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Recession’s aftermath haunts SA consumers

Categories: HEADLINES, Housing & Living Conditions, Poverty
New UCT Unilever study reveals consumer pressure

The vast majority of South Africans are continuing to live like they are in the midst of a recession, according to research due to be released by the UCT Unilever Institute of Strategic Marketing.

Entitled 'Wake Up! Shake Up!', the study is considered to be the most comprehensive exposé of the current local marketplace to date. It represents over a year of both quantitative and qualitative research and integrates the expert analysis of 70 of South Africa’s leading economists, academics, financial analysts, industry specialists, as well as business and marketing forecasters.

UCT Unilever Institute researchers discovered that the South African marketplace has undergone a sea-change over the last three years, with socio-economic forces fragmenting and eroding traditional consumer segments. The study presents compelling evidence that consumer behaviour has changed substantively, with many respondents reporting substantial changes in their purchasing patterns.

“The marketing monarchy is over,” said director of the UCT Unilever Institute, Professor John Simpson. “Consumers have emerged from the last 15 years in different ways, with the middle class especially experiencing a variety of socio-economic pressures. We found that the marketing landscape has changed, perhaps irrevocably, and that these changes have been driven by a sustained period of strong growth followed by the sharp downturn that we have experienced in the last three years.”

“Companies and astute marketers and business people have to quickly come up to speed with what it happening in the South Africa marketplace and have to become even more innovative and efficient if they are to stay in business,” maintains Simpson.

The study also tracked consumer attitudes and behaviour over the last 18 months with Bateleur Khanya Research Solutions. The data reveals that 69% of consumers say they are more cautious with their spending than a year ago, while 58% say they and their family are financially worse off than in 2010.

Simpson points out that these percentages have stayed virtually static since the identical question was put to respondents a year ago. Correspondingly, confidence levels appear low with only 32% saying they expect to be better off at the same time next year. Purchasing patterns have altered drastically, with 55% claiming to compare prices more than before and only 19% saying they are spending more freely than a year ago.

The trend of consumers following more frugal lifestyles can be seen in the fact that 55% say they shop in less expensive stores than before, while 68% of respondents say they look at several options before making a purchasing decision.

'Wake Up! Shake Up!' also found indications that consumer apathy may soon be a thing of the past. Better access to information, the recently promulgated Consumer Protection Act, combined with the financial pressure experienced by consumers, seem to be influencing consumers to actively voice their dissatisfaction with a product or service. The Institute found that 40% of respondents representing the entire consumer spectrum reported complaining about a product or service in the last six months, and of these a high percentage had complained more than once.

Simpson said the project’s title was intended as a call to action to marketers and business people alike. "We want local business to wake up to the realities of today’s new marketing imperatives and to shake up their marketing approaches to meet the challenges implicit in this changed consumer environment. Marketers have no choice but to rethink tried and tested marketing formulas.”
Professionals throughout the country will have an opportunity to hear a comprehensive account of the factors changing the consumer environment at the UCT Unilever Institute’s 'Wake Up! Shake Up!' seminars scheduled for the end of May. For more information visit: www.unileverinstitute.co.za.

[25 May 2011]

 

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