SA’s top 5 supermarket brands battle it out for the hearts and minds of South African consumers

In the war for the consumer’s share of wallet, South Africa’s top five supermarket brands will need to do much more to fully differentiate themselves on the many complex drivers of customer satisfaction.

The “South African Customer Satisfaction Index (SA-csi) for Supermarkets (2018)”, conducted by Consulta, provides highly scientific insights into the overall level of satisfaction of customers of South Africa’s big five supermarket brands: Woolworths, Pick ‘n Pay, Spar, Checkers and Shoprite.

While Woolworths maintained the best overall customer experience in the 2018 supermarkets index, it was with a decrease in overall score from 2016, while the differentiation is increasingly eroded between the top performing brands. The gap between Woolworths and the rest of the supermarkets measured is now too small to give Woolworths the outright best-in-category classification that they enjoyed before.

Focussed strategic planning and implementation by Spar since 2014 on convenience location, freshly prepared foods and customer engagement are paying dividends, with Spar enjoying significant and consistent year-on-year improvements in almost all measures of customer satisfaction.

The latest SA-csi for supermarkets clearly shows the increasing complexity faced by supermarket brands in meeting customer expectations. As South Africa heads into an environment of extreme economic pressure, retailers will need to invest in understanding how such an environment impacts consumer behaviour, and how they will create exceptional experiences for their customers.

The SA-csi is a causal model that links customer expectations, perceived quality and perceived value to customer satisfaction (the SA-csi score), which in turn is linked to customer complaints (and recovery) and customer loyalty intentions. The 2018 sample for the SA-csi for supermarkets included 1 619 customers who were randomly selected to participate in the independent survey which measures customers’ overall satisfaction and includes a customer expectations index, a perceived quality index and a perceived value index.

Highlights from the 2018 SA-csi for supermarkets in a nutshell:

  • On meeting customer expectations: Industry expectations for supermarkets have increased from the previous measure in 2016. All brands are meeting customer expectations. Woolworths, albeit with a decrease in score from 2016 to 2018, and Spar are leaders in this regard.
  • On perceived value: which measures how much value customers feel they received for the price paid against the quality of the experience, Checkers comes out as the leader, although Spar was the only brand that showed a marked increase in its perceived value score from 2016. It is notable that Woolworths struggles with this aspect of their value proposition and is driving the perception of being the most expensive supermarket brand.
  • Complaints handling: in general, the supermarkets category of the SA-csi performs well on the degree to which complaints are handled by comparison to world standards (close to 50%). Checkers performed best at handling complaints while Shoprite was rated lowest. Pick ‘n Pay recorded the most customer complaints specifically about expired food, incorrect shelf prices and its Smart Shopper loyalty card. All brands experienced an increase in complaints while complaints handling and recovery showed a decline across the board  ̶  complaints handling scores have a direct correlation to customer loyalty.
  • Customer loyalty: Shoprite had the lowest customer loyalty score and a marked decrease in its score from 2016. Woolworth has the highest loyalty score with a marginal increase from 2016 and is indicative of the strong brand equity that Woolworths still enjoys. Woolworths outperforms the industry average on net promoter score (NPS) at 46,8%, which measures the likelihood of a person recommending a brand, while Pick ‘n Pay has the lowest NPS score which also falls well below the industry average. Spar and Checkers are the only brands that have shown an improvement in NPS scores from the 2016 measurement.
  • Best overall customer experience: Woolworths maintained the best overall customer experience albeit with a decrease in score from 2016. The smaller leader gap between Woolworths and the rest of the supermarket brands is likely to put pressure on the customer loyalty and NPS scores for Woolworths in future. Checkers and Spar both scored on par with the industry, while experiencing solid increases in their overall customer satisfaction scores compared to 2016, with Spar showing the biggest improvement. Shoprite had the lowest  overall customer satisfaction score, well below industry average.

“While there were top performers in each of the measures of customer satisfaction, there were no outright winners who performed best across all categories and who are successfully managing all facets of customer satisfaction. Similarly, while brands may have maintained their lead in certain measures, they have done so with decreasing scores when compared with previous years. It’s clear that competitors are using the Sa-csi data to up the ante on previous shortcomings – evident in a number of significant score improvements – while previous leaders may have been lulled into complacency or suffered reputational setbacks which have impacted their performance and customer perceptions. Scores well below par or in a seemingly stagnant state should be cause for intervention if retailers are to maintain profitability in an increasingly competitive environment where consumers are quick to vote with their wallets and shift loyalty when dissatisfied,” explains Professor Adré Schreuder, SA-csi founder and chairperson.

In a time when extreme economic pressure and the accelerating rate of technological developments are significantly influencing how consumers and shoppers behave, customer satisfaction is a big deal, while getting it right is complex and multi-faceted.

“We have come a very long way from when all it took was some customer service from efficient and friendly staff to do the job.  The context of retail has evolved rapidly to extend across bricks and mortar experience to online and digital presence, while consumer drivers such as value, time, experience, healthy eating and ethical living are all culminating in a continuum of disconnect between shopper expectations and the retailer’s ability to satisfy them,” concludes Prof Schreuder.

Key take-outs based on the findings:

  • In tough economic times which South African consumers are currently experiencing, the price of goods is likely to influence consumer loyalty even though they are satisfied customers. It is important to note that price-motivated loyalty is not permanent, so while customers may display less brand loyalty now, supermarkets cannot afford to stop investing in positive shopping experiences.
  • While Woolworths had the advantage of differentiation in the past in terms of instore design, experience and packaging which appealed to the upper end of the market, competitors have made significant headway in this regard. Woolworths have failed to innovate in the instore experience, while Checkers has made dramatic improvements to instore presence as well as packaging. For many consumers, there has been a shift where consumers believe that they can now get equivalent quality, at lower cost.
  • Spar’s sustained focus on community involvement and a key strategic emphasis on convenience location since 2014 are bearing fruit. Spar has focused on getting the basics right and ensuring that they are able to deliver on being in-stock of every product, every day, making it the go-to for a convenient stop to get the daily incidentals which remains a key driver of consumer behaviour. South African consumers are facing an increasingly stressful, time-starved lifestyle which has created a burgeoning demand for convenient solutions that can help simplify their lives.

As a strategic tool for gauging the competitiveness of individual firms and predicting future profitability, an organisation’s customer satisfaction performance, as measured by the SA-csi methodology, provides a predictive indication of how well the firm will perform in terms of future revenue and earnings growth.

Founded by marketing research doyen and customer satisfaction expert, Prof Adré Schreuder, and supported by both academia and industry, the SA-csi is the first independent, comprehensive national customer satisfaction index with international comparability in South Africa and has collected data from more than 400 000 consumers since its inception in 2012. It produces scientifically robust and independent customer satisfaction benchmarks for a multitude of companies, industries and economic sectors, which together represent a broad swath of the South African national economy. The SA-csi forms part of a global network of research groups, quality associations and universities that have adopted the methodology of the American Customer Satisfaction Index (ACSI) via its international licensing program called Global CSISM.

About the “South African Customer Satisfaction Index” (SA-csi)

The SA-csi forms part of a global network of research groups, quality associations, and universities that have adopted the methodology of the American Customer Satisfaction Index (ACSI) via ACSI’s international licensing program called Global CSISM.

