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Tag: business

  • Shifting retail habits in SA consumers

    Shifting retail habits in SA consumers

    Marketing influences and retail habits are shifting in the pandemic, and in South Africa’s townships, cash and printed marketing messages still count. These observations are from the 2021 South Africa Township Marketing Report with Rogerwilco and Survey54, which looks at the factors that influence consumer’s decisions in the township environment.

    Cash is still king

    South Africans still carry cash, with a whopping 80% of respondents preferring it over other payment methods. There are two strongly held beliefs here: firstly, bank charges are way too high (not entirely true). Secondly, cash is untraceable, so the taxman won’t take it from you. Abdullahi Ibrahim, treasurer of the Somali Community Board of South Africa, whose organisation represents the interests of many spazas and informal traders, maintains that a majority of his members would prefer if their customers paid with cards or e-wallets.

    With many respondents using their bank accounts only two or three times a month to withdraw their salaries, there are people out there walking around with fairly substantial sums of money in their pockets. Not ideal for them, not ideal for traders. Breaking the cash habit is going to be hard work, but there are benefits for both the retailer and the consumer.

    Retailers: 1, Spaza’s: 0

    Spaza shops have been a mainstay in townships since the 1970s, and while they are still a go-to shopping choice, their popularity is declining. COVID-19 has exacerbated existing issues that consumers face when shopping at a spaza shop. Price has always been a consideration, but many consumers are willing to pay the higher price in exchange for the convenience of having a friendly neighbourhood store. Expired stock is also a long-standing issue, made worse by less foot traffic during COVID-19’s lockdowns.

    These problems have caused the township consumer to re-think their loyalties, and retailers are shifting up the preferred shopping list. The fall of the spaza could be detrimental to SA’s economy, with spaza’s contributing 5.2% to SA’s overall GDP and offering employment to 2.6 million people.

    The opportunities are endless here, but one that springs immediately to mind is a white labelled loyalty programme that could bring the township resident into the loyalty cycle while providing a secure future for the local spaza shop.

    Marketing influences

    The last point I’d like to touch on is our respondent’s most trusted sources of product information. Advocacy from friends and family is number one. A good rule of thumb for marketers is this: you’re not talking to an individual, you’re talking to a family. There is an ecosystem there and getting your brand into those conversations is going to require an understanding of all its participants. In second place (and maybe surprising for some) are newspaper inserts. Many marketers are turning to social media to reach this market, but the sweet spot still lies in print.

    There are many other topics, ranging from attitudes towards fake goods, ecommerce, and side hustles. The takeaway here, is that if this is your audience, you may know less about them than you think.

  • Retail futures from Google Marketing Conference

    Retail futures from Google Marketing Conference

    Google recently aired its Google Marketing conference. The event was a detailed look at the future of online retail, finance, and advertising. Insights, there were aplenty. I’ve taken some notes, focusing on the future of retail. I highly recommend that you go and watch the videos yourselves, there’s a lot of food for thought in them.

    When COVID-19 kicked off, there was a lot of speculation around the ‘new normal’, what trends would remain, and what trends wouldn’t. Here we are, a year later, and there appears to be some stickiness on some of those trends. The retail team at Google has started examining these trends more closely.

    Unpredictability

    Sales will remain unpredictable – 15% of all Google searches are new. People are spending more time at home, and with that comes certain behaviours. I know, as I’ve been spending a lot of time in my study, using it as my office. I’ve had to get a second screen, increase my desk space, and organise a bundle of cables leading out of the various PCs that I own. I wouldn’t have been bothered by any of this if I wasn’t spending so much time in this room. The thing is, this behaviour is completely unnatural for me. If you told me a year ago that I’d be buying leather chairs to turn the spare room into a library, I’d tell you that you’re mad. It turns out that my forays into interior design and neatening up my spaces are not unique to me.

    There’s also been an increase in clothing sales of tops, but not bottoms. How many of us are sitting in pyjama pants right now? The fact that 15% of Google searches are new, means that people are starting to think differently. They’re looking for inspiration, for ways to make their lives better in the new context they find themselves in. We’ve never seen this before. Sales have become unpredictable.

