Consumer Sentiment - Retail Insights -South Africa 2019

Implications for retailers

Understanding customer segmentation

Retailers need to develop a deep and nuanced understanding of their consumer segments in order to make the right strategic choices. In order to develop a holistic customer view and to align the brand’s strategy towards this segmentation, the following aspects may be considered:

? Develop an understanding of the lifestyle journey of the shopper including habits and patterns to get in sync with buying behavior

? Leverage analytics to track segment-specific customer sentiments against actual performance parameters

? Leverage data to gain customer insights that can inform strategic choices around format, range and availability

? Use consumer insights to develop segment-appropriate pricing and discount strategies.

Retaining costs

In the current tough trading environment, retaining costs is crucial. However, this needs to be carefully balanced with maintaining high product and customer experience standards. In order to contain costs and improve price competitiveness, the following aspects may be considered:

? Relook sourcing strategy

? Leverage synergies and shared services for non-customer facing functions ? Develop strong and future-oriented supplier relationships

? Develop a focussed real estate and format strategy

? Focus on margins and removal of peripheral costs

? Leverage data and customer insights to develop alternative revenue streams

? Brand Spend Optimisation to develop and deliver improved marketing communications and retail experience.

Creating value

As the value has become key criteria for purchasing decisions, retailers need to be very clear what value they provide to their customers and be able to effectively communicate the value of their products or services. Differentiation from other retailers can be challenging with competitive generic messaging all focussing on promising value. The key differentiator here is the actual proven delivery of value. The following aspects form part of the quest for value creation: 

? Provide an aspirational shopping experience during hard times

? Leverage house brands and fresh produce as a potential differentiator

? Identify alternative ways for value creation such as gamification to enhance brand and value perception

? Focus on convenience, health, and wellness

? Offer in-store experiences that go beyond retail, e.g. in-store cooking classes.

Restoring loyalty

Customer loyalty is permanently under severe pressure and is generally a combination of understanding the customer’s requirements, the optimal delivery of the brand promise and most importantly delivering against this promise at every touchpoint in the retail experience. Price-conscious and value-seeking customers tend to be less brand loyal as they shop for specials. The following aspects may assist with restoring loyalty among price-conscious and value-seeking consumers:

 Identify meaningful segment-specific touchpoints to engage with consumers

? Develop loyalty and connectivity program activations that are convenient for the customer

? Offer tailored and customer-specific rewards, linking these to lifestyle

? Link rewards to a digital management system (not another card).