Online shoppers value unique digital experiences

Online shoppers have little tolerance for ineffective or clunky purchasing experiences. Consumers expect reliable sites and easy ordering and fulfilment, in large part because of the elevated transactional experiences digital commerce leaders like Amazon, takealot.com and others have proven possible. Free shipping, shipping tracking and information about returns are the top three capabilities services online shoppers expect brands and retailers to offer.

Online shoppers seek out digital experiences that are on par with what is available from a physical retailer: zero fees for receiving a product, complete knowledge of when their purchase will arrive and access to no-fuss returns.

Now that there is an almost universal expectation for seamless experiences online, brands and retailers must push into experience-driven commerce territory to stand out. An emphasis on experience-driven commerce has not diminished the importance of factors like convenience, selection, search and price to shoppers. Rather, brands and retailers must master these capabilities to even earn shoppers’ consideration, and then go beyond them to differentiate from competitors.

Consumers go where they can receive the most seamless, memorable experience, not just the best price or delivery options. With standards for seamless transactions so high, content represents the key differentiator for brands and retailers to earn business.

Online shoppers may turn to popular marketplaces and retail giants for perks like low prices, but they appreciate how brands and retailers can offer memorable, educational content experiences. Personalised content experiences enable brands and retailers to really shine.

Regardless of where shoppers choose to engage a company, they should be able to trust the accuracy and completeness of the information they find. It’s clear that brands and retailers must approach content marketing with a clear strategy for scaling and delivering experiences that are relevant to shoppers’ personal needs.

Introducing a fraud-fighting first in South Africa

The PWC Global Economic Crime and Fraud survey 2018 South Africa cites that South Africa has the highest level of fraud in the world. PWC’s 2018 Fraud Report estimates that R100 billion was lost in revenue due to fraud.

In our age of all things digital, high value documents can be fraudulently altered within minutes with free PDF hackers, but technology can also provide a solution.

The DigSig from iPLATE Technology is fighting fraud on the front lines. It is the first and only technology that can actively protect businesses against fraud. “Scanners, PDF documents and universal fonts make forging a document child’s play,” says Nicola Tempest, Director at iPLATE. “The solution lies in making information on these documents ‘unalterable’.

Revolutionary anti-fraud technology, a first in South Africa, creates a DigSig, or digital signature, secured in a QR code that is embossed onto a document or encrypted onto a digital platform. The DigSig secures the authenticity of the information by securing the information digitally, thereby protecting the original data and making it immune from alteration.”

The iPLATE DigSig is a revolution in the fight against counterfeit documents like pay slips, proof of payment, proof of accounts, title deeds and academic qualifications.

The cost of proactively preventing fraud pales in comparison to the costs that are incurred to prosecute it. 19% of South African organisations have had to spend between twice and ten times as much on investigations as the original amount lost. (PWC Economic crime survey 2018)

“The DigSig is a digital signature secured in a QR code that is embossed onto a document or encrypted onto a digital platform,” explains Tempest. “The DigiSig secures the authenticity of the information by securing the information digitally, thereby protecting the original data and rendering it immune from alteration or forgery. The authenticity of the information can be checked using the iPLATE app that is easy downloaded from both Apple and Android app stores.”

“Levels of detection are still being outpaced by fraud risk. The rules are changing for businesses, profoundly and irreversibly, with tolerance for corporate and/or personal misbehaviour vanishing. Not only is public sensitivity about corporate misconduct at an all-time high; in some cases, corporations and leaders are also being held responsible for past behaviour, when the ‘unspoken rules’ of doing business might have been more lax. PwC’s 21st CEO Survey underscores this theme, with chief executives citing trust and leadership accountability as two of the largest business threats to growth. All of this points to a heightened risk of incidents of fraud or economic crime occurring, and to a need for organisations to take the lead in preventing it before it can take root”, says the PwC 2018 report on economic crime.

“We’re excited to be bringing this innovative technology into South Africa which is already having significant impact among both small and large businesses,” says Nicola.