    Convenience

    Consumers have three big priorities. Stock and delivery times are the first two. If your business is struggling to keep stock or your delivery times are not great, you had better fix that. Those two issues are damaging your brand, which in turn will damage your repeat business (and perhaps even new business if word gets out). We’ve always known that people have an affinity towards brands that share their ideals.

    The third consumer priority takes this into account. As part of this drive towards convenience, consumer searches show a 71% increase in usages of terms like “sustainable”, “ethically sourced”, etc. This has always been a background trend, but it is becoming more prominent and I am aware of several businesses that have taken note and are beginning to take sustainability a lot more seriously.

    Data

    Data has always been important, we know it, and many of us spend a lot of time looking at it. But how we use data needs to change. Sajal Kohli, senior partner and head of global retail at McKinsey has said that businesses need to gear themselves for “much shorter planning horizons”. So, if you’re planning your business activities on a one year timescale, you need to stop. Start planning your launches, promos, and campaigns on a quarterly or even monthly time frame. The data is there and you have the insights. Your business needs to become far more agile to account for the unpredictable environment we find ourselves in.

    This should have been the approach to business the moment we had access to the volumes of data that we have access to. But for some reason we stuck to our old ways. Covid is forcing our hand and we need to adapt quickly.

    Loyalty programmes

    I’ve talked about loyalty programmes before in this forum, so I’m not going to go into this in too much detail. The bottom line is, have a good one, and make retention and repeat shops a priority.

    I know that the ‘new normal’ conversation has been done to death. I’m also aware that a lot of the stats I’ve presented above are US-based. I don’t think it matters. This isn’t about Covid, this is about solid retail business practices. The things that the team at Google are telling us, are not new and wonderful insights. We’ve known these things all along.

    Be agile, focus on data and insights, and put your customer first. These conversations have been around for years. Covid or no Covid, the pressure is on, and we need to start putting these principles into play.

  • Gimmick or revolution – what does VR really bring?

    Gimmick or revolution – what does VR really bring?

    In the winter of 1982, my father brought home our first computer, a BBC Model B microcomputer. The BBC Micro was a basic 8 bit machine running a 2 MHz 6502 processor with 4 channel sound and the ability to output 8 colour graphics at a dismal resolution. By today’s standards, it’s awful. But in 1982 it was mind-blowing. As the name suggests, the BBC micro was commissioned by the BBC as a learning tool and it even got its own TV show. More importantly, it was rolled-out across most schools in the UK as part of a digital education programme. The BBC Micro pioneered a lot of things, both technical and cultural.

    Inevitably, its popularity waned. One of the big reasons? It failed to meet the expectations of the working world. While it was great for learning and understanding computers, it had very little to offer in the way of spreadsheets and word processors. When the PC/Mac came along with all of these wonderful things, adoption rates shot up, and soon there was a PC in almost every office and household. New technology is driven by adoption, adoption is driven by big business. Until that journey from rags to riches is undertaken, tech will often sit in a world of obscurity, becoming yet another artifact of failed innovation.

    That brings me to the subject of VR, a technology that’s been around for almost a quarter of a century. Why has it taken so long to gain traction? Where is the rags to riches story? Is it just a gimmick? Things are starting to change from a sales POV. Sony’s answer, the PSVR, has enjoyed some popularity. Facebook’s Oculus range has also seen a significant rise in sales (especially with the release of the Oculus Quest 2). Unfortunately, both these headsets are still sitting firmly in the realm of the ‘experience’ (read: gamer), so how useful are they as an office productivity tool. The answer is, they’re not. Not yet.

    What has stood in the way? Portability for one thing. VR headsets plug into big, powerful computers so that video games can have a very deep sense of realism. Because there’s been such a heavy focus on gaming, there has been very little thought given to standalone units. That has changed and there are several options available for those of us that don’t have the big, expensive consoles and PCs. But it also means that an office environment won’t need a ton of extra gear lying around to unlock the power of VR.

    I think the biggest issue right now is imagination. There are many updates and peripherals that seek to replicate the office experience in the VR space. Physical keyboards that magically appear on virtual desks are one such product. Virtual offices are a great idea. You can have as many screens as you like, you can set up your office in any virtual location, from the beaches of Rio to the Swiss Alps. But what is the point? How is that innovation? On the job training has been pushed as another ‘killer feature’. Once again, not particularly interesting and would unlikely be the big driver adoption.

