Marketing influences and retail habits are shifting in the pandemic, and in South Africa’s townships, cash and printed marketing messages still count. These observations are from the 2021 South Africa Township Marketing Report with Rogerwilco and Survey54, which looks at the factors that influence consumer’s decisions in the township environment.
Cash is still king
South Africans still carry cash, with a whopping 80% of respondents preferring it over other payment methods. There are two strongly held beliefs here: firstly, bank charges are way too high (not entirely true). Secondly, cash is untraceable, so the taxman won’t take it from you. Abdullahi Ibrahim, treasurer of the Somali Community Board of South Africa, whose organisation represents the interests of many spazas and informal traders, maintains that a majority of his members would prefer if their customers paid with cards or e-wallets.
With many respondents using their bank accounts only two or three times a month to withdraw their salaries, there are people out there walking around with fairly substantial sums of money in their pockets. Not ideal for them, not ideal for traders. Breaking the cash habit is going to be hard work, but there are benefits for both the retailer and the consumer.
Retailers: 1, Spaza’s: 0
Spaza shops have been a mainstay in townships since the 1970s, and while they are still a go-to shopping choice, their popularity is declining. COVID-19 has exacerbated existing issues that consumers face when shopping at a spaza shop. Price has always been a consideration, but many consumers are willing to pay the higher price in exchange for the convenience of having a friendly neighbourhood store. Expired stock is also a long-standing issue, made worse by less foot traffic during COVID-19’s lockdowns.
These problems have caused the township consumer to re-think their loyalties, and retailers are shifting up the preferred shopping list. The fall of the spaza could be detrimental to SA’s economy, with spaza’s contributing 5.2% to SA’s overall GDP and offering employment to 2.6 million people.
The opportunities are endless here, but one that springs immediately to mind is a white labelled loyalty programme that could bring the township resident into the loyalty cycle while providing a secure future for the local spaza shop.
The last point I’d like to touch on is our respondent’s most trusted sources of product information. Advocacy from friends and family is number one. A good rule of thumb for marketers is this: you’re not talking to an individual, you’re talking to a family. There is an ecosystem there and getting your brand into those conversations is going to require an understanding of all its participants. In second place (and maybe surprising for some) are newspaper inserts. Many marketers are turning to social media to reach this market, but the sweet spot still lies in print.
There are many other topics, ranging from attitudes towards fake goods, ecommerce, and side hustles. The takeaway here, is that if this is your audience, you may know less about them than you think.
*This article originally appeared on Retailing Africa
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