Manufacturers expected to be more proactive in protecting consumers from economic crunch

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Comments include, ‘They must stop importing products and use South African products,’ ‘They must buy in bulk and pass the discounts onto us’ and ‘They must negotiate better prices on raw materials so we can be cushioned.’

“The central theme underlying these suggestions from consumers revolves around driving positive economic benefit for shoppers. There is a perception that manufacturers are not doing enough to help shoppers, or could be better packaging and promoting products to ensure greater value and ultimately, improved savings at the tills,” says Gareth Pearson, CEO of BMi Research.

The consumer shopping behaviour survey sought to qualitatively explore the impact of the current economic climate on South African consumers’ lifestyle and shopping behaviour, specifically, what drove consumers to seek value when grocery shopping.

Two primary concerns

The research identified two primary areas where consumers expected to see changes: in the basic cost of goods, and in the actual cost to consumers.

Basic costs - consumers want manufacturers working harder to:

• Reduce basic cost of products
• Reduce their cost prices
• Subsidise essential items
• Use local suppliers rather than importing products
• Negotiate better prices for raw materials
• Ensure discounts are passed onto customers
• Establish factories in townships to reduce the costs associated with transporting goods to these areas

Cost to consumers - survey participants said greater value could be derived by:

• Offering increased product combos that paired essential food items at affordable prices
• Redesigning containers to avoid excessive waste
• Offering improved reward schemes or loyalty incentives
• Ensuring that stipulated weights or volumes of products matched the contents inside, given the broad-ranging perception that the weights or volumes indicated were not always accurate

Repurposing shopping habits
“Consumers want one thing – value for money. Where they cannot actively find this value for money in the store, they are creating their own. This can be seen in the changes in shopper behaviour and the different – and sometimes unusual – ways in which consumers are using products,” notes Pearson.

For example, the research showed consumers would rather buy multipurpose cleaners, as opposed to many different cleaners for different uses; refill packs as opposed to original packs; frozen vegetables (which last longer) as opposed to fresh produce; more affordable canned foods like canned fish as opposed to fresh beef or chicken and more affordable chicken as opposed to red meat.

The findings also revealed interesting trends in product usage. This included the alternative use of products, such as using washing powder instead of detergent to clean baths, using margarine in place of cooking oil, using fragranced body lotion instead of perfume and even saving up last the pieces of bath soap and using them to clean the toilet.

Pack sizes not meeting needs

Pearson says manufacturers would do well to note consumer feedback around pack sizes. Survey participants said they would rather purchase multiple smaller pack sizes where collectively these were cheaper than larger pack sizes; would rather buy smaller quantities of a product where they were not prepared to compromise on the brand and would rather buy single products instead of bulk items.

In addition, there was increased awareness of the cost benefits of purchasing private label products at different times of the month. “Overall, private label products were considered more often, as they were cheaper but many of the participants said they would not consider private label products for certain food items and toiletries. While manufacturer brands were almost always bought at month end, private label brands were bought as top-ups during the month and towards month end,” concludes Pearson.

While the research showed that South African consumers are intent on finding ways and means to provide for their families and balance the budget, it again highlighted manufacturers’ obligation to offer value for money, deliver on promises, provide added value by the way of discounts or promotions to retain loyalty and add to a more gratifying shopping experience.