Developed by Prof Claes Fornell at the University of Michigan’s Ross School of Business, the Index uses customer interviews as inputs to a multi-equation econometric model. The SA-csi methodology is distinguished from other measures of quality by four significant characteristics:

 

  • ACSI uses a cause-and-effect model that measures satisfaction quantitatively as the result of survey-measured input of customer expectations, perceptions of quality, and perceptions of value (ie quality for cost).
  • The ACSI model links satisfaction quantitatively with customer-survey-measured outcomes: complaints (a negative outcome) and loyalty (a positive outcome).
  • ACSI has a uniform, customer-based definition of quality: “Customer satisfaction with the quality of goods and services consumed.”
  • ACSI treats satisfaction with quality as a cumulative experience, rather than a most recent transaction
  • The 2018 SA-csi benchmarks customer satisfaction using an internationally-recognised model to achieve an overall result out of 100. It provides a weighted average of various aspects of a customer’s experience with the brand, the degree to which the product or service has met, fallen short of, or exceeded their expectations, and how well it compares to the respondents’ anticipation of their experience.
  • Customer expectation refers to the total perceived benefits a customer expects from a company’s product or service. If the actual experience customers have with a brand exceeds the expectation, they are typically satisfied.
  • One of the ways South African consumers can contribute to the SA-csi measurement is by joining Consulta’s propriety research community, ConsultaPanel. ConsultaPanel allows the general consumer a safe but true community platform to contribute to the total offering of day-to-day consumer products and services, by voicing their opinion and participate in our research activities.

 

Methodology

  • The index represents a weighted average of a range of facets related to customer satisfaction. Consulta, the independent consulting company that compiled the index, surveyed 1 619 randomly selected customers of the biggest supermarket chains in South Africa – including Checkers, Pick n Pay, Shoprite, Spar and Woolworths.
  • The research is conducted independently, without sponsorship from any of the entities, and offers impartial insights into South African supermarkets. The 2018 SA-csi for Supermarkets benchmarks and blends a customer expectations ndex, perceived quality Index and a perceived value Index to achieve an overall result out of 100.
  • The SA-csi provides a weighted average of the various aspects of a customer’s experience with the brand, the degree to which the product or service has met, fallen short of, or exceeded their expectations, and how well it compares to the respondents’ ideal of what they anticipate their experience to be.

 

 

 

 

 

Three consumer trends shaping the packaging and printing market in 2019

 

Trend #1: Smarter choices with existing packaging options

“In 2018 we experienced unprecedented fuel hikes, a technical recession as well as a VAT hike. These costs are being passed onto the consumer as goods and products become more expensive, and the cost of living escalates. Yet, at the same time, consumers are demanding more from packaging, such as more sustainable and waste reduction options,” says Stewart.

A study conducted in 2018 by EcoFocus Worldwide found that grocery shoppers in 2018 have greater expectations of packaging than ever before – especially when it relates to healthy food and beverages. Consumers were demanding not only clean labels and food products, but also clean packaging.

Stewart says that while consumer concerns regarding reducing waste may drive new opportunities in the packaging space, many sustainable and waste reducing packaging alternatives are still in infant stages in South Africa; while those that do exist are more expensive to produce. The bulk of these costs are passed back to the consumer in the form of higher priced goods. This presents a catch-22 for consumers who are both cost-conscious and want their packaging to align to their environmentally-aware lifestyles.

“Consumers will need to make smarter choices when it comes to packaging. Take the plastic bag for example. Research by the Environmental Policy Research Unit at the University of Cape Town suggests that South Africans use about eight billion plastic bags annually. This means that plastic won’t be disappearing anytime soon,” says Stewart.

A smarter choice could be to use a 100% recyclable plastic bag.

ITB Plastics, a division of Novus Holdings, has produced a 100% recyclable LLD plastic bag that is also washable. This bag is made with recycled material; is thicker than an ordinary plastic grocery bag (a sturdier product with added strength – robust for carrying up to 20 kg) and; it can be used up to 200 times (before being handed in for responsible recycling). It can also carry frozen and wet products without disintegrating. It is also cheaper than cloth bags.

“It is up to us to use plastic bags responsibly rather than discarding it where it will end up as pollution. Using a plastic bag as a bin liner is one way that will allow it to enter the waste stream, where it is easily retrieved by recyclers.”

Trend #2: Convenience drives the need for more flexible packaging

According to research by consulting firm Deloitte, the global flexible packaging market is expected to grow by 5,2% annually through 2022 due to the very many benefits that this packaging offers such as aesthetic appeal, longer shelf life, lower weight and ease of use. This finding is echoed by LEK Consulting, a global management firm that in 2018 surveyed 200-plus brand managers who identified the increased need for flexible packaging.

“Consumers continue to have a great need for convenience solutions that can also guarantee the freshness of products, which is driving the growing trend for flexible packaging such as pouches and bags,” says Stewart.

Trend #3: More designer, personalised packaging and printing

Stewart says that more and more consumers are looking for personalised, bespoke options when it comes to labels, packaging and printed material.

“The trend toward mass personalisation is being driven by the advent of targeted online content, putting consumers in the driver’s seat. Consumers want something unique to them. Social media, the advent of digital content and how users interact with it have changed the type of experiences that people want.”

At the end of 2019 Novus Holdings launched a limited edition, bespoke gift wrap conceptualised by SA musician Jimmy Nevis to capitalise on the trend of consumers’ need for unique goods.

“In addition, we have seen that the humble label is being used as an extension of companies’ marketing efforts. Personalised labelling – the trend that sees brand owners and consumers personalise a label with a message or an image – will continue to gain traction in 2019,” concludes Stewart.

About Novus Holdings:

Previously known as the Paarl Media Group, Novus Holdings Limited services South Africa and the African continent through its print production of all short to long run requirements of educational materials, magazines, retail inserts, catalogues, books, newspapers, commercial work, as well as security and digital printing.

Novus Holdings is committed to making a sustainable difference in the communities in which it operates, as well as driving skills development and transformation within the industry.

 

 

 

 

HomeChoice makes progress in difficult retail environment

HomeChoice International PLC, the leading participant in southern Africa’s retail homewares and financial services sectors to the expanding urban middle-income mass market, announced steady growth despite a tough second half for the year ended 31 December 2018. Revenue increased by 8,5%, and headline earnings per share remained largely unaltered from the previous year, at 507,7 cents. The group declared total dividends for the year of 194,0 cents per share, up 1,6%.

Chief executive officer South Africa, Shirley Maltz, commented: “Notwithstanding the challenging retail environment, we are seeing the benefit of our continuous investment into improving our customer experience and accelerating our digital transformation, which are both key strategic focus areas for the group. Credit extended via digital channels increased by 43,9% to R1,6 billion.”

Maltz expanded: “Another highlight for us is that the group continues to attract more than 20 000 new customers monthly, attracted by our curated product offers. The group’s active customer base increased by 10,0% this year.”

Capital expenditure, at R126 million, has increased notably in this period and has involved rolling out four additional showrooms and two ChoiceCollect containers, opening a second distribution centre in Gauteng to provide quicker, more convenient deliveries and re-platforming and upgrading technology across the business.

Financial results exhibit moderate growth and strong investment

Group revenue increased to R3,2 billion (2017: R3,0 billion), benefiting from a solid contribution from the financial services business, with loan disbursements up 21,5%. This was tempered by weaker retail sales of 6,3%.

