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Low prices are not pulling shoppers into stores anymore, value for money is

| Economic factors

The “lowest prices” are not pulling shoppers into stores as much as they used to - value for money and the shopping experience is pulling feet through the door, according to the latest research by Nielsen South Africa.

“Today’s consumer is demanding. Their mantra is ‘it’s all about me’ and they want the experience, want to be entertained, want to be appreciated and respected. We need to create a simple and enjoyable experience for these consumers. Most of all, we need to make it personal,” said Craig Tagg, MD of Retail Network Services, who spoke ahead of the South African Council of Shopping Centres Congress in Cape Town that started yesterday..

“Shoppers have become more savvy and critical of retail environments and despite being hyper aware of price changes, they also love quality products and demand an experience-driven retail environment. This has put pressure on retailers and manufacturers to innovate and convince shoppers to choose their stores and products over others,” said Nielsen South Africa Consumer Insights Director Kim Reddy.

Shoppers now had more than one store in mind when they shopped, according to data from the 2019 Nielsen South Africa Shopper Trends Report.

This alluded to more bargain seeking behaviour and they also sought novelty, with 68 percent claiming they would “check out” a new store in their area, the report showed.

In terms of triggers for consumers shopping at new or different stores, 22 percent of shoppers said it was because “a new store opened nearby”, 20 percent said word of mouth, while the same amount said they “were visiting friends/ family and went to a store that they usually shop at”, while 18 percent visited a new store because of “media leaflets, a brochure or direct mail.”

“With shoppers always on the lookout for promotions, new stores are seen to be attractive, as these are perceived to have enticing promotional campaigns running,” said Reddy.

The majority of consumers still did their main shopping once a month, however, the frequency of weekly top up shopping was increasing.

“Everyday needs, special offers and meal prep shopping has increased with consumers more willing to spend outside of the monthly shop,” said Reddy.

When it comes to how often shoppers visit specific store types, the penetration and frequency with which they shop at Supermarkets had increased.

Spazas on the other hand had shown a decline in penetration, or the percentage of people who have visited the store over the past week and month. However, the frequency of visits to spazas remained the same as in 2018.

The research found that consumer perceptions around food prices were stable, with only a 1 percent increase ( to 87 percent) in those who believed that food prices were increasing versus 2018, and 12 percent who believed that food prices were stable, the same percentage as the previous year.

Respondents also said they were less averse to purchasing luxury items.

Cragg said small brands and independent retailers would play a key role in differentiating shopping experiences in what would become an increasingly challenging retail environment.

“In light of this, property investors, landlords and shopping centre management companies need to develop symbiotic relationships and take responsibility for nurturing and growing these small businesses,” he said.

Shopper Trends is an annual report based on multiple sources of shopper data including face-to-face interviews with main grocery buyers and influencers, and information from Nielsen’s retail measurement services and consumer panel services, to track shopper behaviour and mindset.


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