CONSUMER BEHAVIOUR SA township shoppers prefer value over brand affinity, study finds

Nearly 60% of people say price is their decisive purchasing factor. Advertising is only a motivator in 10% of cases.

South Africa’s townships are seeing a significant shift in consumer behaviour, with a growing preference for value over brand affinity. That’s according to digital CX agency Rogerwilco’s?Township CX (Customer Experience) Report?for 2023, developed in conjunction with market research company Survey54.?

This as residents adapt to a number of challenges – including high unemployment, power cuts, poor service delivery and rising food prices.?

Now in its third year, the?Township CX Report?polled more than 1,000 individuals living in townships nationwide to better understand their spending and saving habits, and the brands that resonate with them.?

When asked about their motivation for choosing a particular brand, the survey found that 59.3% of respondents considered price as the decisive factor. Additionally, 24.9% of participants emphasised the importance of a brand’s understanding of their needs, while only 10.4% mentioned advertising as a motivating factor.

“We’re seeing spaza shops adopting strategies such as repackaging products into smaller sizes and offering weigh-and-pay options. These approaches cater to customers’ budgets and their current need for value,” says Mongezi Mtati, Senior Brand Strategist at Rogerwilco,

Efforts of spaza shop owners are paying off

The efforts made by spaza (informal convenience) shop owners are paying off, as 25% of respondents reported spending over 50% of their income within the township. Moreover, there has been a rise in patronage of local spaza shops, with 51% of respondents claiming to shop at spazas daily – an increase from 44% in 2022.

“To succeed in this market and win the hearts and minds of customers, brands may need to consider collaborating with spaza shops. Close partnerships with these businesses will allow brands to increase their basket sizes as customers top up their supplies throughout the month,” notes Mtati.

The loyalty towards local businesses extends to the fashion industry as well. The popularity of home-grown brands is on the rise among township consumers. In 2022, 75% of respondents expressed a higher likelihood to purchase local fashion brands if they were easily accessible through store cards at frequented shops.?

This year, the survey delved into the actual expenditure on local fashion. Nearly 17% of respondents reported spending between R1,000 and R2,000 (US$53 – US$106) in the past year, with almost 6% investing over R3,000 ($159) in local fashion over that time. In comparison, 6.3% of respondents bought international fashion brands.

The internet is crucial in transforming life in South African townships, providing opportunities for education, access to information, and income generation.?

Last year’s study showed that 70% of respondents had purchased online. This year, respondents were asked about using the internet to earn money, and 60% reported that either they or someone they knew had engaged in the online sale of products or services, or were working online.

You can find out more about the study?here.

For more articles visit: https://africanmarketingconfederation.org/