New findings from the Neilson report have identified the top five major factors on grocery purchases are: price, transportation costs, health, enhanced nutrition and package labeling.
Consumers are facing an on-going struggle in this volatile economic environment, which is why an offering of a wide selection of quality, cost-effective, value-orientated products is important.
Liza Bright, brand manager for Eveready batteries comments: “As appliance design and choice changes, battery products must fit accordingly. Power Plus is ideal for low-drain appliances, and Power Plus Gold for moderate-drain. But our range of alkaline (Platinum and Platinum Plus) and lithium products have shown an increase in market-share due to the increased number of high-drain appliances. As well as offering a wide range, we use, and build on the Eveready reputation for value and quality in our marketing.”
More bang for their buck
Promotion sensitivity is seen to be growing in SA with a record of a 38% since 2005, a 3% increase from the previous year. This has been evident in Eveready’s promotion results, it has run successful consumer promotions in-store with giveaways and prizes, but of late, consumers are making purchasing decisions based on price promotions (saving direct to their pocket) rather than prize promotions.
Within the battery market, bulk packs, two for one and head office deals are working the most effectively, as they show I direct saving in the consumers’ pocket.
Though a quarter of survey respondents indicated that retailer loyalty programs have a major impact on shopping considerations, which also highlights the need for instant consumer gratification (price discounts), rather than redeemable rewards.
Distribution and availability
Product availability, or the lack of, is one concern for just under a third (31%) of Africans. De-listing of products is a clear frustration for shoppers. Looking at the continent, Africa has 594 million consumers and 2.6 million retail outlets. After price, ‘I buy brands that are easily available’ was the second decision-making driver. Strong distribution is more key to success in innovations in Africa than the rest of the world.
There are 120 stores per million of the South African population, but in the survey, 57% of South African respondents said they shopped at the same store they always do. The reason isn’t defined, but the soaring fuel prices are affecting consumer choice, 37% of global respondents consider the cost of travelling to buy groceries a major obstacle.
Brands are facing growing competition from house brands. In recent years there has been a steady increase, with South Africans preferring to buy house vs name brands (59%). This presents a challenge for name brands like Eveready. Bright explains: “Space in store is limited, with preference to house brands. Teamed with their, on average, lower price to name brands, we need to communicate the value, selection and quality offering we have, to sustain consumer loyalty, when price prevails in the current market.”
The report also revealed that a quarter of its global respondents say they purchase more ‘green‘ products than they did a year ago. And, 20% are willing to pay higher prices for environmentally friendly/energy saving products, this is reflected in Eveready lighting’s leap in sales for its energy saving light bulbs, from 2011 to 2012 sales have increased by 17.96%.
Organisations are making large investments to facilitate innovation of new green product lines and also to improvise existing ones to make it more environment-friendly, and the market is responding to such changes by preferring green products over conventional products.
Various factors influence consumer’s green product purchase decisions studies have highlighted the importance of efficient distribution as a factor influencing green product purchase as well as an appetite for attractive credit schemes for purchasing green products with an understanding of the long-term benefits.
Consumers are becoming more fickle as they realise the need to manage household budgets effectively, and brands, need to convey their value message and level of quality to differentiate, as price becomes the driver in purchase decision-making.
Author: Kimberley Nanson