Why more retailers are going green, by Iggy Sathekge

Every week, around the world, an area of floor space the size of Paris is constructed. With building and construction comes harmful emissions that remain with us for decades, threatening our environment, livelihoods and economy. Buildings and construction contribute close to 40% of the emissions causing climate change today.

The recent World Green Building Council survey found that, because of climate change, 77% of organisations are looking to reduce their energy consumption and greenhouse gas emissions. Green buildings are growing in popularity – particularly in the retail sector – and not just because of the positive impact on the environment, but on people and profits too.

Understanding green buildings

Green building refers to both constructing, operating and maintaining a building that is environmentally responsible, resource-efficient and sustainable. Green buildings consume less energy and water, have less indoor air pollution, and manage waste more effectively – reducing the negative impact of construction and development.

South Africa currently has over 100 certified green buildings – one of which is the Menlyn Park Shopping Centre in Pretoria, the country’s largest green retail space. In 2014, Pareto re-invented its 500-store, 170 000 m2 mall to go green, introducing sustainable building materials, sophisticated metering systems, responsible transport options, air quality sensors and waste management programmes. As a result, today Menlyn Park uses 49% less energy and 71% less water than SANS204 compliant buildings.

Retailers going green

Because shopping centres boast large floor spaces (that need to be cooled or heated) and thousands of occupants (with ablution needs), the need to go green is pressing. But the benefits are many. Outside of tackling global warming, lower utility and operational costs benefit owners and tenants, while healthy, attractive indoor environments result in less sick days for staff and longer stays for shoppers. Something as simple as introducing more natural daylighting and greenery, for example, can increase sales by 40%.

For South African retailers, who are regularly plagued by local issues like load-shedding and water shortages, green solutions also mean more uptime and less disruption. By installing solar PV panels, Massmart has been able to produce some 4,4 million kilowatt-hours of renewable energy a year, accounting for 60 to 80% of the building’s daily electricity needs.

Millennials expect green

Going green is also likely to appeal more to today’s millennial consumers, who are increasingly dedicated to wellness. A Nielsen study found that millennial consumers are willing to pay extra for sustainability. While this is currently more for the product itself, it’s not long before it expands into the environment from which the product is sourced.

The “Australian Food and Grocery Council’s Green Shopper Summary Report”, for example, found 96% of shoppers place importance in a retailer’s efforts to reduce their environmental impact. The renovation rate of shopping centres in Europe is also 4,4% higher than other buildings, as consumer demands shift and expectations for more sustainable solutions increase.

The opportunity in front of us

South Africa currently has the sixth most shopping centres in the world, with close on 2 000 individual centres, and hundreds of new stores and expansions in the pipeline. Given the current impact of buildings on the environment, and the increasing size of malls today, this presents a massive, untapped opportunity for us to make malls greener, addressing climate change and promoting wellness on a broad scale.

The World Green Building Council has set a goal for all new and existing buildings to be net zero carbon by 2050. It’s an ambitious goal, but achievable if more stakeholders join the cause. As Pareto, we have committed to creating a base for knowledge-sharing, leadership and overall expertise within the South African built environment, so that sustainability is something we can achieve together.

About Pareto

Pareto is one of South Africa’s largest retail property companies with a portfolio worth R25 billion. That portfolio includes some of the country’s most prized regional and super-regional shopping centres, including Menlyn Park, Africa’s largest mall at 177 000 m2 and a 25% stake in Sandton City, the continent’s most expensive retail space per square metre.

About the World Green Building Council

The World Green Building Council is a non-profit organisation and global network of national green building councils. It has member councils in over 70 countries worldwide, which collectively have    49 000 members (25 000 member companies and 24 000 individual members).

The organisation is committed to achieving the following goals by 2050: limiting global temperature rises to 2°C; reducing the building and construction sector’s CO2 emissions by 84 gigatons; and ensuring all buildings have net zero emissions. These goals will ensure the buildings and construction sector plays its part in delivering on the ambition of the Paris Agreement.

