Affordability and sustainability are priorities for South African consumers

The modern South African consumer is more conscious than ever of factors such as value for money, customer experience and convenience, according to a new report compiled by Deloitte in collaboration with BrandsEye. The recommendations are based on analysis of consumer social media engagement.

Gauging consumer sentiment is central to the success of any business. In an era of social media, consumers are more willing than ever to put their preferences and opinions in the public sphere, which has increased accountability on the one hand, but has created substantial opportunity for businesses on the other.

Analysis of social media activity can provide an adept overview of consumer preferences. Deloitte and BrandsEye have combined to conduct such an analysis. The duo examined nearly 1.7 million social media posts from South African consumers to gauge the overall sentiment in the country.

The posts in question primarily referred to some of the country’s largest retailers, which occupy a significant market share. The analysis revealed that consumer preferences in the country are being shaped by modern industry trends as well as economic factors that are unique to South Africa.

The broad economic outlook in South Africa has been far from rosy in recent years. The economy’s reliance on oil and commodity prices has caused significant fluctuations growth, while underlying factors such as corruption and unemployment have hindered the flow of progress.

As a result, the economy has been in a period of stagnation, although the retail sector has been among those that has maintained its stability. In 2017, a few years after the country’s economy began faltering, the country’s largest retailers continued to register 5% growth annually.

Although the largest retailer in the country has since been gripped by an accounting scandal, the sector has maintained its strong performance. On the other hand, much like other sectors in the country, the sector is under pressure to evolve in tandem with technological changes that are affecting the broader economic outlook. 

Deloitte has been a major participant in this scenario. The firm established what it calls a ‘connected retail experience’ in Cape Town last year. Connected retail is a new shopping paradigm, which greatly enhances customer experience through automation and data analytical capabilities.

The Big Four accounting and advisory firm’s analysis of consumer sentiment has revealed that this new paradigm has made its way into consumer expectations, amid other trends. South Africa’s economic outlook dictates a major part of its consumer sentiment, given that affordability and value for money is high among consumer priorities.

Purchasing power is low in a stagnating economy, pushing consumers to seek affordability. Meanwhile, the demand for sustainability permeating consumer sentiment across the globe has made its way into the retail sector as well, also evidenced by Deloitte’s data. The number of online conversations around environmental impact has registered a spike between last year and the start of this year.

According to Deloitte, heeding these calls is crucial for the future of the retail sector. ‘Given the benefits of meaningful engagement, it is paramount for retailers to remain receptive to their customers’ feedback – both positive and negative. More importantly, retailers need to consider ways to react in an agile manner to real-time consumer sentiment and feedback. This will help them to create a unique customer experience, to create value for the customer and to communicate effectively what they stand for,’ writes the firm.