online FMCG delivery. But importantly, there is a lot of focus being placed on improving customer experience, including making sure they have multiple options to place orders (across multiple platforms like mobile apps, desktop apps, WhatsApp, etc); receive/pick up delivery in a safe manner; and easy, secure payment options. Depending on the retailer, they will choose their focus based on their strategies/consumer segments.

3. What are the top products being bought online right now?

The top grocery items that were typically bought before COVID-19 are personal care, household items and beverages.

4. Where are the limitations that are throttling the uptake of ecommerce under lockdown?

Specifically, for this discussion, it is FMCG uptake, because as you correctly point out, restrictions on items like clothing, electronics, etc, are not relevant here. Specifically, in terms of food retail, it has been around issues like reorganising supply chain, fulfilment issues like having enough people to pick the stock; as well as number of delivery slots due to the available delivery staff/vehicles. This has been the main issue, as people who would have used online grocery options were given delivery slots 3-4 weeks after their order, and therefore cancelled orders. Essentially, these issues do not allow limitations like data costs, smart phone access, etc, to be significant limitations that would affect this initial bottle neck.

5. What do retailers/brands need to do to make this a more seamless experience for online shoppers and to grow ecommerce? Where will the innovation come from?

We believe there will be demand into the future; and there will be a strain on online grocery retailers for months to come, even as COVID-19 lock down rules ease within South Africa. The key therefore is around creating a good end-to-end user experience, which can start with being at the top of a search list; to a user friendly mobile app, with pick-up or drop-off options, that allow for reasonable delivery times, with limited out of stocks. Of course, security is also very important. The above aspects are of course easier said than done, but negative experiences like long delivery lags, multiple out of stocks, cumbersome ordering capabilities, etc, can lead to more damage than its worth.

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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