Johannesburg, 20 Sep 2022
Digital transformation has been identified as a key driver for optimisation in the South African fast moving consumer goods (FMCG) space, particularly in the main market. Bringing a consumer-like, app-driven e-commerce experience to this market is an area that has received a lot of attention and investment, and several apps have been rolled out, with varying degrees of success. Many different metrics are used to judge levels of this success, but ultimately, the only thing that matters is repeated use. The aim of these apps is to replace the current manual, human-driven processes that dominate the supply chain, which means that retailers and spaza owners need to see the value in using them so they will continue to make use of these channels and replace old habits with new, more streamlined digital ones.
But are people using it?
One of the typical success measures for any app is how many downloads it has. However, if people download it but are not actually using it regularly in place of other traditional channels (in other words, using the app to generate orders in the same or similar volumes to previous channels), then it is not making any real difference. Successfully implementing digital channels through FMCG and the main market means users are creating new habits and eventually replacing the old ones. This in turn means they need to be realising value from the new channels, otherwise there will be no incentive to change.
Whether that value comes from ease of use, greater efficiency, guaranteed delivery of orders and improved stock management or incentive through reward, it is critical. Therefore, the only metric that is meaningful to measure is repeated use. This metric needs to be monitored, measured and constantly revisited, because it is all too easy for people to slip back into old habits and we need to be able to react quickly to reinforce new behaviours and stop this from happening.
Simple in theory, challenging in practice
The metrics are simple, but putting this theory into practice can be challenging. Especially in the South African market, there are so many different suppliers and channels and options available to buy from. This means it is all too easy to switch to a competitor if suppliers make life too difficult by trying to enforce the use of digital channels.
We need to build and maintain trust, in communication, in delivery, in the new technology at the foundation of the change, which means that what we are promising and what we are delivering must be aligned. This trust needs bolstering up through the value that the app delivers, to drive consistent usage and engagement with technology channels.
One size does not fit all
Trust and value are the key, but these are not necessarily quantifiable metrics and they can be interpreted differently at various levels. For example, if you have a target customer who uses your app, but also sometimes orders directly from wholesalers and distributors, then there is a mismatch in the value they see from your digital channel. This value needs to be reinforced, whether it is through cheaper products, more streamlined use, more efficient delivery or any other incentive – there needs to be a perception of value to create stickiness within your customer base.
Communication remains key throughout the process, because technology does not replace the need for strong relationships – in fact, once behaviour has shifted, this relationship and the perceived customer value it drives become even more important. Value on both sides needs to be consistently and continually driven so utilisation is maintained, and new habits are reinforced. Perceived customer value is therefore ultimately the only metric that really matters when measuring the success of digital channels in the FMCG space.