Creating standout digital shopping experiences

While there has always been a natural uptick in how often people shop online, consumers’ digital habits have started to stabilise. Digital commerce will reach critical mass in 2019. This is according to Episerver’s “Reimagining Commerce” report, an in-depth look at the trends, tactics and technologies guiding brands and retailers in the age of experience-driven commerce.

In a survey of more than 4 500 global online shoppers, 26% of online consumers currently shop online at least weekly. This is just a small increase from last year’s report, which found that 23% of online consumers shop online at this frequency.

Bluegrass Digital CEO, Nick Durrant, points to the report and says the plateau effect in digital commerce leaves companies with a clear mandate to improve or get left behind. “The quality and diversity of digital commerce experiences play an even greater role in the struggle to stand out and earn customer loyalty.”

“To understand just how valuable innovative online shopping experiences are, consider today’s commerce environment. Leaders like Amazon have perfected seamless transactions, leaving fewer opportunities for differentiation via investments in this area,” he explains.

At the same time, traditional retailers are using technology to improve the customer experience and deliver new perks through sophisticated loyalty programs, bridging the online, in-store gap. The average shopper’s path to purchase is more complex than ever, filled with a wide variety of capabilities and attractions popularised by digital native brands.

Vying for consumers’ attention and wallet share will only grow more difficult as additional players enter the fray, further congesting an already crowded digital shopping ecosystem.

To get ahead, brands and retailers must implement dynamic, integrated content marketing and customer experience strategies that forge personal, emotional connections with shoppers beyond transactions.

Durrant says retailers need to look at the principles to achieve standout, experience-driven commerce that converts consumers into customers and buyers into brand advocates. “According to the survey, final purchases require guidance because only 20% of online consumers say all of their online purchases are pre-planned.”

Although seamless transactional experiences are the standard, online shoppers say the top three capabilities or features brands and retailers should support include free shipping, shipping tracking and information about returns.

“Even though 88% of online shoppers say it is the same or higher priority for brands and retailers to offer personalised experiences online in 2019 compared to 2018, 93% say it is the same or higher priority for companies to respect their anonymity online,” he adds.

It is also evident that digital commerce overwhelms consumers, nearly half of online shoppers have failed to complete a purchase online because there were too many options to choose from. Ten percent of online shoppers view an item five or more times before making an online purchase, adding to feelings of always-on commerce.

The survey also says ineffective content has major consequences: incorrect or incomplete content on a brand’s website or mobile app has stopped 98% of online shoppers from completing a purchase.

Social media has evolved into an established shopping channel, particularly for younger shoppers. Influencers are more important than ever  ̶  52% of online shoppers who use social media have clicked on an influencer’s post, according to the report, and a third of those shoppers (31%) have made a direct purchase from the post.

The report states that 21% of online shoppers aged 37 and under turn to social media for inspiration online when they do not have a product in mind for purchase, compared to just 5% of online shoppers aged 38 and older.

Durrant says according to the report, marketplaces are online shoppers’ top destination. “Online shoppers flock to marketplaces to start their online purchase journeys, whether they have a product in mind for purchase (46%) or not (39%).”

According to the report, voice-assisted shopping is most effective for repeat purchases. Voice is gradually becoming part of online shopping habits; more consumers are turning to voice for online shopping.

“Voice technology has also grown in popularity, 17% of online shoppers use voice devices to make purchases multiple times a month or more frequently, and 22% use the technology for research purposes in the same time frame,” he concludes.

The report, however, shows there is a preference for voice research over voice purchase. Brands and retailers should consider using voice to attract frequent shoppers for repeat purchases, while using traditional channels to build relationships with new customers or less frequent shoppers.

In conclusion, 43% of consumers cited a lack of security features as the number one reason they won’t make more purchases via voice-enabled devices. Difficulty searching for and comparing products were also cited as barriers to increased voice purchases.

About Bluegrass Digital (www.bluegrassdigital.com)

Bluegrass Digital is a leading provider of digital solutions for business. We simplify tech. We help you architect and build digital products and services, ensuring you transform and succeed in a digital world. With over 20 years of engineering experience and proven track record, Bluegrass Digital offers expert knowledge and its unique offering that is centred on service delivery excellence.

