Brewing Hope: Embracing Strength

As October marks Breast Cancer Awareness Month???, I find myself reflecting on the importance of resilience and awareness, both personally and in our communities. Having watched my late mother navigate her own journey with breast cancer, underscored the strength and support needed in times of challenge. This month serves as a reminder of the important role that awareness and proactive action play in making a difference ??

In this edition of Coffee Break Insights, we’ll explore the South African Reserve Bank’s inaugural Payments Study, providing us with insights into consumer payment behaviours and preferences.

Back by popular demand, Johann Biermann, CFP?'s Braaibroodjie Index. A unique look at inflation through the lens of our beloved braai culture.

We also have a look at how Frontline Research Group is transforming market insights with their retail census data, giving businesses a clearer view of South Africa’s Traditional Trade landscape. Plus, Livingfacts (Pty) Ltd brings us some fresh thoughts on keeping it real in the age of AI.

This issue invites you to sit back, sip your coffee, and discover how South Africa’s evolving payment ecosystem and market insights are being shaped.

South African Reserve Bank Payments Study 2023

The South African Reserve Bank (SARB) has released its inaugural Payments Study Report.

The study, officially launched in September 2024, was based on two surveys – the Survey of Consumer Payment Choice (SCPC) and Diary of Consumer Payment Choice (DCPC). The study provides comprehensive insights into consumer behaviour and preferences regarding payment instruments in South Africa.

As a first of its kind study in South Africa, MarkData (Pty) Ltd and its incredible team of more than 250 interviewers, team leaders and supervisors, conducted two surveys between April and December 2023. A sample of 3 068 interviews formed part of the final analysis. The sample was representative of South Africans aged 18 and older, totalling 40.5 million people.?

Key Findings ??

Payment Methods

• Cash Payments: Cash remains the most frequently used payment method, with 98% of the population using it. However, it accounts for only 21% of the total payment value, with an average transaction value of R208.44. However, not everyone use cash as a payment method equally, there are perceived safety risks and the inconvenience of having cash in hand, particularly for larger payments.
• Debit Card Payments: Debit cards are the second most popular payment method, used by 91% of the population. They account for 34% of payment volume and 55% of payment value, with an average transaction value of R768.20. Debit cards are predominantly used for grocery shopping, and Capitec Bank holds the largest share of debit card users.
• Credit Card Payments: Credit cards are used by 19% of the population, contributing to 1.9% of payment volume and 4.3% of payment value. The average transaction value is R1,141.41. Credit cards are primarily used for unplanned expenses and are more common among higher-income groups.
• Internet Banking and Banking Apps: Internet banking is used by 25% of the population, while banking apps are used by 55%. Banking apps are accessed more frequently, with an average transaction value of R1,136.80. [JW1]?
• Sending Money: About 60% of the population reported sending money, but the DCPC recorded a lower usage rate. The average transaction value for sending money is R1,017.12, with unplanned payments being substantially higher in value.
• Other Payment Methods: Digital payments, loyalty cards, and cardless payments are used by a small segment of the population. These methods account for 0.9% of payment volume and 1.1% of payment value.
• Crypto Assets: Only 2.3% of the population invests in crypto assets, with Bitcoin being the most popular. Most consider crypto assets an investment rather than a payment method.

Income and Debt Profiles

The study categorised income into four groups: low-income, low-middle-income, high-middle-income, and high-income. The average transaction value increases with income, and higher-income groups are more likely to use credit cards and digital payment methods. Borrowing from family and friends is the most common way to access money, followed by informal borrowing agents and retail stores. Only 6% borrow from banks.

Digital Transformation

The population is divided into three categories based on their adoption of digital financial methods: digital adopters (33%), digital rejectors (36%), and the excluded (31%). Barriers to digital adoption include lack of knowledge, funds, and access to technology.

Investments

Less than half of the population invested money in the past year, with burial societies, stokvels, and savings options at the banks being the most popular investment vehicles. Cash and debit cards are the primary methods for making investments.

Conclusion

The SARB Payments Study Report 2023 highlights the evolving payment landscape in South Africa. While cash remains prevalent, debit cards and banking apps are gaining traction. The study underscores the need for targeted financial education to promote the adoption of digital payment methods. The SARB aims to continue monitoring these trends to inform policymakers and financial service providers, ensuring a robust and inclusive national payment system.

For more detailed insights, you can access the full report on the SARB website.

?? https://lnkd.in/djxkpUsA

MarkData (Pty) Ltd would like to thank the incredible team at SARB. This study is another highlight of MarkData's 40+year history.

Formerly the survey and opinion research centre of the Human Sciences Research Council, founded in 1981 and re-established as a private company in 1996, MarkData is a fully independent marketing and strategic insights, consulting, and development company.

There Human Sciences Research Council origin and the key professional staff they have retained, allow them to add value through depth of analysis, innovation, and the sophistication of rigorous techniques.

??https://markdata.co.za/contact/

Braaibroodjie Index

It looks like the price of braaibroodjies ?? have peaked for now! The Index was down -0.7% during September, while Headline Inflation was +0.1% and Food Inflation +0.4%. Big movers the last month was Onions ?? (down -6.0%) and Tomatoes ??(+2.3%).

On a year to date basis, Cheddar ?? (+7.7%), Tomatoes ?? (+7.5%) and Onions ?? (+5.1%) remain the main drivers of the price of a braaibroodjie.

For the year, the Index is up +5.3% vs Headline Inflation +3.0% and Food Inflation +1.6% ??