Group EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 3,6% to R821 million. Despite significant cost focus, the group could not sufficiently mitigate weaker top-line growth in the second half of the year. Headline earnings increased by 1,3% to R529 million. The group declared a final dividend of 99 cents and a dividend cover of 2,6 times was maintained.

Retail disappoints in H2

Retail revenue increased by 7,4% to R2,5 billion. After a strong sales growth of 18,9% in H1, trading in the second half of the year was impacted by operational challenges at the South African Post Office (SAPO), with delays in the delivery of catalogues and parcels. The non-delivery of monthly catalogues had a substantial impact on sales. The group spent significant effort to assist SAPO and has also sped up the roll-out of showrooms and container hubs to provide additional channels for customers to collect their products. Increased marketing expenses to stimulate sales and additional courier charges to deliver the products to customers were incurred, translating into an EBITDA decrease of 2,9% to R453 million.

The business is however well-positioned to continue its strong historical performance in 2019. Digital sales contribution increased to 16% and will be further enabled with the launch of new e-commerce site. Supporting the much-loved HomeChoice private label, there are now 120 external retail brands on offer which provide variety to existing customers and attract new customers looking for quality homeware, fashion, furniture and personal electronics. The group has also had very positive customer response from the showrooms and ChoiceCollect, with further rollouts planned for 2019.

“Longer-term targets are for 20 showrooms and up to 100 ChoiceCollect containers across the country,” said Maltz.

Financial Services generates solid performance

Loan disbursements in the financial services business increased by 21,5% to R1,8 billion. Pleasingly, loans to existing customers increased to 84,5% of total disbursements, with strong acceptance of MobiMoney, our three-month, digital-only facility product. Revenue increased by 12,2% to R746 million and EBITDA grew by 13,7% to R357 million, highlighting the annuity aspect of the financial services business. Over 40 000 new customers were acquired during the year, increasing the base by 11,4% to 176 000.

Insurance has demonstrated strong growth in funeral products. Gross written premiums increased by 70% over 2017. “The opportunity remains to add more personal insurance products to the portfolio. This vertical represents an attractive growth opportunity to diversify income and increase customer share of wallet,” added Maltz.

At least 86% of customers are now registered on our digital platforms and a third of loan transactions concluded, are done outside of normal trading hours. The richer Mobi platform creates a portal for a multitude of products and value-added services to be offered to customers via their smartphones. The introduction of airtime, data bundles and electricity sales has indicated the potential opportunity to increase customers’ digital engagement with the group.

Stable credit

The group continued to expand a quality credit book with gross trade and loan receivables increasing by 7,5% (on an IFRS 9 comparable basis) to R3,5 billion. Group debtor costs at 17,2% of revenue was marginally above 16,8% in 2017, and remains within the group’s acceptable risk tolerances. Non-performing loans declined, while NPL cover was bolstered by increased provisions.  The improving performance metrics are testament to the group’s ongoing conservatism in managing its credit book.

Strong cash generation

Cash generated from operations increased by 32,0% to R474 million, driven by a decrease in retail credit growth in H2, good cash collections, a reduction in loan terms and actively managing cash requirements in working capital.

“The strong cash generation capability of the business is evidenced by the fact the group has managed to grow a credit book of more than R3,5 billion while maintaining a net debt to equity ratio (excluding property) of 22,2%,” Maltz said.

Outlook

“We will continue to position ourselves as a leading digital partner in the mass market, with an omni channel offering that provides an attractive and seamless retailing experience across all channels,” concluded Maltz.

The group has serviced this market for more than 30 years and has built up a loyal customer base of more than 870 000 active clients. This base, together with our established digital platforms, offer enormous opportunity to extend our product ranges and service offerings.

About HomeChoice International PLC

HomeChoice International plc is an investment holding company listed on the JSE Limited. The group provides retail and financial services to the mass market in southern Africa. HomeChoice services its large, primarily female and middle-income customer base through two trading operations, HomeChoice (Retail) and FinChoice (Financial Services).

 

Four decades of memorable moments: Sun City is 40!

It has been 40 years since Sun International’s legendary Sun City opened its doors, marking the start of a new era in leisure and entertainment for South Africa. Emerging from the dry African bush in what was then known as Bophuthatswana, the resort, launched by hotel magnate Sol Kerzner, instantly captured the hearts and imaginations of entertainment-hungry South Africans. For the first time, they could explore the previously forbidden delights of topless extravaganza dancers, concerts by international bands and artists, and the thrill of glamour gambling.

Over time, Sun City has evolved into one of the most exciting and all-encompassing entertainment and leisure destinations in the country. It is where wildlife, vibrant nightlife, golf, outdoor adventure, an award-winning spa, a world-class casino and adrenaline pumping fun for all ages combine in one spectacular location. Sun City also borders the game-rich and malaria-free Pilanesberg National Park where visitors can spot the Big Five in their natural habitat from hot air balloons, in safari vehicles, on foot or on mountain bikes.

“After four decades, we are still inspired to give our guests experiences that will live long in their hearts and memories” explains Raul de Lima, Resort GM at Sun City. “Our 40th anniversary is certainly an auspicious milestone that we will celebrate with a super charged line-up of entertainment and events during the course of the year.”

Sun City has recently undergone an ambitious multi-million-rand refurbishment to revitalise its iconic appeal and ensure that it retains its rightful place as South Africa’s entertainment mecca. Today, visitors have a choice of over 30 restaurants, lounges and bars (ranging from fine dining restaurants to casual and family-friendly eateries); state of the art conferencing facilities and a suite of spectacular activities that have broad appeal. There are now seven thrilling water slides at the Valley of Waves; the Chimp & Zee aerial rope adventure course; the Sun City Bike Park; the Adrenaline Extreme adventure hub; Breakout, the mind-boggling obstacle challenge; the Vortex Lounge, and Sun Central which houses movie houses, the SA Hall of Fame and other fantastic attractions.

Sun City boasts a choice of hotels and accommodation. The Palace is a five-star hotel offering grand African luxury; the five-star Cascades offers secluded luxury, the four-star Soho is the resort’s lively Vegas-style hotel, and the three-star Cabanas provides contemporary, island-style accommodation. The resort’s timeshare offering, Sun Vacation Club, boasts self-catering accommodation with a choice of exciting amenities.

“We will not lose momentum garnered over the past 40 years. We continue to source the latest innovations in gaming and leisure to ensure that Sun City remains an iconic premier lifestyle resort on South Africa’s tourism map for another 40 years and beyond. As the old adage goes: life begins at 40,” concludes de Lima cheerfully.

Although the opportunities to create memorable moments at Sun City are vast and diverse, here’s a list of 40 must-try experiences:

Top 10 restaurants and bars

  • Legends ̶  a trendy grill house that pays tribute to the icons that have graced Sun City since 1979.
  • Bocado – offering one of the most beautiful settings to enjoy vibrant Mediterranean dishes.
  • The Grill Room – boasting some of best steaks and grills in the North West.
  • Plume – a chic-classic restaurant offering an evolving, crafted menu.
  • Crystal Court – for the most extensive breakfast buffet and decadent high tea.
  • The Brew Monkey – a gastro pub with a decidedly rustic microbrewery feel.
  • Vibes – retro-styled sports bar.
  • Tusk Bar & Lounge – for cocktails and light meals at The Palace.
  • Luma Bar and Lounge – for lunch and sundowners on the deck at Cascades.
  • The Shebeen – for authentic South African food and beer in a laidback setting.

