The changing drivers that influence consumer behaviour has been saved
The changing drivers that influence consumer behaviour
South Africa, 22 July 2016: Historically, shoppers have made purchase decisions based primarily on taste, price, and convenience— the ‘traditional drivers’ of the food and beverage industry. A global study conducted by professional services firm Deloitte, Capitalising on the shifting consumer food value equation, finds that a series of ‘evolving drivers’ have become an increasingly important feature of the international consumer’s purchase decision. These evolving value drivers include Health & Wellness; Safety; Social impact; Experience and Transparency (an overarching driver).
The US-based study states that the growing importance of these evolving drivers is evident across region, age and income, and Deloitte Africa discerns these same trends in Africa across the region.
“The number of consumers who consider the series of ‘evolving drivers’ as a major part of their purchase decision is growing” says Francis McDonald, Senior Manager for Consumer Business at Deloitte. “For instance, our 2015 Year-end Holiday Survey found that South African consumer conscience influences their purchasing behaviour, with 72% of respondents indicating that they do not buy products involving child labour in production.”
In general, consumers are becoming aware of brands that emphasise elements such as being eco-friendly, organic and responsibly sourced. For example, one South African organic and natural products online store, Faithful to Nature, has reported an impressive 70% average growth over the past three years. Over the past festive season, Faithful to Nature showed 100% growth compared to the same period during the previous fiscal period.
The Economist Intelligence Unit reports that in South Africa, overall spending on food, beverages and tobacco is expected to grow by an average of 10.2% during 2016-2020, reaching R1.1 trillion by the end of the forecast period. “During this period, we anticipate that demand for healthy and high-quality products will continue to rise in tandem with the increasing sophistication of the South African food and beverages market”, says McDonald.
The South African Food and Beverage industry should focus on sustainable value chain development and production. If developed correctly, the country could maintain and grow its competitive edge in both the local and the international markets. Further local and global opportunity could be unlocked by finding ways to connect with, and capitalise on, the shifts in evolving shopping behaviour.
Digital Closing the Information Divide
Driving this shift in purchase decisions are consumers’ well-documented digital addictions and growing tech savvy. Armed with smartphones and internet access, consumers now have reams of information at their fingertips – and the ability to share and explore this information among their trusted online networks and peers. As a result, it has become almost impossible for retailers and manufacturers to ‘manage their messaging’ and brand equity in the way that they have been accustomed to.
It should be noted that consumers who place more value on the Evolving drivers in their purchase decisions appear more likely to use social media, mobile applications, and digital sources to acquire information about products or brands on the path to purchase.
“These types of consumer-led disruptions represent a unique opportunity for manufacturers and retailers to reset and dramatically reposition themselves in the market,” says Dylan Piatti, Deloitte Africa Consumer & Industrial Products Chief of Staff. “It is also forcing brands and manufacturers to take greater responsibility for the role they play in consumers’ lives, and to consider where – and how – they can truly add value to the consumer.
This is an opportunity to create a competitive advantage and to be a leader.” Perhaps even more important, according to the report, is that this will become the ‘new normal’. As such, a paradigm shift is required by companies that wish to stay ahead of the consumer curve, increasing risk for those that don’t adhere to these changing consumer dynamics.
The Value Equation
Indeed, major brands are taking concrete steps toward becoming more responsible corporate citizens in the food and beverage sphere. The Deloitte Health & Wellness report found that members of the global Consumer Goods Forum have made ‘steady progress’ in the implementation of the body’s Health & Wellness Resolutions and Commitments. Tiger Brands, for example, has implemented the Eat Well, Live Well programme to help consumers make better choices about food.
The impending SA sugar tax anticipated for April 2017 is an example of Government leading this concern around impacts on consumer health and wellness. How food and beverage manufacturers react locally, and the actual impact on consumers remain to be seen.
“Rather than being re-active, retailers, brands and manufacturers in South Africa and across the continent have an opportunity to influence consumer behaviour patterns for the better, particularly at a time when consumers are re-thinking their own values and core principles when it comes to responsible food and beverage choices,” concludes Piatti.