There is a disconnect between what companies think drives repeat online and offline business among consumers, versus how they actually behave – resulting in a R12.148 billion lost opportunity for brands.
This is according to the sixth consecutive South African Customer Experience (CX) Report, which has just been released. It has been tracking consumers’ online and offline behaviour since 2019, to understand how brands’ retail experiences affect customers and their purchasing power.
Some 2 000 people were surveyed online, alongside 75 business leaders across various sectors.
This year’s SA CX Report was co-authored by Rogerwilco CEO Charlie Stewart; Julia Ahlfeldt, a customer experience professional from Julia Ahlfeldt Consulting; and Amanda Reekie, founding director of research business ovatoyou.
Explaining how the R12.148 billion is calculated, the report says there were 32.55 million online shoppers in 2023, while an additional 6.38 million will shop online for the first time this year, resulting in a total South African e-commerce audience of 38.93 million.
It notes that if the R71 billion reported e-commerce spend in 2023 (source: World Wide Worx) is divided by the number of shoppers in 2024, it implies the average annual spend per capita is R1 824. The World Wide Worx report indicates e-commerce spend is growing by 29% per annum.
The 2024 South African CX report found that 59% of respondents will shop with the same or greater frequency this year as they did in 2023. Extrapolating the 59% figure onto the projected total audience size of e-commerce shoppers provides a figure of 22.97 million individuals who will shop with the same or greater frequency if organisations address shortcomings.
Taking the 29% annual growth in e-commerce and multiplying the 2023 per capita spend of R1 824 by that gives a 2024 per capita spend of R2 353 – an increase of R529 on last year, it notes, adding that multiplying that by the 22.97 million shoppers arrives at a R12.148 billion opportunity cost.
“Should businesses and consumers close the opportunity cost gap, it is highly likely online will grow even bigger in South Africa, and that brands that can, will delight their customers by offering something completely unique and different to their peers,” says the report.
‘Moments of delight’
According to the report, while 71% of consumers want a reliable service and/or product offering they can depend on and will buy from again and again, followed by the best price (63%), the same percentage of businesses (71%) believe repeat purchases are due to customers trusting them (versus the 54% of consumers who concurred).
“One could be forgiven for believing that price is driving demand in the current cost-of-living crisis, and that is not incorrect – 63% of consumers say it’s why they will buy from a brand again. But what is clear from the research is that consumers want to be wooed by their favourite brands and made to feel special too, so much so that in many cases they are willing to pay more,” comments Reekie.
For instance, 60% report they will pay more for restaurant or fast-food offerings, 56% for beauty or personal care, 56% for accommodation and travel, and 55% for grocery retail, healthcare/medical and clothing/fashion.
On the opposite end of the scale, they are least likely to pay more in return for a positive customer experience when engaging insurers (45%), banks (44%), DIY (40%) and communication methods such as mobile phones (39%).
“Money is really tight right now, so spending is careful and considered, meaning the brands consumers choose to use are likely offering something different through memorable ‘moments of delight’. These so-called moments set brands far apart from one another and it is this extra (last) mile mindset that is winning the war of the wallet,” comments Ahlfeldt.
However, Stewart, Ahlfeldt and Reekie go on to say that in summary of previous iterations of the report, the key insight was that brands, at that time, needed to up their CX game, improving everything from their check-out mechanics, user experience, delivery fees and overall customer engagement, whether for pain points or purchasing pleasure, among others – and that this has largely been done across the board.
“This CX consolidation across brands and sectors now creates a risk; if all of them implement the same changes, but ignore delivering some form of ‘delight’, the uniqueness of any brand is on par with its peers, making the sector homogenised through the offering of ‘same-same’ experiences,” explains Ahlfeldt.
“So, while across every sector, brands are working hard to offer the same seamless experience, ensuring the basics such as making sure purchases work as they say on the box, are received in good time and nick (when buying online) and flawlessly integrate with their in-store experience and, if there are any problems, that they are resolved very quickly, they are becoming a ‘me-too’.”
Coming a long way
It is clear from the report that today’s consumer wants a brand that is easy to find when shopping online (66%), has a range of safe and secure payments (61%), and an easy checkout process (60%).
“These should all be provided as standard by brands; what truly sets them apart, however, is delivering delight,” Ahlfeldt says.
The report says locally, Takealot unsurprisingly came up trumps in this regard, with most consumers citing it as the organisation that consistently delights consumers with great CX.
Checkers and Sixty60 ranked second and Chinese retail brand Shein ranked third. “Even the contentious Temu, which has taken the market by storm on Google since launching recently, and that has aggregated thousands of small producers that put their offerings online for worldwide delivery, had a large mention of being called out for excellent delivery – and they are sending goods all the way from China,” says Reekie.
As is clear from this year’s South African Customer Experience Report, the market has come a long way since the first CX report was released six years ago, says Reekie.
“Today, our report indicates that many more people (24%) compared to last year (13%) claim to have not had a poor brand experience, which is a positive, and significant, leap forward.
“But beyond implementing the CX essentials (which most brands now all do), there is a significant opportunity – and to be frank, urgency – for businesses to deliver a differentiated brand experience and garner brand love among consumers to imbue faithfulness and loyalty in repeat purchasing.
“This can lead to the sharing of their positive experience/s online and via social as well as among friends and family, causing the till to ring, keeping brands top-of-mind and ahead of their category and cross-category peers,” says Reekie.
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