Top 10 leisure activities

  • The Valley of Waves – featuring an array of thrilling water rides and slides.
  • The Cascades Forest of Lights where the lush tropical gardens and waterfalls are transformed into a magnificent landscape of colour.
  • Encore – the upmarket nightclub located at the heart of Sun City’s always-on party zone, Soho.
  • Rejuvenating spa treatments at the internationally acclaimed Gary Player Health Spa and Gym.
  • Segaetsho Cultural Village – enjoy an authentic Afriganza experience, with traditional and modern infused dance, music, crafts and indigenous games
  • SA Hall of Fame – an interactive hub paying homage to South Africa’s icons.
  • The Crocodile Village
  • Slots and tables games at the casino.
  • Ten-pin bowling.
  • Take the Leeto-Kgolo Heritage Tour on bicycles.

Top 10 adventure/ adrenaline activities

  • The Zip 2000 – one of the world’s longest and fastest zip slides.
  • Accelerator – a heart pumping challenge at Adrenalin Extreme.
  • Breakout – solve a series of puzzles and problems in order to escape a locked room.
  • Para-sailing
  • Jetovator
  • The Maze of the Lost City
  • Game drives
  • Balloon Safari
  • The Grizzly Quad Challenge.
  • The Chimp & Zee Rope Adventure Park – an aerial adventure at treetop level above the Valley of Waves.

Top 10 Sporting activities/facilities

  • Gary Player Country Club
  • Lost City Golf Course
  • Bike Park
  • Tennis
  • Mountain biking
  • Hiking trails
  • Airsoft Call of Duty (target shooting)
  • Drift trikes
  • Rock Venture Mini Golf
  • Segway tours

 

No water necessary: P&G Beauty unveils new hair care brand

The Procter & Gamble Company announced the launch of its first new retail hair care brand globally in four years, inspired by and co-designed with women in Cape Town during the water crisis Capetonians experienced in early 2018.

The new WATERL<SS hair care collection from P&G Beauty launched in Cape Town in March, exclusively at select Clicks stores, one of the leading retailers in South Africa. The range is designed to cater to the different hair care needs of women of all hair types and ethnicities, without the need to use a drop of water. The WATERL<SS collection includes:

  • An ultra-lightweight Foam Dry Shampoo that instantly revives hair, without residue, absorbing excess oil and leaving hair with an amazing scent that reactivates throughout the day.
  • A residue-free Dry Shampoo spray that makes it easy to keep hair beautiful in an instant no matter where or when you need it.
  • A range of Dry Conditioners that provide hair with the softness and smoothness of a traditional rinse-off conditioner, without needing a drop of water.
  • A range of alcohol-free Hair Refreshers with signature fragrances designed for all hair types, providing instant odour-detox, static control, and anti-frizz benefits.

According to the World Wildlife Fund, only 3% of the world’s water is fresh water and by 2025 two-thirds of the world’s population may face water shortages. Leading market research firm, Mintel, has also found that 27% of consumers are now trying to reuse or use less water.

The new WATERL<SS brand was recently previewed by P&G’s chief marketing officer, Marc Pritchard, during the World Economic Forum in Davos, Switzerland as part of the new “innovation agenda” from P&G, the 50L Home, that was announced during the Bloomberg Year Ahead Event.  The 50L Home, initiated by P&G, will bring together companies, policy makers, and communities to develop and scale innovations for the home that help solve the urban water crisis.

“At P&G Beauty, our goal is to be both a force for good and a force for growth. Water is a precious commodity that is under great stress, and we believe that we can play a role in helping people achieve the end result they desire despite water shortages through insightful and meaningful innovation”, said Alex Keith, CEO, P&G Beauty. “This is the intent behind the WATERL<SS brand: whether she has to or wants to use less water or is just on-the-go and needs a quick refresh, we are committed to providing every woman with products that work for her unique hair care needs.”

“With South Africa battling severe climate change, we are excited to partner with P&G Beauty to provide consumers with this world-first innovation in water-less haircare that will not only help them reduce their impact on the environment, but change the way they look at hair maintenance,” conclued Jamie Lane, head of Trade at Clicks.

 

Extend your retail reach with Outdoor

Extend your retail reach with Outdoor

Innovative, practical and effective solutions to business approaches are essential elements in today’s retail environment. In November Shopping & Retail SA had the privilege to meet with a highly successful team in the outdoor advertising arena – and whilst sitting in the boardroom with this team the excitement and enthusiasm in the room was tangible. This is their story:

The innovative directors of SB Outdoor: brothers Daniel, Mendy and Chaim Sarchi

The primary key throughout outdoor retail advertising is: a) effective reach to the target demographic; and b) the ability to communicate effectively with your customer. Truly a science comprising many facets.” – Chaim Sarchi

Focused on one such communication field within the outdoor discipline is a family business which was established five years ago by three very dynamic and enthusiastic brothers. This company has grown rapidly from strength to strength and is now a respected and preferred supplier by media agencies in this segment, to some of the largest local and international brands.

We are of course speaking of SB Outdoor – fuelled, driven and enthused by brothers Mendy, Chaim and Daniel Sarchi.

[During our discussion it was absolutely enthralling to watch this team bounce the ball around the room, each picking up where the other left off – an amazing display of unity, ESP and like-thinking as I have never before experienced. What a cool and together young management team – Ed.]

Outdoor gives advertisers unprecedented control

over how and where their ad is seen

From humble beginnings

Back in 2012 on a visit to their alma mater in Johannesburg, Mendy & Chaim Sarchi noticed that the school sign was looking somewhat ropey. He and his brothers, who were all working at the time, undertook to have a new sign designed and manufactured.

And the rest is history…

The school sign was duly replaced and the resounding success of this first initiative was such that it spurred the trio on to explore other opportunities in outdoor advertising and communication. And so it began. Working from their kitchen at home these entrepreneurial brothers then actively sought out landlords, new shopping malls and retail property owners, offering a range of outdoor advertising options and innovative billboard solutions.

This range of solutions soon became the company’s main focus and hallmark, and was exactly what landlords, property owners and retailers alike were looking for – innovative ideas and professional service.

SB Outdoor honed in even more by concentrating specifically on billboards. And then the business really took off.

Mendy: Unlike TV, radio or print, outdoor is media that cannot be turned off or put down. Viewers cannot fast forward through an outdoor ad as it moves through their environment or they enter the viewing range of strategically placed displays – like billboards. With TV, radio, print and the Internet, consumers have the ability to change the channel, fast forward, turn the page (or miss the page) or close the browser window.

Outdoor is possibly the last place where consumers do not control the ad space. This gives advertisers unprecedented control over how and where an ad is seen. Outdoor is GIVING advertisers more control over their ad space through its unprecedented offering of different media options. This at a time when other ad media are offering advertisers less control.

The company’s first biggish contracts in smaller retail billboards were soon followed steadily by higher visibility billboards on highways and in retail parking areas. Bigger brands across a number of sectors came into the fold, including restaurants, food brands, fast foods, financial service providers, car brands, cell phone service providers and fast-moving consumer goods (FMCG).

The first products developed by SB Outdoor were cable-frame signs, which require little or no capital. Production was, and still is, outsourced to appropriate professionals, whereas systems management and ad rotation sequences – the core of the business – are all managed in-house.

