The Evolution of the Franchising Customer
The rise of the ‘hybrid consumer’ is an emerging and growing trend with significant implications for the South African franchising industry. It is pivotal that these new customers are understood so as to leverage a profitable relationship with them. At this year’s FNB Franchising Leadership Summit, Dion Chang, trend commentator and founder of Flux Trends, will be discussing the rise of the hybrid consumer. Chang defines a ‘hybrid consumer’ as someone who shops both online and offline.
Morné Cronjé, Head of FNB Franchising says, “To service a hybrid customer is like having two companies at the same time because you've got to run a virtual and a physical store, which in the end could be costly for the franchisee and franchisor. Retailers could be reluctant to service hybrid consumers who shop both online and offline, but if we fully understand these customers, it could be a profitable experience.”
“A year or two ago, people were just considering an online or offline option in terms of e-commerce retail, and we’ve since discovered that there are a lot of things in between,” explains Chang. “One of the most interesting things that have happened with e-commerce has been a splintering of business models. New, niche business models have cropped up, which is why one size does not necessary fit all.”
While bricks and mortar retailers have the advantage of impulse shopping, retailers must be visible both online and offline to keep ahead of consumers in order to set them apart from their competitor.
Chang notes that there are two trends: ‘show-rooming’, where people go into a store, compare prices and then buy online, or consumers ‘web-room’, which is more common in South Africa, where people actually do most of the research online and then make the purchase in-store.
“While online shopping in South Africa might not be as prevalent as in the rest of the world, retailers need to up their game in retail and have digital gimmicks; they must have connectivity on the most basic level like social media, and website offerings,” says Cronjé.
Some restaurants are tapping into the hybrid consumer by offering tablets instead of menus, and when the patron is not sure what to have, a video is played to showcase how the potential dish is prepared. This is bridging the virtual and physical world.
“Servicing a hybrid customer, especially from a franchisee point of view, is a real challenge because of the possible disconnect, so the franchisor has to ensure that the franchises have the same level of service and marketing message across all online and offline platforms in order to maximise profits,” concludes Cronjé.