    True innovation

    An example of true innovation would be creating virtual workspaces where team members can collaborate on products in a single, interactive ‘playroom’. Need to build an activation stand for a product? Workshop it with your team in a collab space. Create the experience virtually, add ideas, sketch out collateral, and experience it as the consumer would before it even goes into production. We could be creating massive, fully interactive ideation spaces that shift from idea to prototype to production in one space, with one team. Everything from building code to planning logistics to creating better experiences would go from being an endless stream of emails and powerpoint documents to a single, virtual space. The days of endless emails would disappear.

    The same principle could work for the consumer. Imagine purchasing furniture by bringing virtual couches into a virtual representation of your lounge. Imagine trying out your next big screen TV in the comfort of your home before ordering. Imagine following along while a virtual chef shows you how to make an amazing dish before you’ve even ordered the ingredients.

    Will this happen? What does it mean for you? If history is anything to go by (and it always is), as soon as VR gets adopted by big business, it’s going to be a big thing. The way the new headsets are going and the updates that are currently being rolled out, we’re going to see that kind of adoption in the next three to five years. Right now, keep an eye out, because mass consumer adoption will mean a fundamental change in how people shop for things. You might want to be prepared for that.

  • What we can learn from Japan’s map to loyalty

    What we can learn from Japan’s map to loyalty

    I’m a big nerd and I’m a big fan of anime. I was watching a show the other day where the main character had a mall loyalty map. As he visited certain stores, he would get his loyalty map stamped. Once he hit five stamps, he could enter a lucky draw for the day. This piqued my interest, so I did some research into Japanese consumer loyalty card systems.

    The first thing to understand is that Japan’s loyalty cards run independently of chains and financial institutions. This gives them the freedom to partner with just about anyone to the benefit of the consumer. Typically, a Japanese consumer can manage their entire cashback scheme with just one card without having to carry around retail specific cards. Here in South Africa, some major chains have more than one card – dependent on which branch you visit (not pointing fingers, but they’re friendly, wherever you are). One loyalty card for everything sounds like a distant dream. Up until a few years ago, the Tstutaya card was the biggest loyalty programme in Japan. With 68 million members, 900,000 locations and 179 retail chains, the card was a savings powerhouse. For every 100 yen spent, you’d get 1 yen back, and since you could use it for almost everything you purchased, the savings could be astronomical. Recently, competitors have arisen and the T-card is not as popular as it used to be. Competition is always a good thing, so the cards available today offer even greater benefits.

    With more complex points systems leading to better rewards, a new sub-culture has arisen, the poikatsu influencer. Poikatsu is the art of hacking loyalty cards, looking for retailer loopholes, and maximising savings. Influencers put together hacks and tips to help consumers get the most out of their cards, although most of the practices are a little on the dodgy side. With COVID-19, poikatsu went from being a hobby to being a viable source of income for many. The reason that loyalty programmes are so ubiquitous in Japan is that despite being the pioneer of cashless payment systems, 80% of Japanese consumers say they prefer using cash. Loyalty cards are an attempt to change consumer behaviour, but they’re fighting a losing battle it seems. Physical currency is part legal tender, part cultural artifact. There is a ceremonial role that cash plays in Japanese society.

    Back to the loyalty map. How it works is simple. A mall will issue a loyalty map upon entering. You’re shown which stores are currently having specials and you can get a stamp at each participating store. Once you’ve hit a prerequisite number of stamps, you can turn your map in for a spin of a wheel, raffle, or daily giveaway. It’s such a simple system, but it means that you plan a consumer’s day by category. You can push them to stores that are under-performing or areas of the mall with less foot traffic all with something as simple as a paper map and a few rubber stamps.

    There are several property groups that are trying to move away from the siloed nature of the retailer’s tenant experience. They’re putting together forums and committees and generally getting retailers more involved in what happens in the shopping space. When these plans come to fruition, the consumer will only benefit. Removing these obstacles could lead to new shopping experiences and loyalty programmes, and who knows, maybe one day you’ll be enthusiastically asking a shopkeeper to stamp your mall map so you can win a vacuum cleaner.

  • Relook at marketing strat going forward

    Relook at marketing strat going forward

    If you’re predicting trends, I say good luck to you. I don’t want to play. I wish you well, I hope you enjoy yourself. I’m going to take the financial investors approach to predictions this year… “there’s just not enough data”.