Mendy: We really got traction once one of the bigger property groups came in

with rotational contracts of three months and longer. It was at this point we decided we needed to focus on traditional formats of billboards and building wraps – from highway billboards to billboards in shopping centres. Once that focus happened, and it continues to date, we now continue to secure restaurants, fast food and FMCG clients.

Our Billboards and high impact Building Wraps offer supreme diffusion in a variety of markets and are perfect for both established and growing brands

Daniel: Retail parking areas are high spend environments. People are arriving at a shopping centre to purchase goods – from groceries to big-ticket items. Parking areas are close to where the buying power is – the point of purchase. They are the ideal point to communicate the retail offering of suppliers within and to generate direct income for both the retailers and the property owner.

By advertising within these retail property environs we’re able to give retail landlords what they were looking for, and their retail clients booking with us in turn find the concept very attractive and effective – directly due to the fact that that is where the consumer buying decision is made – right there.

We work very closely with the landlords and see our relationship as a partnership which is built on open and transparent communication, including joint review of monthly revenue reports – and we only take on opportunities that are likely to offer high returns for the landlords and not just sign up and have vacant sites.

SB Outdoor media solutions range from airport mediums through to highway billboards, large building wraps and our media packages. The most popular package the company has developed is a standard format 3×6 meter billboard for the retail sector. It’s versatile, is very easily rotated between locations, is relatively simple to install, and is easy to maintain.

Chaim: We pride ourselves in this 3×6 meter format package. Our focus on this is what has made us a leader in outdoor advertising. The package that we offer our clients, property owners and tenants alike, includes moving these around (rotation) from site to site at two week intervals at no extra charge – for example from Sandton to Pretoria, to the West Rand and the East Rand. This regular rotation almost guarantees the landlord or property owner a fixed income off this structure in their centre; and the retail advertiser enjoys the high visibility and extended reach achieved through frequent rotation without having a high volume of bookings ‘everywhere’.

The success and demand for the 3×6 also enables us to keep the boards let at a high rate.

Daniel: In this short time frame of a few years our client base has grown to include many landlords and property owners from large listed companies to medium-sized and smaller businesses. We are there to meet their needs, advise on their requirements and arrive at a correct solution.

Our solutions hit the spot for both parties, property owner and advertiser – adding value all the time. We make sure that eyeballs are seeing our billboards right outside the shopping centre, with reach, with rotation, and with relevance – in areas that suit the required demographic. Shopping centres see the value of having good brands out there all the time, which in turn brings them good value. We need to get the eyeballs to see these boards – so it’s about marrying the two together… we aim to meet the needs of the landlord and we discuss most strategic positioning – which is why they choose SB Outdoor.

Research shows that static billboards on – for example – a highway route are less effective after two weeks. Rotation every two weeks is most effective, whereas after two weeks the reach “flat-lines” and loses effectiveness.

Geographic footprint

Presently operational in Gauteng and Bloemfontein, SB Outdoor is poised to expand into all regions of South Africa. With initial focus on Cape Town and Durban the company plans to roll out this working model to large and small shopping centres in these regions.

We have a very active sales team,” says Mendy. “And in line with our standard approach of running a lean operation we will work with local professionals in these areas, including print, production, manufacture and site maintenance.”

Daniel on technology and operations:

We will definitely be investing in digital billboards in the immediate future and have already begun negotiations in this regard. There are pros and cons to this technology and we expect to digitalise a few existing sites initially. One advantage is that digital screens anywhere in the country will be managed directly from this office.

With our core staff of nine here in Johannesburg we manage all aspects of sales procurement, site management and accounts. We run a tight ship using a sophisticated, efficient and fully automated operations solution in the office – and we never drop a call.

SB Outdoor is a premier out-of-home advertising company, specialising in billboard and large format communication. The company operates out of well-appointed yet conservative offices in Melrose, Johannesburg.

SB Outdoor’s mission is to provide the most advantageous locations and outdoor solutions which provide the greatest value and return on the client’s advertising investment.

The company takes pride in providing an exemplary level of service by meeting the needs of its clients and providing the most pertinent outdoor communication packages to suit their brand communication requirements and to best complement their vision.

For an assessment to generate additional revenue on your property call SB Outdoor on 011 268 1211 or 083 387 2661

Woolworths Food tops in Ask Afrika Orange Index 2016/2017 Awards

Woolworths Food tops in Ask Afrika Orange Index 2016/2017 Awards

At the same time that Finance Minister Malusi Gigaba was issuing his bleak interim budget, the news was announced that South Africa’s private sector service delivery is at an all-time high.  

Ask Afrika Founder and CEO Andrea Gevers

Although the mood was celebratory at the opening of the 2017/2018 Ask Afrika Orange Index Awards, held at The Venue at Melrose Arch last Wednesday, CEO Andrea Gevers referred to the finance minister’s address with a warning for businesses not to rest on their laurels.

In his speech Gigaba quoted Ben Okri’s poem Poetic Flight which offers the final refrain “You can’t remake the world without remaking yourself” and issued a challenge for all South Africans to remake the world around us. Similarly, Gevers said, “If they want to reap a [healthy] harvest businesses need to remake themselves daily. Those businesses that we see here this evening are the ones that have succeeded in continuously remaking themselves.”

Out of the 32 industries surveyed 29 showed an increase and only three showed a drop. Service levels in South Africa are at their best ever.

The service sector is vital to the South African economy. It drives 60% of GDP, accounts for 63% of employment and of 74% of capital formation. When Ask Afrika started the Orange Index 16 years ago, South African businesses started at a low base, but have steadily climbed year on year. In the early stages of the benchmark, telecoms and banking were rated the highest, they are now at the bottom end of the ranking.

Ask Afrika team with the Orange Index Top 10 Winners

Meanwhile the automotive and food retail industries have maintained top ranking status consistently since 2012 and again held the top two positions, with food retail coming in ahead of the automotive industry for 2017/2018.

Service is a people business which makes it a moving target,” said Gevers. To be successful the sector needs to look at what is happening in society and to approach things from the consumers’ point of view.

We’ve seen that organisations that obsess about themselves or their immediate competitors, will only ever edge forward, they will never leapfrog. We’ve seen this in business and we’ve seen this in politics,” said Gevers.

The 2017/2016 Ask Afrika Orange Index overall winners

It’s not only the winners of the 2017 Ask Afrika Orange Index that had reason to kick up their heels, this year the entire customer services industry had reason to celebrate. This year’s Top 10 winners are:

  1. Woolworths Food

  2. Donna

  3. Cape Union Mart

  4. Miladys

  5. Audi

  6. Sportscene

  7. Burger King

  8. Roman’s Pizza

  9. McDonald’s

  10. Woolworths

Service levels are at their best ever…This is largely driven by technological advances and progress, with systems, and technological solutions and self-help channels and chat bots in place to deliver bigger, better, faster. This massive investment in systems and technology is paying off and ill place the next emphasis on HR and recruitment as the opportunity to differentiate. Brands have mastered systemic excellence, and speed and convenience, the next challenge will be relationships. Not only old people want relationships…everybody does, this is accentuated by technology, wants and needs…whilst the growing systemic success will also make us more demanding, more impatient and probably less equipped to deal with dissatisfaction – said Sarina de Beer, MD Ask Afrika

Technology is top of the trends

The success of customer services can largely be attributed to their investment in advancing technologies and systems. Self-help channels and bots are allowing businesses to deliver on time and more efficiently. But while services are improving there is also a slow shift towards declining emotional satisfaction and a loss of connectedness as a result.