Canal Walk Shopping Centre launches social media brand campaign

Since their rise in popularity in the mid-20th century, shopping centres in this day and age tend to reflect the communities they serve; delivering on daily wants and needs, as well as acting as central meeting points for young and old. Understanding the social importance a shopping centre reserves within a community led Canal Walk Shopping Centre to launch its latest brand campaign, #CWSquad, spearheaded by three homegrown, Cape Town-based social media icons.

“Understanding our customer has always been of paramount importance to Canal Walk” explains Camilla Lor, regional marketing executive for Hyprop Investments Limited. “Being relevant to our customer within the societal context in which they live, work and play is key to our overall success, and so we turned to influential content creators within our very community to assist in delivering our brand message.”

Introducing the #CWSquad

The #CWSquad is made up of Nadia Jaftha, Aqeelah Harron Ally and Paula Lakay; three young ladies that will over the next year showcase the best Canal Walk has to offer across over 400 stores. When considering candidates for the campaign, it was important for Canal Walk’s marketing team that each squad member selected was not only already a friend of the brand, but also a greatly admired social media content creator offering their followers relevant and entertaining content.

“During the selection process, we naturally gravitated towards Jaftha, Harron Ally and Lakay because they effortlessly reflect who our customers are,” adds Lor. “From meeting friends for coffee and a catch up, doing a spot of wedding shopping, indulging in a shopping spree or two, grabbing a bite to eat or taking in a movie, Canal Walk has been part of these ladies’ lives every step of the way; as it has for so many of our customers.”

Over the next months, the #CWSquad will share with their followers everything from the season’s hottest lip colour, to where to find the best outfit for that special occasion, and anything and everything in between. “What makes the #CWSquad so impactful is not only are they respected and revered by their followers, but that they are genuine Canal Walk customers,” says Lor. “Customers no longer respond to disruptive, non-consumer centric content; they respond to recommendations from those they trust and admire.”

Meet the #CWSquad

Nadia Jaftha

Jaftha, known as the Content Queen by her fast-growing following, is always out and about creating hilarious pranking videos and relatable content. She has a charismatic, outgoing and vibrant personality, which captures her audiences on Instagram and YouTube.

Follow Nadia: Instagram | YouTube

Aqeelah Harron-Ally

The always elegant yet edgy Harron Ally is on the pulse of modest fashion styling and the latest beauty trends by means of her vlog. Along with her husband, Malick, she loves travelling the world and capturing their adventures. She is a total girl-boss, with a strong vision for her brand, Fashion Breed.

Follow Aqeelah: Instagram | YouTube

Paula Lakay

Most know her as Ms Paula Bee, through Instagram and her blog, but she recently got married to become Mrs Lakay. She is all about embracing and nurturing her gorgeous natural hair, as the Curl Queen, giving her followers beauty tips and tricks and capturing her life through vlogs.

Follow Paula: Instagram | YouTube

Plan of action

Month-by-month, Canal Walk will offer its shoppers a more in-depth look into each #CWSquad member’s life; highlighting their unique style by means of in-centre marketing touchpoints as well as via its direct marketing, and digital and social media platforms.

Canal Walk Shopping Centre is open from 09:00 to 21:00 seven days a week.

Social media and digital information for Canal Walk

Website www.canalwalk.co.za

CWSquad campaign information www.canalwalk.co.za/cwsquad

Facebook www.facebook.com/canalwalk

Instagram www.instagram.com/canalwalk

Twitter www.twitter.com/canal_walk

YouTube www.youtube.com/CanalWalkShopping

Hashtag #CWSquad

 

 

 

Leadership disrupted: how retail stays relevant

The former Group MD of Woolworths has several valuable survival lessons for retails brands under siege in the digital age.

“More than ever before, retailers have to be extraordinary to attract and retain customers, because almost is not good enough.” So said the legendary Andrew Jennings – author of Almost Is Not Good Enough – at an intimate breakfast event hosted by Odgers Berndtson – leaders in executive search.

