Consumers and shoppers: creating an integrated approach. Critical success factors to cutting through the township clutter
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2 What is a Kasi Star Brand? Overall trends and winning categories Consumers and shoppers: creating an integrated approach Connecting with township consumers Critical success factors to cutting through the township clutter
3 Background What is a Kasi Star Brand?
4 How can your brand connect with township consumers? As a result, brands and retailers need to create the link between consumer and shopper related strategies. This will require an understanding of the unique context and mind-sets of the consumers and shoppers.
5 What is a Kasi Star Brand? Kasi Star Brands are brands that are used most loyally by South Africa s township consumers, irrespective of background or living standard. These are brands that define a common experience, often on a daily basis to which South Africa s township consumers are committed to in a real sense. The majority of these consumers put their money where their mouths are, to demonstrate this commitment. Kasi Star Brands are weaved into the fabric of our vibrant South African townships.
6 Kasi Star Brand Territory 76 LIMPOPO NORTH WEST GAUTENG MPUMA- LANGA FREE STATE NORTHERN CAPE EASTERN CAPE WESTERN CAPE
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8 Overall trends and winning categories
9 Commitment to Kasi Star Brands is on the increase Average Kasi Star Brands Index Rating 100,00 90,00 80,00 70,00 60,00 50,00 40,00 30,00 20,00 10,00 % 0, / /2017
10 Consumers and shoppers creating an integrated approach
11 Integration of shopper and consumer strategies Most marketing strategies fail to account for shopper behaviour. It is important to create a holistic solution that bridges the gap for both shopper and consumer strategies. There is specifically a need for an integrated approach in South African townships for brands to create consistent experiences and effective strategies
12 Consumers and shoppers have evolved significantly over time, resulting in increased brand exposure and fluctuating brand loyalty Cultures with a higher degree of collectivism display higher levels of brand loyalty (de Mooij, 1988). However, brands need to deliver on experience and promise in order to retain their loyal customers. A limited amount of store formats and brands More choice due to the expansion of major retailers into townships Poor infrastructure and limited taxi routes (CBD) Lower disposable income = very little room to experiment with new product. Stick with known brands THEN CONSTANT EVOLUTION Improved taxi routes have allowed shoppers the opportunity to experience a wider variety of brands An upward shift in the spending habits and income NOW
13 Township consumer evolution drivers LSM 10 LSM 9 LSM 8 Full time employment being a main source of income and less dependency on social grants. 19% of unemployed consumers are looking for their first job. LSM 7 LSM 6 LSM 5 Primarily younger composition of communities: 30% of township consumers are aged years. This is significantly higher than the SA average. LSM 4 LSM 3 LSM 2 Growth in matric qualification from 43% to 48% in current TGI survey. In addition to this there was growth in post matric qualifications from 9,5% to 11,4%. 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% TGISA 2013 C TGISA 2014 C TGISA 2013 C Sample Size 6763 TGISA 2014C Sample Size 4955
14 Evolving Retail Space The township retail environment is evolving
15 The role of spaza shops and informal trade
16 South African owned spazas tend to be less competitive Business Day Live 23 January 2014 SME South Africa
17 Retail format selection is changing as the township consumer s need to engage with brands, is becoming driven by the overall shopper experience 90,0% 80,0% 76,4% 70,0% 70,7% 60,0% 50,0% 40,0% 34,3% 35,5% 30,0% 20,0% 16,6% 18,9% 10,0% 11,1% 10,6% 12,0% 9,11% 5,21% 3,86% 0,0% Have visited Shopping Mall GARAGE CONVENIENCE SHOPS Visited Deparmental Stores in last 3 months Spaza Shops HOME DELIVERY SERVICE FOR GROCERY SHOPPING Township Supermarkets TGISA 2013 C Sample Size 6763 TGISA 2014C Sample Size 4955 TGISA 2013 C TGISA 2014 C
18 CONVENIENCE Location: Retailers have been expanding their footprint resulting in shoppers being able to conveniently engage with brands. Access: Brands need to be available to consumers and shoppers both relevant to the 36% 15% mentally and physically. Is your product easily available to your consumers? Extrinsic and intrinsic value: Do you offer a product that is needs of these consumers? What solution or need does it fulfil? Shopping experience: How do you engage these shoppers? The store layout as well as the findability of your brand will impact on the overall experience. Convenience has become the social currency of the township shopper and is driving the overall shopping experience
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20 Bulk and top up shoppers tend to utilise different retail formats depending on their shopping mission Bulk shopping stores Bulk shopping trip Top up shopping stores Top up shopping trip Shoprite 36% Shoprite 16% Any Checkers 19% Any Pick n Pay 10% Any Pick n Pay 14% Any Spar 10% Any Spar 10% Spaza Shop 9% Boxer Superstore 7% Other Local Neighbourhood Supermarket 6% TGISA 2014C Sample Size 4955
21 Connecting with township consumers
22 Digital connectivity Technological advances are increasing consumer shopping options and retail options now extend online, and to mobile wallets 54% of township consumers have accessed the internet in the past 12 months This is up from 36% 25% have access to the internet from their homes using laptops or PCs This is more than double the reported figure from the previous study EXPECT INTERNET PENETRATION TO INCREASE FURTHER Data service providers are dropping costs of mobile data The South African Taxi Association is rolling out free wifi in ranks and taxis with the addition of MYCITI buses Smart phones are becoming increasingly more affordable, with 45% of township consumers owning a smart phone TGISA 2013 C Sample Size TGISA 2014C Sample Size 4955
23 TV is the most useful medium, with print highly impactful Television 38,4% Leaflets 24,3% Newspapers (Daily or Weekend Papers) 11,2% Radio 10,0% Word of mouth 8,58% Newspapers (Community or Local papers and free sheets) 8,28% Magazines 6,18% Outdoor 3,57% Cinema 1,13% TGISA 2014C Sample Size 4955
24 Depending on the category, 30% 80% of the final purchase decision is made at the point of sale (POPAI, 2012).
25 Staying relevant will be key to keeping up with the township market If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to the heart. Nelson Mandela
26 Critical success factors to cutting through the township clutter Understand the media consumption patterns of the communities and households within townships. What makes these consumers tick? What is the composition of the households? What are their aspirations? It is important to target these consumers with relevant communication that resonates with them. Relevance in your communication will be key to creating effective engagement-use language that speaks to your audience as opposed to at your audience. Many brands shy away from vernac. The truth is that it can be used to connect further with your target market. In addition to this, ensure that the characters and concepts in advertisements are relatable and resonate with your consumers. Create engagement through unique experiences and sharability of your brand by tapping into the psyche of the community that you are targeting. With digital on the increase shoppers and consumers can be engaged along the shopper journey-creating an unforgettable brand experience. This can be driven further through convenience. It is imperative that brands deliver on their brand promise in these markets to create trust. The brand experience needs to be consistent in order not to create cognitive dissonance between the brand promise and experience. WOM is a powerful form of creating buzz around brands in townships, and one bad experience could lead to a loss in a number of potential consumers of your brand.
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