Sarina de Beer, MD of Ask Afrika

With excellent ratings, amazing access to clients, Big Data, world-class systems, AI and chatbots we have the world at our finger tips,” said Ask Afrika Managing Director Sarina de Beer. “The question is ‘what now?’ What will we leverage, how will we integrate and use the current success to build the next tier of success? We need to optimise what we have, use it, go for gold, but find the opportunity to differentiate and be relevant to all our customers’ needs and expectations.

Relationship and connection is the new game, but this is significantly more tricky to conquer than systems and infrastructure. It is significantly more demanding on inter- and intra-personal skills and capabilities.”

Perfect isn’t all it’s cracked up to be

The flipside of the convenience of technology is that consumers are developing an unrealistic expectation of personalised perfection that makes it difficult to deal with the inconsistencies of human behaviour.

The expectation is that every channel, be it Internet banking, online shopping or a company’s social-media platform, should be tailored to specific needs. They should be easy to navigate, be available 24/7 and any issues we have should be resolved swiftly.

As a result when consumers actually deal with a human contact centre, they expect short queues, validation, accurate knowledgeable information and quick resolution. Where self-help channels direct the interaction with a specific set of clear questions and comprehensive answers, human based responses can get messy. After all humans are subjective, frequently get things wrong and their responses can get cluttered.

Ironically, while consumers get the simplicity and clarity they desire from systems, they are becoming increasingly emotionally dissatisfied and lonely.

Comfortably numb behind our emoticons

It might be more comfortable for consumers to deal with bots and processes but it is resulting in disconnectedness and increasing emotional numbness. In a world where humans can rely on a preselected range of emoticons to hide behind online, and curate a personality and lifestyle for others to admire, emotional range is becoming stunted and artificial.

Emoticons are hollow,” said De Beer. “They represent a preselected range of emotions that are not owned by ourselves. We can respond to a statement with an emoticon but we don’t expect to actually have to deal with that emotion.”

If we look at service, reputation, effort, fairness, trust, loyalty and relationships, we see that 65% of consumers collectively state that their emotional experience was one of numbness. ATMs, SMS, and email channels (so non-people channels) do better. When they actually come into contact with a technician the lowest emotional satisfaction is experienced. So our expectations are misaligned.”

A quest for meaningfulness

The customer services industry is no longer about selling a product or service it’s about creating an experience, preferably one that stirs a positive emotion. Successful marketing messages are those that create desirable value statements. Medical aid is no longer just about covering medical costs, it’s about a healthy lifestyle. Cold drinks sell happiness and airlines sell dreams. Consumers no longer aspire to just owning a particular product they want that item to create meaning in their lives.

We want something to tweet about, we post we type we don’t talk, but we need something to share,” said De Beer.

An increasingly exclusive ‘shared economy’

When talking about a shared economy or collaborative non-ownership, we tend to think it’s something new, like Uber or Airbnb, but said De Beer the concept has been around for a very long time. Think stokvels or video shops or libraries. To be a member a person needs to fulfil certain criteria and follow certain rules. To be a member of a library for example, you need an ID and proof of residence, you need to take care of the books you borrow and return them on time.

The difference now is that access to shared economies is becoming a lot more exclusive. To use Uber, for example, you need access to the Internet, a smartphone and in some countries, a credit card.

Interestingly businesses like Uber and Airbnb are coming full circle in an effort to regain control over expectations, consistency and quality. Airbnb is buying apartment blocks and Uber is purchasing fleets.

Tech is the new LSD

Tech has become our LSD, we expect too much on our own terms and have an elevated need for experience,” said De Beer. “We expect more from tech and less from ourselves and our personal relationships.”

On the upside, tech has allowed people a voice and a sense of power parity. Platforms like social media support allow us to protest and people are using it to engage in narratives that increase their social capital.

Tech adapts to my likes on my terms,” said De Beer. “The question is how do you build a relationship without compromise? How do we deal with customer dissatisfaction when they can’t compromise?”

We attach to what we nurture

If we nurture tech that’s what we attach to,” said De Beer. And this disconnected approach is extending to caring. More and more we find that caring is being outsourced to professionals

Take a psychologist as an example. By outsourcing problems, a person gets a full hour to talk about themselves. The professional can offer some insight, but they can’t talk too much and they can’t judge.

What we really need is sociable robots that marry sociability with the convenience of having everything adapt to specific likes and needs. It’s all well and good, but De Beer asks, “Would you let your child have a close relationship with a robotic friend? How do we teach kids the soft skills? Societies fail when we can’t learn together and tech makes us unlearn.

This year we can celebrate lots of hard that has already happened to make this the best year ever for private sector service delivery, but there is still work that needs to be done to connect and build real relationships and real connections with customers.”

Ask Afrika Group is the largest independent South African market research company. The company focuses on local relevance, benchmarked against the global context, and is also a member of European, Market Research Organisation (ESOMAR). Apart from its South African footprint, Ask Afrika Group also operates in a dozen other African countries.  



Choppies: The Entrepreneurial Transition

Choppies: The Entrepreneurial Transition

Choppies commenced its operations with a single store under the name “Wayside Supermarket” in Botswana in 1986. Over the past 31 years, Choppies has grown as a home brand in Botswana and spread its wings into eight other African nations and has become a significant retailer represented in the sub-Saharan African market. Between 1986 and 1992 the group had a single store at Lobaste, Botswana and between 1992 and 1999, it added one more. Since 1999, the group embarked on a fully-fledged expansion drive taking its number of stores to 217 in the African region.

It became the first retail company listed on both Botswana Stock Exchange (2012) and the Johannesburg Stock Exchange (2014). At present, the Choppies group operates in eight Southern African countries: Botswana, South Africa, Zimbabwe, Zambia, Kenya, Tanzania, Mozambique and Namibia and continues its expansion into new, as well as under-serviced areas in the existing markets. The management of Choppies is supported by over 300 qualified professionals.

The African markets are growing steadily,” says Mr. Ram Ottapathu, CEO of Choppies Enterprises Limited. “Other countries (excluding Botswana) where we have operations give us the opportunity to grow into new markets, representing the second engine of growth for the Group. Today, we have over 133 stores outside Botswana, which contributed meaningfully to our profits.”

Market analysts support Mr Ram’s views. In its study on African markets, accounting consultancy firm PWC says that the sub-Saharan African market is remaining as the next ‘Big One’ and it believes that it will remain as it is in the next few decades. “The African economy is one among the few economies in the world with an annual GDP growth of more than 5%. It’s young and connected middle class is growing fast and is still deciding on its favourite brands,” the PWC report said.

In the past decade, many sub-Saharan Africa countries have emerged among the world’s fastest-growing economies. For example, in 2016, Namibia, Tanzania, and Mozambique grew at average annual rates of 6.1%, 6.69 %, and 6.3% respectively. Many African countries are moving towards better administration and deepening democracy. These developments, coupled with urbanisation and an increasing demand-oriented consumer class, have given the retailers a lot to be positive about.

The Choppies group, managed through its Botswana and the rest of Africa divisions, is a food and general merchandise retailer, selling a vast range of products at a great value. The group always puts customers at the heart of its business and always treat them with the utmost respect.