With close to five decades in retail, Jennings has seen it all. Former Group MD of Woolworths, with experience leading some of the world’s most iconic brands like Harrods, House of Fraser, Saks Fifth Avenue, and Karstadt Group, he says retailers today have minimal time to get their message across.

Under pressure

Jennings believes traditional brands are under siege, with stores crumbling globally under the pressure of high rental rates. During the 2008 recession, 6 000 stores in the US joined the “retail graveyard”. Last year, 8 000 stores went under. Worldwide, numerous brands have gone insolvent, including Stuttafords in SA. High fixed costs and the expense of stocking merchandise are behind this, with pressures exacerbated by the rise of online shopping. But it’s not all doom and gloom. There’s a recipe for getting it right.

 How do we bring the shopping experience back to life?

 Jennings’ secret to surviving? “Be relevant.” Here are his four guiding ‘rules’ to achieve sustained relevancy in retail, compiled with input from 33 retail senior executives and CEOs around the world:

 Know your customer. “In 2019, we’re living in a world where the customer is the super being. They know exactly what’s going on at the touch of a button. They want and expect transparency, value for money at every step of the journey, plus convenience. Understand their needs, wants and aspirations. Too many retailers don’t spend enough time thinking about and talking to their customers. Do your staff ask customers how their experience was as they walk out the door? This kind of research isn’t expensive. You can do it on your own at minimal expense and maximum return.”

Hire the right people who are passionate about what they do. “My definition of passion is the ‘human soul on fire’. People make or break an organisation. If you don’t have the right people, get the right people. To move a business from good to great, you need:

  • Leadership that inspires the business.
  • Management that can ruthlessly implement the strategy of the organisation.
  • Frontline staff who exceed customer expectations. I once asked the founder of Four Seasons, Issy Sharp, the secret to service. He said it’s consistency. “Every interaction with a customer can either polish or tarnish your brand.”

His view is echoed by Chania Stempowski, joint MD of Odgers Berndtson sub-Saharan Africa, “You only get one shot at making an impression on your customer. As leading experts in recruitment and succession planning, we’ve seen, time and again, how the right people can instantly transform a business.”

Constantly innovate, and innovate with excellence: “In Amsterdam, I saw the launch of the first plastics-free aisle in a supermarket. In Shanghai, I came across a staff-free, mobile shopping business built on wheels. You access the store and pay for goods via an app. The idea is that because driverless cars are coming, soon the mobile business will drive itself to the warehouse to be restocked. In Taiwan, there’s a bubble tea business where you are served by bots. I’ve always set the bar high on newness. At Woolworths, I set a target of 70% new products per season. A business that’s constantly innovating is usually a successful one.”

Keep change at the centre of your business: “The pace of change today is like driving on the autobahn. You can be going at 180 km/hr and still get overtaken. AI and machine learning will take us to the next generation of shopping experience – think of Amazon’s predictive tech expertise. Retailers have to become magnets. We need to attract people into our stores by being relevant, giving them newness, service and inspiration. Customers don’t just want to be served by us, they want to be thrilled by us.”

Stempowski concludes, “It will take a leader who is well equipped for a disrupted world – with deep strategic clarity, team building skills and thinking dexterity – to keep up with the accelerated pace of change in the retail sector. Our LeaderFit™ model measures mindset and agility to assess a candidate’s readiness to lead in a time of disruption.”

More top tips for retailers from Andrew Jennings – a man with 50 years in the industry:

 

  1. Inventory management is key.
  2. Break down siloes and get departments to talk to each other.
  3. Have a brand point of view; a personality. If someone gets blindfolded and dropped off in your store, you want them to take the blindfold off and know where they are.
  4. Bricks and mortar retailers need an online business.
  5. Customers want a wow factor. They want a memorable experience.
  6. Don’t expand until your core business is 100% successful.
  7. Change the way you recruit. Think differently; creatively. You need young people, they’re the future of retail.

