Ogilvy South Africa

Retailers decode future customer behaviour

Now is not the time to ram sales campaigns or overt branding at consumers. Now is the time to reassure them, help them; and keep communicating changes, safety and how you are adding value to their lives. Retailers admit it has been extremely tough to navigate the new trading environment in the shadow of the COVID-19 pandemic. Even those retailers which were allowed to open under hard lockdown made mistakes as they were not geared up to take most of their business online.

Ogilvy and Kantar hosted a panel discussion on May 29, 2020, on The new customer experience during and post COVID-19, with Retailing Africa as media partner, to find out how retailers were handling disruption during this crisis and preparing for changed customer behaviour. Ogilvy’s managing director: retail, Pedro de Carvalho, and Kantar’s commercial expert, Norman Reyneker, facilitated a panel discussion with Beyers van der Merwe, PEP chief marketing executive; Pride Maunatlala, head of marketing, Foschini, TFG; and Katherine Madley, Game vice president of marketing.

Reyneker pointed out that Kantar research showed that consumers remained concerned, with 81% very worried about the virus; and 76% saying it is impacting their normal daily lives. Financial concerns are increasing and consumers are vulnerable to trading down. “Shoppers see comfort in the familiar: 64% are purchasing the same brands as always; 86% prefer to shop close to home; ecommerce has accelerated, but many will still go to physical stores; 73% have avoided superstores and big malls; and 66% have spent less time in physical stores,” Reyneker reported.

As South Africa enters level 3 of lockdown; and many other countries across Africa start easing hard lockdown restrictions to reopen economies; retailers say this is only the beginning of the challenge, as unusual trading conditions are expected to remain for months still. Looking back, the panel of retailers all agreed that the past 10 weeks had been extremely challenging; but that the first thing to do was to manage the fears of their staff; and look after the needs of their customers.

Under hard lockdown, TFG was not allowed to trade within their 4000 stores globally, across their 29 different brands. Maunatlala said they had to manage the fear among their staff first and foremost: fear about the virus; and of losing their jobs. Van der Merwe admitted it has been tough as there is no blueprint for a pandemic. Everything had to change: how they communicated with staff; what the ever-changing legislation meant. “We had to have open and honest conversations, but we have all learned a lot from this.”

Madley said she was proud of her staff for showing up each day, wearing a mask for eight hours and continuing to service customers, while knowing they were at risk, being in the frontline of customer contact. “They showed grit.” This grit was needed as all retailers had to make a massive shift towards safety in store; changing store layouts, bringing in personal protective gear for employees, and installing hand sanitiser stations at every entry point. Staff had to be trained up and entire marketing strategies junked or realigned along with with the radical shift in consumer behaviour. And all this had to be done virtually overnight, when South Africa became one of the few countries to enter had lockdown before infections began to take hold, in order to prepare the health system – and change behaviour.


Top: Katherine Madley, Beyers van der Merwe; Bottom: Pride Maunatlala; Pedro de Carvalho.


A changed consumer

De Carvalho asked how the pandemic would drive major change in store and in consumer behaviour; much like 9/11 did to air travel. Van der Merwe said consumers no longer browse, but come armed with a shopping list to try minimise the time spent in store. “Consumers are also watching every move you make and if someone isn’t wearing a mask or the hand sanitiser bottle at the door is empty,  they will tell you about it.” He said they were fielding 1200 comments per hour, with feedback from customers on exactly these issues.

Maunatlala said there was a different consumer walking through the door now, as women were sending someone else to shop for them – often their menfolk, as Pep also found. Communication is paramount, as shoppers want to know why fitting rooms are closed and if they can make returns safely. “While safety is important, they want to know why we are doing certain things. Stores have to make it easy to find things. Communicating with a mask on is hard, so we need to make communication clear and logical.”

This virus has changed the very reason for shopping for many customers, Madley said: retail therapy. “The visual language has changed completely. People are alone, with a mask, they have a list so they can go in and out as quickly as possible. The aftershocks will remain, but people will go back to loving retail again. I don’t believe this behaviour will change forever. After 9/11 many people said they would never travel again; but travel boomed after that. Human nature reverts.”

eCommerce challenges

Maunatlala advised every store to have a ‘pick up option’ in store, as well as delivery option for online shoppers, as in rural areas particularly, people wanted to walk into a store and see the product before taking it home. While the Foschini group had an increase in online shopping, greater cohesion with bricks and clicks was needed, including with online payment systems. PEP doesn’t sell their merchandise online; and under lockdown, their customers did go online to find product. “Our digital transformation officer is called ‘Corona’,” Van der Merwe admitted ruefully. “It made us realise that we do have to be in this space; whether it means a WhatsApp channel and a website that is mobile friendly for our customer base. It wasn’t just about the ‘buy’ button either. We needed to be a digital shop window at a time when our stores were closed for trading.”