Through its Hyper Stores, Super Stores and Value Stores brands, Choppies serve customers across the diverse spectrum of Botswana society and is expanding its reach into the African continent. Over 50% of Botswana shop regularly in Choppies stores and the group has some of the most loyal customers in the country.

Today, the group operates 217 stores across Africa and employs over 16 000 people 7 000 in Botswana alone.

Choppies’ offer to customers mainly focuses on food and non-edible groceries, clothing, tobacco, beauty products and general merchandise. The offer also includes additional value added services such as financial transactions at the point of sales. In addition to manufacturer-branded products, we have a number of Choppies private label products to suit every budget.

Choppies stores range from large hypermarkets where customers can buy everything under one roof, through to small convenience stores where customers can shop quickly for their immediate needs. In addition, Choppies will be soon launching our online business which will give its customers the opportunity to shop from their homes and have their order delivered to their doors in a fixed time slots.

The group has developed Centralized Distribution Channels (CDC), in Botswana and South Africa and Zimbabwe with a strategic focus on accelerating the level of central supply in its business. At present, supply in Botswana is 60% centralized, while in South Africa and Zimbabwe it is 80%, 50% respectively. The Group aims to take this to new levels by the end of 2018 financial period. At present, Choppies operates five CDCs across the eight countries catering for groceries, fresh and perishable produce.

Choppies group has already been established as an economy retailer and it has a competitive advantage in pricing, distribution centre and store locations. The group achieves its low pricing strategy by having a smooth business cycle maintained by unbeatable distribution centre which supported by trucking network and excellent store locations.

It is estimated that each week over 3.5 million customers visit its 215 stores under three different banners in eight African countries. The Choppies group continues its conquering journey in sustainability, social responsibility, and employment opportunity. It is all part of the group‘s firm commitment to creating opportunities and bringing value to customers and communities across the African continent.

With over 16 000 staff members, the Choppies Group is a significant employment generator in the retail sector in Africa. The success of Choppies business is a result of the collective effort of this massive staff force.

The Group will continue to address the socio-economic challenges faced by the communities it serves through the supply of high-quality, affordable food for all customers while providing significant employment and economic opportunities across its value chain.

South Africa- the next big market for Choppies

At present the Choppies group operates 74 stores in South Africa, the location such as Gauteng, Northwest, Mpumalanga , Free States, Limpopo, KwaZulu-Natal and Eastern Cape. “ We are planning to open another 10 more stores by the end of the current financial year, taking our total number of stores over 80” says Mr Ram.

Choppies’ move comes at a time when the South African retail market faces, various economic and socio economic challenges. Factors like exchange rate volatility, the declining availability of credit and inflationary pressures adversely affected the finances of many households. However, most consumers remain aspirational, with the demand remaining strong for essential FMCG, especially products which are in line with global trends.

However, Mr. Nazzar Mulackal, Director of Operations at Choppies South Africa is confident: “We have already established here as a value retailer. We are very competent in pricing. Besides, we have been widening our product ranges in order to increase our value shares and target a wider consumer group,” he said.

According to a study of the South African retail market by Euromonitor International, grocery retailers continue to dominate retailing value sales in South Africa: “Many grocery retailers are becoming increasingly competitive in non-grocery specialists channels. Some grocery retailers operating in channels such as supermarket have introduced ranges of non-grocery products in their stores in order to showcase their differentiated offers and be more competitive,”

We have implemented aggressive pricing strategies and have expanded our product lines across numerous categories. In addition we have introduced complementary services such sale of electricity, airtime, bill payments, and play tickets,” says, Andrew Coppin, Operations Director of Jwayelani Retail – a retail business acquired by the Choppies group last year.

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Retail solutions on-demand

Retail solutions on-demand

It’s comforting to know that next time you need your shopfront re-designed, shopfitting redone, new signage – or any other retail service – that there is a one-stop professional company on hand to assist at a moment’s notice.

Based in Midrand, BluChip Retail Solutions is headed up by CEO, Brett Stagman. The company is made up of specific divisions for each discipline, each managed by a professional in that field, resulting in a group with design and implementation capabilities second to none.

We live in an on-demand economy and BluChip Retail Solutions is a company that offer end to end solutions, support and service,” says Stagman. “ We are able to transform your dream into a reality with our extensive range of services.”

What differentiates BluChip from its competitors is that the company is able to handle all your retail positioning needs.

Irrespective of the project BluChip has a team of dedicated, committed individuals who are able to offer you the specific services and solutions that you require.

Just some of BluChip’s extensive services include:

Design Services: Liezl van der Linde

An experienced team of Interior designers, architects and industrial designers able to provide a full turnkey design solution.

If you can dream it BluChip can design it.

Digital Services: Chantal du Preez

BluChip are experts in digital display and content management. In the digital world BluChip is inter connected through media, digital devices and digital marketing services.

Shopfitting Services: Simon du Plooy

Each project is approached professionally and individually. An integral part of the cycle is BluChip’s state of the art manufacturing facilities which ensure that deadlines are met.

BluChip is very much “hands-on” in every aspect of every project.

Installation and Civil Services: Dion Mclean

Imagine an empty shell of a space. BluChip Retail Solutions will transform that space into a functional area regardless of your requirements. The company prides itself on providing an entire solution to all industries, thus creating your niche brand in the market.

Project Management Services: Mark Kinnear

By offering a full turnkey solution and covering most store build deliverables in house, BluChip is able to reduce costs immediately, working within your budget to deliver the best solutions.

Retail Maintenance Services: Vernon Gravett

BluChip have developed an extensive network of skilled technicians and subcontractors capable of assisting in all maintenance and project requirements, from shopfitting and shopfronts to digital and civils. Service levels are individually and appropriately designed to suit clients’ needs nationwide.

Steelwork Services: Jonathan Joseph

BluChip designs and manufactures products to specific requirements, versatile, modular, flat packed products are a speciality. A high standard of workmanship with top quality finishes is always assured.

Signage Services: Sakkie Huysamen

BluChip Retail Solutions offer a full turnkey signage solution and services. This incorporates all internal and external signage as well lettering and all types of signage applications.

Retail Property Advisory Services: Adam Bravo

BluChip Retail Solutions are leaders in strategic and property facilitation within South African retail market, with over 1 000 lease agreements under management. The involvement of the turn-key facilitation and a developing focus on retail consultancy provides the edge within this market.

Virtual Reality (VR) Services: Chantal du Preez

BluChip is able to customise a full 360 degree VR fly through of your retail store experience. This will enable you to see an holistic view of your store, determine planograms, understand departmental flows and modify any materials.

Biometrics Services: Conrad Taljaard

Biometric verification is any means by which an individual can be uniquely identified by evaluating one or more distinguishing biological traits. Unique identifiers include fingerprints, hand geometry, earlobe geometry, retina and iris pattens, voice waves, DNA and signatures.

Survey reveals the favourite brands in South African townships

Survey reveals the favourite brands in South African townships

The top brands in South Africa’s townships were revealed in a Daily Sun supplement on 16 May 2017.

Market research company, Ask Afrika, conducted a comprehensive nationwide survey with a sample that is representative of the township population comparing brand usage across 144 product categories and ranking 2 996 brands.