 

 

 

Keeping on trend digitally

As we pass the third quarter of 2019, some interesting trends that were predicted have unfolded in the retail and online market segment. Although online remains relatively small locally, the “Online Retail in South Africa 2019 Study”, conducted by World Wide Worx, predicted it to reach 1,4% of total retail in South Africa in 2018 and hitting the 2% mark by 2022.

The study forecasted online retail passing the R14 billion mark by the end of 2018, as ecommerce started going mainstream. This is due to established online retailers enhancing their digital presence and many traditional retailers started to see significant growth in their online offerings.

In order to harness the online retail growth potential, we can expect to see some changes in the market during the year ahead. According to Karl Hammerschmidt, entrepreneur and CEO of RunwaySale (an online fashion retailer offering over 500 high-end brands at a discounted price to their exclusive membership), online retailers need to fully embrace mobile commerce (m-commerce) and simplify their offering, while continuing to align themselves with changing customer behaviour.

‘Mobile and artificial Intelligence (AI) will be the two biggest trends in 2019 but there are also other subtle, but important trends and changes that will impact online retailers.

Mobile – always connected

More than 60% of RunwaySale’s members use their mobile phones to shop during the week, rising to 90% on weekends. Mobile users are proactive and always connected – using their mobiles in the same way they used to use PCs. From communicating and entertainment to consuming news, looking for deals, comparing prices, ordering food, coordinating rides and updating their activities.

Mobiles keep customers updated and online 24/7, so why wouldn’t retailers want to tap into this and optimise the mobile experience? “A big challenge for the tech teams when it comes to mobile is improving speed and back-end features. Now, more than ever, we have to get things right to ensure everything from stock viewing to delivery and payment works smoothly on mobile devices,” says Hammerschmidt.

‘The checkout process needs to be user-friendly: handling the scale of people checking out simultaneously must not impact the user experience and everything should be done within one page. No endless scrolling! This will prevent cart abandonment, which is around 29% if things are too complicated,” he adds.

Artificial Intelligence

 Using a form of AI to understand your customer and to enhance the online experience is changing the way e-commerce does business. This intelligent data can drive the sales process and having chatbots assisting customers, no matter what time of day or night they are online, leads to satisfied customers.

Payments options expanded, rewards introduced

“People are trusting e-commerce more and are less nervous about using credit cards online. We will also see a rise in new payment gateways, plus rewards and the introduction of a cashback function. All aimed at increasing traffic and sales on the site,” says Hammerschmidt.

The direct-to-customer (D2C) business model is set to grow as is a subscription based service. According to a survey conducted by management consulting firm, McKinsey & Company, the subscription e-commerce market in the US has grown by more than 100% a year over the past five years. The survey revealed 15% of online shoppers subscribed to an e-commerce service over the past year, with 46% subscribed to an online streaming media service, including Netflix.

SA is following this trend. RunwaySale’s successful business model is based on an exclusive, free, members-only shopping society that provides access to designer brands at affordable prices. Now more than 1 million members shop regularly online. Subscriptions and D2C models create personalisation and provide solid customer insights.

Mobile apps will become more effective than emails and messages; in this way cross-sales and personalised promotions and connections can be maintained between the online retailer and consumer.

An online/offline mix

More brick-and-mortar stores are venturing online and some online retailers are now opening stores: think Amazon and YuppieChef. There has been a shift to having a presence both online and a physical space, although these might be smaller concept stores or pop up outlets. The thought is that people will browse and research in store but purchase online based on price and convenience.

“While the online market in SA is small, at only around 1% of total retail sales, it presents huge opportunities,” adds Hammerschmidt. “In our particular market segment, fashion, we have a long way to go to reach the UK figures of 28%, where one in every four dresses is bought online. But we want to be at the forefront of e-commerce and continue to build on our seven years of solid experience. 70% of our strategy items are tech, we continue to look at ways of being innovative, to challenge ourselves to be the best in every aspect to grow.

“In the ideal world we’d see a blurring of the line between online versus offline. But right now, transformation, creativity and strategy to deliver a cohesive customer experience is the way to stand out in this ‘prosumer world’'”.