?? Big thanks to Johann Biermann, CFP? for sharing!

Frontline Research Group can revolutionise your market insights with their retail census data in South Africa

The retail census, conducted by Frontline Research Group , has become a critical resource for businesses looking to navigate South Africa’s retail landscape.

FRG's rigorous data collection, which spans all nine provinces, provides an invaluable snapshot of retail outlets, their locations, and their market potential.

Steve Johnson, Managing Director of FRG, says, “This data plays a significant role in guiding both tactical and strategic decisions for businesses aiming to penetrate or expand within the country's retail sector.”

The 2019 Nationwide Census: Mapping the Retail Landscape

In 2019, FRG embarked on a significant project, conducting a nationwide census that identified 150,857 retail outlets across specific regions, within South Africa, and served to update previous census projects already conducted. This comprehensive study included various types of retail businesses, from large-scale cash-and-carry stores and wholesalers to small informal traders such as shebeens and hawkers. Businesses now had access to detailed, up-to-date data that allowed them to understand the true size and distribution of the market across the country's nine provinces.

Focused Township Census in 2023: Deep Dive into Soweto, Tembisa, and Umlazi

FRG's efforts continued in 2023 with a focused retail census in three key South African townships—Soweto, Tembisa, and Umlazi. These areas are known for their vibrant but often underserved informal retail sectors. FRG's study collected data on 8,586 outlets, within the traditional trade, ranging from wholesalers to independent outlets like shebeens and Spaza shops.

Steve says, “This data provides a deeper understanding of township economies, where much of the retail activity is informal but critical to the local economy.”

2024 Update: Expanding and Refining the Database

In 2024, FRG expanded its retail census once again, with a particular emphasis on outlets handling groceries. This latest initiative added and updated 48,951 outlets across all nine provinces to the database, significantly enriching the scope of information available. These additions ensure businesses can access current, detailed data on grocery outlets—essential for companies in the fast-moving consumer goods (FMCG) industry.

Precision Data: A Strategic Asset for Business

FRG’s approach to data collection is highly detailed and precise. For each retail outlet, FRG captures critical information including a photograph, physical address,? geolocation, as well as profiling each outlet.

“This information is invaluable for businesses seeking to understand the size and distribution of the retail market in South Africa. It also plays a key role in route-to-market analysis, a crucial aspect for companies looking to optimize distribution channels, improve logistics, and increase market penetration,” adds Steve.

Strategic and Tactical Applications of FRG’s Data

The retail census data collected by FRG is not only useful for understanding the retail landscape but also serves as a strategic tool for businesses. Whether it's identifying new market opportunities, optimizing product distribution, or planning marketing efforts, the data helps businesses make informed decisions. The ability to map retail outlets and assess their proximity to consumers is particularly useful for FMCG companies, wholesalers, and logistics providers.

For businesses looking to develop or expand their footprint in South Africa, FRG’s retail census data provides a competitive edge. With insights drawn from both formal and informal sectors, companies can develop strategies tailored to the unique dynamics of the South African retail market.

If you are interested in a demonstration or would like a quotation for receiving the data sets or tracking panel information, you are welcome to contact me directly - [email protected]

An authentic voice when using AI

By Marylou Kneale

I had an interesting experience recently while reading an article by someone I follow. The tone, words and sentence structure in the article was different. It felt like the individual’s authentic voice had changed.

On reflection I wondered if the article’s first (and maybe only) draft had largely been written using generative AI, without being edited to include the individual’s own personality and perspective.

On reflection, my thought was we should embrace AI wherever appropriate but as companies and individuals, we should not lose our unique voice and perspective when writing, analysing or presenting to clients.

It’s the unique perspective that brings something different to each brand, company, client and research project. We still need to think, talk and write like humans. Our diverse opinions and thoughts bring originality and innovative ideas, and this is how we add value.

How do you and your company bring originality and add value to your AI usage especially in the insights industry? I would love to hear your thoughts on the subject.

How human is your company? Isn’t it time to ask you customers what they think?

Livingfacts is an independent, full-service B2B research and insights company and have more than two decades of experience. Livingfacts provide bespoke research solutions aimed at helping businesses understand their B2B customers, Corporates, SMEs, stakeholders, and suppliers. Livingfacts operate across Southern Africa, with capabilities extending into East and West Africa.

If you want to ensure that your business remains relevant and meet your target markets’ changing needs, please contact:

Marylou Kneale on 082 807 4043 or [email protected]

Heidi Clowes on 082 562 9111 or [email protected]

www.livingfacts.co.za

Frontline Research Group Survey: Winning in the Traditional Trade

Are you looking for valuable insights to navigate the evolving landscape of traditional trade in Africa ? This survey is specifically designed with you and your business in mind.

By taking part, you will play a vital role in uncovering crucial insights into the evolving landscape of traditional trade. Your input will contribute to research aimed at empowering businesses like yours to thrive in this competitive environment.

Why Should You Participate?

• Exclusive Insights: Be among the first to receive key findings from the survey (all individual responses will be kept private and confidential).
• Shape the Future: Your feedback will help shape effective strategies and solutions tailored for the traditional trade sector, ensuring you gain the right insights for your business.

The survey will take +/- 10 minutes. So grab your favourite cup of coffee ?, click the link to the survey below ?? , and enjoy sharing your valuable insights!

Link to survey

Thank you for your participation - your voice makes a difference!

Thank you for reading, until next time!

If you're looking to navigate the complex world of market research and find the right partner, let's connect! ?? [email protected]