Customer Experience and Consumer Behaviour in a South African Context

South African consumers are still prioritising savings opportunities, following on recent years’ research in 2016. Even though they remain loyal to brands, price could be causing consumers to move to a cheaper brand or even wait for specials at their preferred brand. 

A lot has been said about consumer behaviour change during COVID-19 and beyond, of which some are predicted to have a lasting impact. 

One example of this is that of the 79% of South Africans who tried new shopping behaviours, most intend to continue usage beyond the pandemic.

A research study done by McKinsey South Africa in November 2020, identified the following five major shifts in consumer behaviour:

  1. Shift to value and essentials: 45% of consumers intend to decrease spend across most discretionary categories
  2. Flight to digital and omnichannel: 90% growth intent in online buying across most categories even post covid-19
  3. Shock to loyalty: 79% of consumers changed stores, brands or the way they shop
  4. Homebody economy: 60% of consumers are not yet resuming ‘normal’ out-of-home activities
  5. New holiday outlook: 88% intend to maintain or reduce their holiday shopping spending

The study also revealed that South Africans are aggressively adopting the following saving habits:

  1. 61% are looking for ways to save money when shopping
  2. 57% are more mindful of where they spend their money
  3. 54% are changing to less expensive products to save money
  4. 40% are planning their spending and are making shopping lists
  5. 33% are researching brand and product choices before buying

This begs the question: How have consumers’ perceptions of “value for money” changed since 2016 to the greatest pandemic of our century? 

This article doesn’t necessarily deal with the details around what consumers value but rather outlining the importance of adopting solid customer experience practices to help weather the storm.

Many financial analysts and strategists predicted that customer experience will outweigh product and price in 2020, anticipating that customer experience will become a commodity in its own right rather than being seen as merely customer service. 

Many companies adopted customer experience as the silver bullet as a result of the hyped-up publicity.

One article even stated that “those who adopt CX will establish a competitive advantage”. It goes on to state that “customers stay loyal with companies due to the experience they receive”. 

Many would have seen the statistics below:

Customer Experience to Overtake Product & Price in 2020

Source: Walker - Customer 2020, A Progress Report 

Clearly the pandemic has created a spanner in the works because consumers are now more than ever concerned with price (i.e., savings), mindful shopping and safety. 

In this context mindful shopping refers to purposeful shopping or being deliberate about the things we buy. 

What does this mean for organisations that previously set themselves up to primarily compete on differentiated customer experience?

Furthermore, what does this mean for customer experience professionals, who are mainly responsible for managing and improving customer experiences within organisations?

Customer Experience Management is the process of engineering value and balancing what customers deem valuable with what business deems as valuable. It’s the art of balancing customer expectations with business profitability. 

When organisations fail to engineer customer value, customers feel devalued and become disloyal.

This means that brands urgently and honestly need to re-connect with their customers, ensuring they become partners in the value creation process. Companies should leverage this opportunity created by the pandemic, to create a cohesive end-to-end customer experience considering what customers value most i.e. saving, mindful shopping and safety and re-design the experience with this in mind. 

This will put more stress on customer experience professionals to design sustainable, cost effective customer experiences that don’t compromise on quality and are centered around truly understanding changing consumer behaviour.

Adopting a best practice customer experience framework will ensure organisations cover all aspects of the customer experience landscape, not missing any critical elements. Such frameworks will help organisations create sustainable, positive and memorable customer experiences, resulting in life-time customers who enjoy spending time and money with the brand.

A robust customer experience management framework must include the following pivotal elements:

  • Customer Experience Vision. A successful customer experience vision starts with an aspiration centred around what matters to customers and empowering frontline workers to deliver. – McKinsey
  • Customer Experience Blueprint. You can think of a Customer Experience Blueprint as an “operational tool”. It helps you describe the nature and the characteristics of the future state customer experience in enough detail to verify, implement, and maintain it. - John Gusiff, 2015
  • Business Enablement. Done right, business enablement should be a cross-functional operation. Though sourcing and assessing feedback from many teams may sound like a logistical nightmare, its actually insuring you against late-stage disappointment. -Highspot Team, 2020
  • Monitor. Monitoring allows programmes to implement remedial measures to get programmes back on track and remain accountable to the expected results the programme is aiming to achieve. - UNWOMAN, 2010
  • Customer-Obsessed Culture. Building a Customer-Obsessed Culture doesn’t happen by accident. It happens by design. – Clare Muscutt
  • CX Governance. Simply put, CX governance is “the organizing framework for establishing strategy, objectives and policies for the corporate CX program.” – Lisa Loftis, 2020

Implementing such framework will:

  • Enable you to really reimagine, redefine, outline, demonstrate and implement the memorable experience you want to offer your customers based on solid customer insights i.e., the positive memories you create with your customer resulting in life-time customers who enjoy spending time with your brand
  • Enable you to evaluate and account for customer experience improvements implemented to date while ensuring you have the necessary governance and leadership styles embedded in the organisation, empowering you to sustain and drive your customer-obsessed vision.

In summary: it’s clear that customers’ expectations have evolved and will continue to evolve, and therefore so do the experiences we provide. Customer Experience Management practices will help you identify and fill the gap between customer’s ever-changing expectations and the experience you deliver as a brand.

MORE ON MICHELLE:

Michelle is a hybrid design & business strategist that solve business and organisation problems by applying various business design methodologies and design mindsets. She is a passionate individual who enjoys helping courageous individuals to confidently inspire, initiate and implement meaningful change. As a business professional, she excels at helping businesses to drive real business change based on customer insights resulting in financial success.

Sources:

“South Africa’s cautious consumer”, July 2016 (http://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/south-africas-cautious-consumer)

“Customer Experience to Overtake Product & Price in 2020”

(https://shipearly.com/customer-experience-to-overtake-product-price-in-2020/)

“Customer 2020: A Progress Report”, Walker