About RunwaySale

 Launched in 2012 by entrepreneurs Karl Hammerschmidt and Elmien Smit, RunwaySale’s business model is based on an exclusive free members-only shopping community that has access to designer brands at discounted prices. Upon signing, the member is alerted via email, Facebook or Twitter about flash sales of this high-end merchandise. All of the offerings are for a limited period only. RunwaySale is the market leader in the segment and has a loyal, fashion-conscious and financially savvy customer. www.runwaysale.co.za

 

 

 

 

Teljoy: the evolution of a South African brand

South Africans are very loyal to the homegrown brands they grew up with, and among the most renowned is Teljoy, a brand that celebrates its 50th anniversary this year. Rami Sassen, CEO of the company, tells the story about its evolution across the decades.

Over the years, many overseas brands have made their way into the South Africa marketplace, particularly over the past two and a half decades since South Africa became a democracy.

But, as South Africans, we still tend to be most loyal to the local brand names we know and love – the ones we grew up with, that our parents trusted, our friends use and that we, as adults now ourselves, rely on in turn. Ouma Rusks. Rooibos. Mrs Ball’s Chutney. Nandos. To name just a few. And, of course, Teljoy.

In fact, South Africans have Teljoy to thank for installing the very first televisions in the country, which happened when, as a nation, we finally switched on to the wonders of the box in 1974.

By then, Teljoy had been in operation for five years already, since 1969 – the same year that the Boeing 747 made its maiden flight, The Brady Bunch was the first broadcast on the ABC network in the USA, and the first man walked on the moon – an event broadcast live around the world, including on television in other countries!

Realising that although South Africans couldn’t yet watch any of these events on television themselves, Theo Rutstein, the founder of Teljoy, knew that it was just a matter of time before the system arrived on our shores. So, he decided to put his money behind this vision.

As a result, with the seeds for an exciting business idea planted firmly in his head, Theo actually launched the company in 1969 with a forward-thinking campaign that gave people the opportunity to book a television then already for rent, in anticipation of the big switch.

And that’s how it came to pass that Teljoy installed the very first television sets in South Africa, in December 1974, and became the very first company in the country to supply sets commercially throughout South Africa.

From there, the ongoing evolution of the brand was set in motion, beginning with the establishment of bricks-and-mortar shops in key locations across the country, providing consumers with the rent-to-own model that has now become the company’s trusted business model.

From ever-increasing ranges of household appliances, to begin with, Teljoy gradually moved to supply furniture. Today, the company can supply customers with anything from the bedroom and dining suites, to couches, coffee tables and even lamps and patio furniture. There’s even a selection of strollers for babies.

Later, as technology and times evolved, a full range of electronics was added to the inventory, from computers and printers to cellphones, cameras, gaming consoles and beyond.

But it’s not only the product ranges themselves that have evolved over time. To keep the “joy” in Teljoy alive and exciting for consumers means being at the cutting edge of retail and understanding how clients themselves want to conduct business in a rapidly and ever-changing world.

Therefore, the way in which the company conducts its business has also kept apace: five years ago, Teljoy first established an online presence and by 2016 the business had gone completely online, centralising all operations to up the game in service delivery and to bring even more value to customers.

The company name is still out there, top of the SA brands, to such an extent that many customers don’t even realise that the bricks-and-mortar shops no longer exist. The transition to online has been a seamless experience for customers. In a world where traditional retailers are struggling to survive, Teljoy ensured its success through an early transition to online.

But perhaps the most interesting thing about how the brand has evolved is in handling the economy itself. Ahead of the pack already 50 years ago with its rent-to-own model, Teljoy’s business model is as relevant today as it was when the company was first established: there’s no doubt that times are tough, but people still need things. What better way to access what you need than by being able to upgrade or downgrade your account at any time, or even cancel it outright, thus avoiding the debt trap that so many South Africans fall into today or – even worse – being locked into hire purchase contracts that seem to last a lifetime.

Great brands endure when they are able to evolve with the times. The Teljoy story has proven to be one of them.

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.