"Most marketers understand that their customers in the higher band of the Living Standards Measure (LSM) are digitally enabled and mostly mobile in their behaviour. But fewer don't yet quite appreciate how quickly smart devices that cost R500 or less are sparking a smartphone revolution among people who were previously too poor to access the internet," said Andre Steenekamp, chief executive officer of 25AM.
Steenkamp has over 25 years of experience in marketing and related fields, and his Cape Town-based digital agency focuses on data and analytics to drive deeper understanding of consumer behaviour.
He argued that the lower cost of smartphones such as the Kicka from Vodacom and Steppa from MTN (both retail for well under R1,000) are playing an important role in expanding access to those who can't afford expensive smartphones.
According to research data from the International Data Corporation (IDC), 2014 saw a record 83% growth in smartphones in the Middle East and Africa, resulting in a market share of 41.9% for the gadgets over feature phones.
Data from local research firm World Wide Worx also forecasts that smartphone usage in SA is expected to top 23.6 million users this year as low cost devices flood the market.
Price is proving to be a deciding factor as there is data that shows that feature phones declined by 4.5% as cheaper smartphones priced below $100 make serious inroads into this price sensitive market.
"Increasingly, a digital customer could as likely be an unemployed youth in a township as a professional working in Sandton. This represents an exciting intersection of opportunity for mobile-savvy brands," said Steenkamp.
Steenkamp suggested that companies optimised their marketing strategy based on the reality of the expansion of mobile technology.
According to data from Juniper Research, mobile e-commerce sales amounted to $1.5 trillion in 2013, and is projected to hit over $3.2 trillion by 2017.
1. Segment your customer base, smartly: Now that your customers across the LSM spectrum are using similar devices to access digital services, you can gain some back-end efficiencies and manage them using similar platforms. But, at the same time, you should still segment your customer base wisely and use the best tools and channels to reach different segments.
2. Remember to optimise the customer journey for a multi-device world: For higher-end consumers, you can probably still assume that they have some access to a traditional desktop or notebook during working hours as well as their smartphone and perhaps even a tablet. Poorer consumers will probably have only their smartphones as their gateway to digital services.
3. Make it easy for customers to complete interactions and transactions from a smart device: Many brands assume that consumers will go to a desktop to fill in a form or complete a complex search, but customers increasingly want to do everything on their mobile devices. All too often, mobile sites are too slow and clunky for customers to complete a task, with the result that they drop off and never get around to completing an interaction.
4. Embrace programmatic buying: When you're targeting the low-end of the market, where margins are low and volume is important, you need to contain customer acquisition costs while maximising reach and frequency. Programmatic buying for mobile is the perfect tool for reaching this market.
5. Social and messaging platforms offer great return on investment for mobile marketing: The adoption rate of social media platforms and mobile messaging is high in South Africa across all demographics. Twitter, Facebook, and WhatsApp have all really taken off in the lower end of the market - they're the natural successors to SMS. They're quick, efficient, and relatively bandwidth-friendly (and hence, cheap to use).
6. You still need a .mobi site: Responsive web design is all the rage today, but we believe that the .mobi site still has a role to play. While websites can claim to be responsive and viewable on a mobile device, there is no keyboard and mouse, so a site primarily designed for a desktop might be clumsy to navigate on a mobile device. Create a user experience that makes sense for the devices your customers use.
Source Fin24 - Cheaper smartphones expand SA e-commerce
