Consumer is king
Consumers can now pick and choose the retail options, including online and overseas shopping, that best suit them, so ad agencies need to be a lot smarter creatively
SA retailers are being forced to look for more engaging ways to reach consumers who are increasingly time-poor and spoilt for choice. But, says Kim Reddy, consumer insights director at research firm Nielsen SA, traditional advertising remains the main channel to drive reach and awareness.
She says ad agencies need to become a lot smarter creatively and strategically in understanding customers’ changing needs.
"Consumers have more choice today but less time. They need quick, easy solutions," she tells the FM. "They look for experiences that are efficient and expedient. We see this in the rise of convenience stores like forecourts and spaza shops … consumers go in, grab what they want and check out. More choice also leads to more clutter and confusion, so simplicity saves them time and effort."
Against this backdrop advertising needs to get much better. "Of all the marketing investments that brands make, the biggest asset and expense still lies in advertising and sponsorship, and a bulk of it is in traditional forms of advertising."
Advertising becomes even more important in the current economic climate, where people decide where to shop and what to buy even before leaving home. "They need constant reminders of what stores are out there and why they should be visiting them."
Also, people are deal-and promotion-seeking and look for value for money, so trawling through broadsheets/retailer pamphlets is becoming the norm, making it important for them to be available and visible.
Reddy says agencies also need to be aware that retailers themselves now have the potential, à la Amazon, to essentially become a media owner where they own and manage the messaging platform.
"This is a trend globally [though not in SA] but it definitely gives the retailer an edge if they also own media."
And with increasing speed "consumers know what they want and they want it in their time and on their terms. They have myriad options, both in terms of where they shop (hypermarkets, supermarkets and convenience stores) and how they shop (online vs offline) so they can pick and choose the retail options that suit them best.
"They are no longer reliant on only a few players in the market, and additionally they are not limited to just local choices. Retailers have to work harder at attracting and retaining customers. Retailers need to engage with their customers in a relevant and meaningful way, both functionally and emotionally, to become a part of their consideration set."
Reddy believes that while globally the shift is towards online, SA is not yet at that stage, so the traditional store is still relevant, especially for those with limited internet access and those still wary of e-commerce.
The Nielsen Shopper Trends 2018 survey says when it comes to groceries 47% of South Africans enjoy the in-store experience, 32% want access to in-store prices/deals, 28% have concerns over online grocery product quality and 27% do not like the extra charges and have concerns over secure payment methods. SA consumers "still want to interact at a store level", says Reddy. Digital interaction is also growing. The latest Nielsen Global e-commerce survey shows in the pre-purchase phase 44% of South Africans search for deals and promotions, 42% look up product information and 35% compare prices.