    With trends articles usually, we tend to see the same things repeated over and over again, year in and year out. Things like mobile and user-generated content will continue to rise, and so on. It’s all very predictable, it’s all quite boring. I’m not against looking back though, and after the year we’ve just had, I think it’s important to interrogate and re-evaluate marketing efforts.

    Do you know your audience?

    Honestly, if all you know about your audience is their age, gender, and monthly income, you don’t know your audience. But, if you have some psychographic data generated by some good conversations with them, then good for you, you know your audience a little bit better. No matter where you sit with your audience knowledge, I have some bad news; you may have to go back to the drawing board.

    During 2020, the sale of luxury goods dipped dramatically while consumer electronics shot through the roof. People have become far more focused on simplifying their everyday lives than they are with wearing trendy fashion items. The luxury brands that are weathering this storm are the ones that actually did focus on sustainability as opposed to paying lip-service to it. If your brand doesn’t make everyday life easier or makes some kind of positive and tangible difference to the world, you might be in trouble.

    Community has also become a prioritised topic. Absence makes the heart grow fonder and isolation has definitely highlighted that community is essential to wellbeing. Brands that are focused on the single individual, using terms such as  ‘individuality’ as part of their brand promise will find that they no longer resonate with their audiences like they used to. So, relook at your audience. They might be different people.

    Social channels

    A couple of things have happened here that are noteworthy. Firstly, social has become a very solid sales channel. It’s something that Facebook has been trying to push for a while now and many brands are starting to see very tangible results from Facebook. Tools like Facebook marketplace have come into their own, but another factor is all-round better content and targeting from brands.

    The biggest external contributor to sales across multiple social channels is lockdown. As I mentioned earlier, people have become isolated and they’ve turned to social media to fill those emotional gaps.

    But, and here’s the thing, maybe you don’t need ALL those social channels.

    I know, I know, you’ve been told you need a presence… but really? Do you? Is it a solid strategy to just exist on a platform without getting tangible results? The trend is moving towards optimisation, culling the under-performing channels and focusing on creating better content for the platforms that remain. It’s a big step to take and it requires a shift from a reach/engagement mindset to a conversion mindset. As I said, I don’t want to be the trends guy, but it’s worth considering.

    Mindset

    While looking at trend reports does have some uses, and can sometimes be quite inspiring and insightful, remember that each brand ecosystem is different. The thing is, you need to keep your ear close to the ground and an eye on the value your marketing efforts generate. This is a rule of thumb. If you only remember one thing from this article, let it be this: throw away your checklists because you’re not in Kansas anymore. I am certain that 2021 will be a harsh master and if you’re not paying attention, it will decimate you.

  • Working from home’s impact on innovation

    Working from home’s impact on innovation

    In Greek Mythology, Hercules had 12 trials to overcome. These included slaying lions, nine-headed monsters, and cleaning the stables of immortal livestock. If the ancient statues are accurate at all, Hercules completed all of these trials without wearing pants. Imagine what he could have done in a pair of jeans? Moving on to some recent (and perhaps more relevant) events, COVID-19’s adverse effects should never be underplayed or ignored.

    Having said that, there is one positive thing that shines out in the gloom: societal change. In the last few years, negative events have sparked the adoption of new behaviours. During the SARS pandemic, ecommerce thrived. The 2008 financial crisis sparked the Uber and Airbnb revolution. Can you guess what COVID-19 has sparked?

    A dream come true?

    Working from home is now a thing. Before COVID-19, how many grouchy conversations did you have about working from home? If you’re anything like me, quite a lot. What stood in the way? The ship doesn’t sail until everyone’s on board. So here we are, we’re all on board. And guess what? It isn’t the cruise we all thought it would be. Working from home comes with a price. That price is a detrimental loss of innovation. Team cohesion, constant contact and communication, all drive inspiration. Without inspiration, there’s no innovation.

