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Loyalty key for S African retailers

News, 17 June 2016

JOHANNESBURG: Difficult economic conditions mean that South African shoppers are more focused than ever on promotions, with many turning to retailer loyalty programs that can offer cheaper products.

A study from researcher Nielsen, South African Shopper Trends 2015/2016, based on interviews with a national sample of 2 524 main grocery buyers and influencers, found that bargain-seeking behaviour was high.

In terms of their sensitivity to promotions, more than one third of respondents (36%) said they seldom changed stores but actively searched for promotions when shopping, BusinessTech reported, while one fifth (22%) said they regularly bought different brands because of promotions.

With the South AfricanĀ economy shrinking and food prices rising, more than half of respondents (54%) said they now buy only essentials and have cut down on luxuries. Around one third (36%) look to buy in bulk to get lower prices while 30% simply buy less.

"Consumers have always been price conscious but have now become even more so within their choice of stores," noted Esti Prinsloo, Nielsen consumer insights director.

"Consumers actively search across media platforms like broadsheets and investigate retailer websites for promotions," she said. "Given that consumers are pursuing this form of research there is definitely a big gap in the market for the provision of more information via mobile channels."

The study showed that just 7% of South African shoppers had visited a retailer website in the previous month, but two thirds of these (63%) were there for the express purpose of seeking out special offers; relatively few (19%) were actually buying groceries online.

There was also some interest in signing up for a loyalty card (16%) or checking on their loyalty status (10%).

But Nielsen observed that loyalty programs with benefits that result in cheaper products were gaining in popularity and that retailers offering these were reaping rewards.

"In the shoppers' quest for better deals, loyalty cards are seen as a way to get the best for their buck," it said.

Data sourced from BusinessTech, MarkLives, Financial Times; additional content by Warc staff