Madley said Game had struggled with their ecommerce site over this time as visits to their site trebled and they didn’t have the people or the means to facilitate the demand. “We had to work very hard every day to meet customer expectations; especially when under level 5, we couldn’t sell half our range. That muddled things considerably. We know we frustrated a lot of customers with our ecommerce.” Maunatlala added that it was so important for the online experience to be a seamless integration with the actual in store environment, which meant that the relationship with your customer was paramount. “This is a whole new world that stretches the omnichannel to others by exposing new worlds to them. We need to create an ecosystem.” It’s why the Foschini brand integrated social media throughout the brand for that real-world interaction with their customers.

Brand messaging

Competition has melted away under the conditions that shoppers are now forced to shop in and retailers to trade in. “There has been a very big change in the atmosphere in retail. Competition melted away as retailers worked together to help customers navigate the new environment.” Maunatlala agreed, saying that women were most impacted by this “Covid moment” and brands needed to “show up” to demonstrate empathy towards their customers and make this time in history easier for them. “The woman’s purse has been tight for a long time. So, any sale or discount in store is a gift. We need to tell her she is getting value, for female customers, that is the most important.” Maunatlala said TFG was also partnering with female brands in store to demonstrate its commitment to women and to buying local. “We must not stop communicating value. That is part of giving back. The cost is high for everyone at this moment; but make sure your customers know what you are doing to help them. For example, we are partnering with grocery retailers to give away food parcels to our account holders.”

Van der Merwe agrees that it starts with purpose during a crisis like this. “It is important not go quiet with your brand. Even though we closed our stores for the first time in history; we did not go quiet.” PEP launched a hashtag #PepCares and overnight swopped out all their advertising and went with a new campaign to show the brand cared about its customers. “Even when we reopened, we didn’t do a call to sales. The world has changed. Availability of product is key, but be honest with your customers and tell them if you are out of stock. Some brands are not being honest, they are trying to hide things. Tell your consumers what you are doing and why.”

This pervasive fear of infection will tarnish the entire retailing eco-system for several months still and shoppers will not shop instore for deals, Van der Merwe said. Brands needed to communicate discounts and offers for customers in different ways, extending sales periods and giving consumers time to take advantage of offers during these challenging times.

The same applies to looking after staff, Madley pointed out, saying that she does not know anyone in retail who has even had a day’s break since the annual festive season holidays in December January. “Retailers have been at it seven days a week. In our business we have 48 000 people, it was important to look after our people and their families.”

Shopper growth post-COVID

Reyneker said research by Kantar showed that consumers were relying on retailers and brands to help them live their best lives. He believes most retailers have responded well to setting up the new environment and enforcing social distancing and setting up the systems required by lockdown regulations. However, financial concerns are real and consumers are trading down: 55% are looking for products on sale; and 72% are paying more attention to price. During these unusual trading conditions, retailers will need to pay more attention to pricing. It could take six months to two years for the economy to recover, depending on who you talk to, said Reyneker. What shoppers want from retailers is practical help and a safe shopping environment: “91% want help in their everyday life; 35% are practical and realistic and brands need to help them live their lives fully, but safely.”

One of the biggest challenges retailers face ahead, Maunatlala said, was footfall in store. “How many people will return? We are still selling current product. We are asking ourselves what we should be offering for summer? What is essential? What will the silly season look like come December? We can’t import products, so what about production?”

Van der Merwe agrees there is still so much unknown ahead and said it was difficult to plan and forecast when regulations changed on a daily basis; as well as information on the trajectory of the pandemic; unemployment figures; consumer spend; infection rates; and how long lockdowns will continue. “Change of plans is the biggest challenge as retailers. We plan far ahead on what products we are bringing into store. In all of this, how do we take a calculated guess as to what is going to happen? We have to take it one day at a time. We can’t exactly plan for Christmas or events like Black Friday,” he said.

Madley emphasised that the reality is that consumer behaviour was also changing week on week as the environment changed week on week. “What we do know is that social distancing will remain with us for a long time in store. Footfall will change. Basket size will change. We will have to constantly calculate how that environment is evolving.”