This year 36 Ask Afrika Kasi Star Brands and 59 potential Kasi Star Brands emerged from the study. Kasi Star Brands are woven into the fabric of vibrant South African townships.
The overall 2017/2018 Kasi Star Brands winner and favourite township brand is Coca Cola, with KFC in second place, Kiwi shoe polish third, Koo beans fourth and Mageu No 1 fifth. Coca Cola has been the top township brand for two years running.


Ask Afrika Kasi Star Brands are defined as brands that are used most loyally by South African township consumers. These brands encapsulate a common experience and Kasi consumers are committed to them. The Ask Afrika Kasi Star Brands benchmark is a powerful tool for brand owners to measure return on investment (ROI) in the township market.

 

 

 

 

 

 

The 36 Ask Afrika Kasi Star Brands 2017/2018

Rank
Kasi Star Brands
Category Name
1
Coca Cola
Non-Alcoholic Cold Drinks: Colas And Other Fizzy Drinks
2
KFC
Fastfood Outlets
3
Kiwi
Shoe Polish
4
Koo (Beans)
Tinned Beans/Vegetables
5
Mageu No 1
Milk: Mageu/Maheu
6
Shoprite
Food Retail (Supermarket)
7
CTM
Tile Retail Stores
8
All Gold
Condiments And Sauces: Tomato Sauce
9
Lucky Star
Tinned Fish
10
Sta-Soft
Fabric Softners
11
Clover
Milk: Fresh
12
JC Le Roux
Wine Sparkling
13
Huletts (Sugar)
Sugar & Sweeteners
14
Dettol
Liquid Antiseptics
15
Black Cat
Spreads (Peanut Butter, Jam, Savoury and Sweet Spreads, Syrup, Honey)
16
McCain
Frozen Chips and Potato Products
17
Colgate
Toothpaste (Normal)
18
Knorrox
Stock Cubes
19
Dulux
Paint
20
Defy (Stove)
Stoves / Ovens / Hobs
21
Bostik
Adhesives
22
MTN
Telecommunications ( Cell Main Network Provider )
23
Bull Brand
Tinned Meat
24
Gillette
Razors (Male)
25
Huggies
Nappies
26
BP (Express)
Garage Convenience Shops
27
Fatti’s and Moni’s
Pasta
28
Frisco
Hot Drinks: Instant Coffee
29
Colgate
Toothbrushes: Manual
30
Always (Pads/Towels)
Female Sanitary Products
31
Avon
Eye Make-Up
32
Doom
Insecticides / Insect Repellents
33
Elastoplast
Medicine: Sticking Plaster
34
Ultra Mel
Custard
35
Tastic
Rice (Rice And Couscous)
36
Rama
Margarine / Butter

Methodology
Three criteria were used to define a Kasi consumer in 2017/2018: he or she has to live in a South African township, fall into the socio-economic level (SEL) 3-5 and not have a post-graduate qualification.

This is aligned with Sandeep Mahajan’s definition of a “regular township resident” and excludes the more affluent consumers that make townships their homes. All nine provinces were included in the sample of 4,403 Kasi consumers interviewed, representing the view of 9.3 million Kasi consumers across South Africa. The results were independently audited by BDO and Dr Arianne Neethling and verified by township market expert, GG Alcock.
What drives brand loyalty in the Kasi?
Nothing for mahala, siyazama zama (nothing is free so we make a plan). The Kasi market largely remains a price sensitive market. Kasi consumers are excellent with budgets and they are receptive to special offers. They live in an unreliable and in many cases an unsafe environment, an investment in high quality brands provides a sense of reliability and assurance to the Kasi household.
The top line trends of the Ask Afrika Kasi Star Brands survey reveal a number of loyalty drivers that brand owners and marketers should bear in mind when targeting this market.
Brands are a ‘cheap price’ for aspiration
“I know where every cent goes, every cent is put to a cost, the money is like water through my hands, it touches them then it washes off someone else’s hands.” (GG Alcock 2015: 138)

Kasi consumers, on the whole, spend money more carefully than they used to and say that it is worth spending more money for quality goods. The Kasi shoppers always look out for special offers, but if they like a product they will buy it regardless of price. They are open to trying new brands to see if they like the product, but once they find a brand that they like, they tend to stick to it. Kasi consumers will, however, try out a different brand if it is on special offer.
An investment in brands is seen as a ‘cheap price’ for aspiration. It is important for Kasi consumers that they care for themselves and the people in their household by giving them the best their money can buy.
“Kasi consumers expect quality and usually have a brand repertoire within their loyalty spectrum which they will compare in terms of price points and special offers. They understand the advantage of choice and will choose the best their money can buy. If a brand consistently delivers quality at the right price point, it will be used by Kasi households,” says Dr Amelia Richards, Account Director at Ask Afrika.
Proudly South African

Coca Cola the international giant is continuing to enable a customised approach for their brand. The ability of a global brand such as Coke to merge local vernacular with a personal intimate occasion between two potential lovers, is the ideal recipe for loyal consumption of Coca Cola to celebrate special moments.
Kasi consumers are proudly South African and opt to buy goods that are produced locally, believing that South African products are usually of high quality. They think that it is important that brands act ethically and refuse to buy products from a company that they disapprove of. Kasi consumers support brands that empower previously disadvantaged South Africans.
“The Target Group Index (TGI) data has shown that Kasi consumers are very loyal to South African heritage. Tradition and community is important in the Kasi where people take care of one other. They expect the same from brands that they pay money for,” says Richards, “There is a misconception amongst those that don’t know the market that when Kasi consumers become more affluent they become westernised.”
According to GG Alcock this is not the case, greater affluence does contribute to modernisation, yet township residents often stay close to their cultural and local South African heritage – they become Afropolitan. Brands that want to be successful in this space must first understand the culture and then contribute towards it in a meaningful way.
Never underestimate the Kasi consumer
“eKasi was once a swear word, a place to be feared, but is now a place where life is shared with brands and people that inspire hope, celebrate a multitude of entrepreneurs, community leaders, responsible proactive citizens of both the Kasi and the Emalalini, the rural villages.” (GG Alcock 2015)
Living and doing business in African market places require an ethos and connection to the informal, invisible and intangible. It is vital that marketers targeting this market have an in-depth understanding of this continually changing environment and lifestyle. It is important to talk to aspiration, yet to remain within reach. Many Kasi consumers travel into the cities for work and see the way that brands are being advertised there. It is vital not to denigrate the Kasi consumer through inconsistent brand messaging and tone of voice in cities versus townships.

Sharing and CSI
Brands that share what they achieve in empowering and uplifting disadvantaged communities through their CSI initiatives will garner loyalty from the Kasi consumer.

Not only did the KFC “Add Hope” campaign feed 5 million children during World Hunger month, but it feeds 110 000 children every day. In 2016 the KFC initiative included the unveiling of the wall mural on Vilakazi street in Soweto, increasing awareness for the campaign. The residents can collect seeds from the tree mural on the wall encouraging them to grow their own vegetables and fruit.
“Brands that connect and identify with the language, the culture and local style will win over the hearts of Kasi consumers. Respect is inherent in the Kasi culture as are ethics, caring for the past and present, hope and a belief that we will all build a better future, as a collective – brands are expected to be part of this ethos,” concludes Richards.
Research reports
In-depth Ask Afrika Kasi Star Brands research reports assist with brand planning and marketing strategies, competitive intelligence, consumer profiling, product enhancement and client pitches. There are various reporting options that look at what is driving loyalty in the township market or which are tailored to media and marketing strategies that target the township consumer.