Understanding the new, augmented African consumer
Many multinationals faced with declining growth in other parts of the world are looking to Africa as a new frontier. But given the size, scale and vast diversity across Africa, these big brands need to be precise about where they want to go.
Delivering a keynote at SAP’s Retail in Motion event in Cape Town this week, Ailsa Wingfield, executive director for Thought Leadership, Global Markets at Nielsen, noted international organisations need to be aware Africa is changing too.
She explained it is important for these businesses to narrow their focus in order to address opportunities, and bridge gaps, across the continent.
Just because Africa is seen as this “untapped” market doesn’t mean brands can just push any products on consumers, asserted Wingfield.
Technology is driving a change in the African retail environment because customers are now able to access more information about their options and about the products they’re looking for. This gives them the opportunity to compare prices, features and “summon” products if/when they need them.
So, what is driving buyer behaviour?
Modern consumers are experiencing an explosion of choice, said Wingfield. For retailers, this means loyalty has a limited lifespan. Around 45% of African consumers are keen to try new things and 43% want to explore and experiment with products and services they’re never used before.
“This makes it even more important to understand what consumers want and what influences them to change the products they use. If you’re a new, unknown brand, you could become the brand these consumers switch to.”
In Africa, price and value for money remain key factors influencing buyer behaviour but these are no longer the only factors. Consumers still favour offerings from brands they are familiar with, but they also increasingly want to support brands that are socially responsible, trade with transparency and offer more sustainable solutions.
Consumers back businesses with practices that align with their ideals and how they decide to live their lives, she added. And more and more, we’re seeing African consumers making their buying decisions based on convenience.
Wingfield outlined that as countries across the continent become more urbanised, the people living in these regions are experiencing a change in lifestyle. Accompanying urbanisation comes additional strain on infrastructure and services but it also opens doors for savvy retailers.
For example, the average citizen in Nigeria travels 15km to work and spends around four hours in traffic each day. Some can spend a quarter of a day in traffic, she explained. One way retailers can target these consumers is by offering them convenience and making their lives easier.
“Because they’re spending more time on the road, they have less time at home. So they need shopping experiences that simplify their lives.”
Everyone is time and attention starved, noted Wingfield. The brands that have an impact will be those that make things easier, simpler and more efficient.
Rise of the augmented customer
Customers are informed like never before. About your products. About your brand. And also about your competitors’ brands. They don’t read the information you provide. They make decisions based on reviews from others. They value experiences and how you make them feel.
Also speaking at the Retail in Motion event, Marc Nolla, VP SAP DGTAL & Leonardo CoE, noted that when people try to understand this augmented customer, they look to teenagers. “But I’ve come to understand that the best example of an augmented customer, is my wife.”
Armed with an app called Yuka – which can be used to scan food and cosmetic items and gives them a score based on the user’s personal preferences – his wife finds the foods and products that best align with how she wants to live her life.
The app may have vetoed Nolla’s favourite breakfast cereal, but he acknowledges tools like Yuka help people make better, more informed decisions.
Engaging with the augmented customer requires a little extra effort, as companies can’t just analyse social media data and think they know the customer, he asserted. “You need to look at experience data so that you can get a real gauge of how they are feeling.”
But just because companies can use intelligent, disruptive technologies to really fulfil the needs of augmented consumers doesn’t mean they should, cautioned Nolla.
“Before you spend time identifying and attempting to address the needs of this customer, you need to determine if you event want to target these consumers in the first place.
“Do these people even align with what your business does and do they align with your brand?”
For the past five years, Nielsen has run a survey among African corporates to find out what their key priorities are across the region. “What we’re seeing over time is that you can’t just bring a product to a consumer,” concluded Wingfield. “You have to bring the right product to the consumer. To do that, you need to know who the consumer is.”