Last year
WHY ARE PEOPLE SPENDING MORE?
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What motivates shoppers during the holiday season?

- South African consumers are aspirational buyers, but they are becoming more practical and sensitive to special deals.
- The success of sales events such as Black Friday indicates a retail market adopting international practices.
- Debt remains a problem and a concern for many shoppers. But there is a bigger awareness and disapproval of having debt.
- Credit plays an important role for shoppers and contributes to impulse purchases.
- TV, radio and outdoor advertising dominate, but print media also makes a significant impact. Digital advertising is starting to make an impact as well.

The holidays are upon us and the retail windfall period has arrived. With some retailers drawing as much as half of their annual earnings during this period, it is a time of anxiety for them. How can you make sure that you are reaching South African consumers, particularly in a stagnant economy trapped in debt and tough budgets?

TGI, through its local licensee Ask Afrika, laid out some insight for retailers and marketers. Maria Petousis, director of TGI South Africa, painted a picture of a consumer landscape that is not quite as bleak as we think it is, but businesses must also be smart about approaching local shoppers.

According to TGI, the local consumer is heavily indebted. But there is a change: nearly half of consumers do not like the idea of being in debt, an attitude reflected across the income ranges. South Africans are more concerned about debt than Indian and Chinese consumers, but still far less so than the Germans or French.

“Spending has reduced over time but those with credit cards are more likely to spend without thinking. Relative to other countries, SA really stands out as a top country to take advantage of credit.”

More than a fifth of South Africans see credit cards as a way to afford what they normally couldn’t. Yet at the same time, the country’s shoppers are also smarter.

Changing market
Many people have said that sales have spiked in recent months across South Africa despite a slow economy. The opening of the Mall of Africa drew many crowds while both Black Friday and Cyber Monday made a big impact on the retail calendar. “The harder economy is pushing retail operators to be more creative to how they engage shoppers. If you are not innovating and repackaging, you are redundant.”

Spending for the holidays
Retailers focus on the holiday season as consumers spend despite the usual cautions. Luxury shopping continues to be a strong motivation but a clear decline was noted. “There is more focus on the practical and essential even when buying for others. Cash has become a popular choice of gift.”

Reaching the consumer
At least 20% of South African shoppers agree that advertising influences their choices. The top channels remain TV and radio. Though radio has the largest audience and the biggest reach across the country’s hugely varied demographics, TV is not far behind. Both perform consistently as top channels across most global markets and both comfortably account for activity among the heavier media consumers in many countries.  
 
 

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