Consumers preferences show significant change
Twenty years ago, a plastic shopping bag had snob value. A Woolies bag was tops, Raymond Ackerman’s Pick n Pay second, Spar and Checkers fought for third place and Shoprite scored big by coming in last, because consumers perceived it to be cheap.
The South African Customer Satisfaction Index (SA-csi) for Supermarkets (2018) conducted by Consulta shows that consumers have largely ditched the differentiating snob appeal, reducing brands to much of a muchness. All five brands were meeting customer satisfaction, which means price being king.
Checkers is head of the queue regarding perceived value, the price paid against the quality of the experience. Woolworths struggled with this aspect of their value proposition and had the reputation of being the most expensive supermarket brand.
With 27% of South Africans unemployed and the rest of the country heading into an era of extreme economic pressure, retailers are investing into understanding how to lure customers with nearly empty wallets.
However, in tough economic times the price of goods is likely to influence consumer loyalty even though they are satisfied customers, said Professor Adré Schreuder, SA-csi founder and chairperson.
“It is important to note that price-motivated ‘loyalty’ is not permanent, so while customers may display less brand loyalty now, supermarkets cannot afford to stop investing in positive shopping experiences.”
Woolworths maintained the best overall customer shopping experience in 2018, but it was with a decreased overall score from 2016. Its lead had eroded to where it was too small to give Woolworths the outright bestin-category advantage.
With Woolworths treading water, and fighting a slumping share price, Spar spent the past five years focusing on accessible locations, freshly prepared foods and customer engagement. The results were a consistent year-on-year improvement in almost all measures of customer satisfaction.
Pick n Pay recorded the most customer complaints, specifically about expired food, incorrect shelf prices and its Smart Shopper loyalty card. All brands experienced an increase in complaints.
“While there were top performers in each of the measures of customer satisfaction, there were no outright winners who performed best across all categories and who are successfully managing all facets of customer satisfaction,” said Schreuder.
“Retail has evolved rapidly to extend across bricks and mortar experience to online and digital presence, while consumer drivers such as value, time, experience, healthy eating and ethical living are all culminating in a continuum of disconnect between shopper expectations and the retailer’s ability to satisfy them.”