NielsenIQ South Africa MD Ged Nooy says: “When consumers came under severe pressure during Covid lockdowns, the implementation of the Covid-19 Social Relief of Distress (SRD) grant of R350 a month from May 2020 saw an almost immediate increase in the spend of the most vulnerable households in South Africa who saw an increase in their monthly spend on groceries increased from R1,002 per month in April 2020 to R1,225 per month by December - an average increase of 22% for these households.”
The previous years when traditional payday weeks were heydays for retailers are just one of the many shifts in consumer behaviour that have been noted. Households have not just changed when they shop, but how and what they buy.
“Our data shows that consumers are making fewer trips to stores, testing cheaper brands in key categories, waiting for their brands to be on promotion and buying in bulk or larger packs when it made financial sense,” says Nooy.
The ‘Homebound Economy’ is here to stay
The data NielsenIQ has collected also shows where the consumption of these goods takes place. “Historically, around 45% of groceries (excluding tobacco and liquor) would make their way into people’s homes and largely be consumed there. Over the last two years, this has changed significantly and now 60% of groceries are taken into the household,” says Nooy.
While these statistics make sense because of the various stages of lockdown, now that Covid-19-related restrictions have been lightened many consumers are choosing to continue consuming products at home as opposed to restaurants or coffee shops even though they have re-opened their doors and have implemented safety protocols to prevent the transmission of the coronavirus.
Retailers and manufacturers have been affected by the change in consumer behaviour.
“Retailers, as an example, are no longer selling as much to small business owners, but rather directly to the end-consumer,” says Nooy.
“Retailers like Pick n Pay and Boxer and from March, The Shoprite Group, have created the situation where consumers can now collect their grants and do their monthly shop on one occasion, without duplicating spend on transport,” he adds.
Data with depth
To be able to derive these insights and understand the changes in not only consumer behaviour but also in the actions that retailers and manufacturers need to take to meet the changing needs, the source and integrity of data need to be scrutinised.
“There is a lot of data that is available in the industry, but it is ensuring that we have the correct data from a variety of sources that we can use to ensure that any trends we communicate are in fact a true reflection of what is happening in the industry,” he says.
NielsenIQ starts each study with what they refer to as depth or legacy data. This data is demographically and geographically representative and provides the baseline from which a change in behaviour can be compared with. To do this, NielsenIQ uses established Consumer Panel Services (CPS) that provides the business with data on behaviour of 80% of the segment, a read that exceeds that of many other firms.
NielsenIQ has the longest running CPS in the country, tracking consumer penetration and consumption across all the LSMs (living standard measures) and SEMs (socio economic measures) for almost three decades, covering 4,000 households monthly, across 200 product categories. This includes modern retail chains, forecourts, wholesalers and independent retailers and any other source of purchase.
NielsenIQ has also made a conscious decision to maintain a manual audit panel. This is linked to the fact that around 90% of retail stores in South Africa do not provide sales receipts to consumers at the point of purchase and a significant proportion of the items that make up the basket, do not carry a barcode.
Auditors, therefore, validate the purchases of consumers through a diary that each one of our panel households maintains as well as a physical audit of the items in the diary to ensure the accuracy of the data. Nooy stresses: “While this is a very manual process, it is the only way to completely ensure the accuracy of the data we collect. This is especially important as more digital approaches in the market have proved very problematic historically producing data that is not as robust as the NielsenIQ CPS audit,” he concludes.
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NielsenIQ, an Advent International portfolio company, has operations in nearly 100 markets, covering more than 90% of the world’s population. For more information, visit NielsenIQ.com.