    It seems that the only way to get innovation is to stop working remotely. That has one obvious ramification, we’re still in the midst of a pandemic, and people’s health is at stake. There’s another, less obvious ramification – working from home has increased productivity. Without the constant distraction of chatty colleagues, frequent coffee breaks, and adhoc tasks, productivity has shot through the roof. The dilemma is, do you kill productivity to drive innovation, or do you kill innovation to keep increased productivity? Increased productivity is a short-term win. It improves your bottomline in the here and now. Innovation is a long-term game. It gives you an edge when it comes to penetrating new markets, optimising processes, and building better products. You can’t pick one; you need both.

    The making of innovation

    There are many hypotheses as to what drives innovation within a business. Some will tell you that it’s a combination of smart people, process and policy. Others will tell you that innovation is about need, funding, and research. Clearly, it has something to do with being around people; else, our isolation from one another wouldn’t have made such an impact. In its simplest form, innovation is born when your perception of an external situation is altered by an internal shift in perspective. The shift will help you see the situation from a different angle, which opens you up to other solutions.

    Think of it like a Rubik’s cube. You’re not going to solve a Rubik’s cube if you just look at it from one side. What causes these shifts? Empathy. What causes empathy? A leading cause is listening to and understanding other human beings. There are outliers who seem to generate innovative ideas out of nothing, but it is very likely that they’re just really good at understanding people’s needs and shifting their own perspectives accordingly.

    More talk, less meetings

    So, where does that leave us? What’s the solution? Is there some sort of killer app? The answer is no. But perhaps, now that you’re aware of the innovation issue, you can make more of an effort to keep in touch with your colleagues and do some active listening. Video chats don’t need to be restricted to meetings.

    The year 2020 has been an absolutely devastating trial for everyone. There have been a record amount of retrenchments, economies have crashed, and things seem bleak. Like Hercules, we will overcome these trials. Most of us still have our pants, and that puts us a step ahead of him.

  • The pitfalls of targeting digital audiences

    The pitfalls of targeting digital audiences

    I was looking at some data from a client’s ecommerce platform, and I noticed something rather shocking. The segment that all of their budget and creative was aimed at (the millennial) was only responsible for 50% of sales. The other 50% came from a range of age groups who seemed to be returning to the platform simply because they liked the product. A sample of one is hardly compelling, but it did take me on a journey of seriously considering how we set up our target audiences, especially when it comes to using these broad labels like ‘millennial’ or ‘Gen Z’.

    I’ve sat in countless agency presentations where the word millennial is taken out and paraded around like it has some kind of meaning. As I delved deeper into the topic, I realised that any sort of generational classification is actually quite meaningless. My starting point was looking at how people’s attitudes shift as they move through different stages of their lives. While most of my research centred around the physiology of the human brain and how it ages, I will spare you the science and get to the point. As we age, our brain changes. As our brain changes, our priorities change, our abilities change, and how we make decisions changes.

    Younger people will be more open-minded. Older people will be more set in their ways. It has nothing to do with your generational label and more to do with how old your brain is. As you get older, you’ll move from being like a millennial to being like a Gen X’er to being more like a baby boomer. The labels and descriptions should change as you do, but they don’t. If you’ve been labelled a millennial, you’ll be one until the day you die. All the descriptions that go with it will be yours forever. And I think it’s plain wrong.

    The labels are wrong, but what has that got to do with my ecommerce example? It goes beyond labels. Not only is your generational label irrelevant, so is the year you were born. Looking at adoption rates for new technology, it takes older people as little as four years to catch up and use the technology adopted by younger people. While you could say that younger people are technology-centric, we’re almost on a level playing field, all things considered. If you are using age-based targeting, you need to very carefully examine whether you’re not losing out on a much broader audience. If your sales are coming from other age groups despite your marketing efforts to a single group, you might be sitting on a goldmine. A shift to more inclusive audience targeting should be on the cards.

    In the ideal world, you’d want to leave all this third-party audience nonsense behind you. Third-party data (like Facebook and Google) should only really be used to generate first-party data (stuff that you own). Constantly using other platforms to drive your sales means that you’ll always be at the mercy of the tech giants. Once you have your dataset, you can break free of their rules, regulations, and generally poor quality of the data provided to you. You can move into a world where you can grow and segment your data where and when you please.

    Back to the ecommerce data I first mentioned, 15% of the sales came from owned data. That dataset is not a priority, and yet it is generating sales for a far smaller budget than the social budget. Social generated just 1% of the sales. Leave generational and age targeting behind. Build your own audience database. Get rich.