2020 has been a challenging year both financially and emotionally for consumers globally and in Africa. The pandemic has significantly disrupted consumer behaviour and shopping habits. It is not surprising that the year has been challenging for brands as well. As we are approaching December, brands are anxious to know how consumers will celebrate the holidays. Will consumers spend? where/when will they spend? is online shopping rising?
According to a recent poll by Kasi Insight conducted Nov 13-17 in Kenya, Ghana, Nigeria, South Africa and Tanzania, 97% of the respondents are planning to shop during the upcoming holiday. This finding is welcomed news for brands and marketers. On the other side, close to 50% of respondents say that their financial situation is moderately stable compared to 7% in very stable financial conditions ahead of the holidays.
Don’t bet on shopping online alone, in-store shopping is still at play
While online shopping has taken over in the mature markets such as Europe and North America, consumers in Africa are still shopping in-store but more are going online. The survey of 1303 consumers from Kenya, Nigeria, Ghana, South Africa and Tanzania shows that 51% of consumers cite in-store shopping while 41% cite some form of online shopping. Interesting, online shopping seems to be more popular in Nigeria and less popular in South Africa.
Shops such as Pick n Pay in South Africa have grabbed the opportunity. On Friday, November 13, South Africa’s biggest retailer launched an early online exclusive deal through its online shop. John Bradshaw, retail executive: marketing at Pick n Pay, said over the past seven months, the retailer’s online reported a 200% increase in active customers.
Bradshaw said they are anticipating greater demand this Black Friday as more customers have turned to online shopping during the lockdown.
Last year the retailer sold enough chicken to fill two Airbus A380s on Black Friday and they expect 2020 to be bigger due to the number of people using its digital platforms.
Apart from its online shop, Pick n Pay’s also said, it will for the first time open Click n Clock at all its hypermarkets in South Africa for customers to shop for big deals, such as televisions and appliances.
Celebrating the 2020 holidays on a shoestring budget = Coviday
Economists say widespread economic uncertainty has characterized most of 2020, a situation that has impacted traditional habits like holiday spending.
According to Adriaan Minnaar a Johannesburg independent economist and consultant traditionally, the holiday season is characterized by big sales, big crowds, and big profits.
“The festive season is the time when most retail stores experience strong sales. Projections are that this year’s spending will be less overall due to the economic uncertainty brought about by COVID-19 pandemic, Minnaar said.
Data from Kasi poll supports his assessment, in fact, the survey revealed that 87% of consumers will spend a different amount this year compared to last and only 4% of respondents said they planned on spending more than $450 this festive season.
The survey was conducted in Ghana, Kenya, Nigeria, South Africa and Tanzania. 67% of those polled were males and 32% females.
Consumers are spending on essentials this year and prefer cash as a gift
COVID-19 pandemic has been a bad omen for the holiday season shopping binge in Africa. It is impacting every part of consumers’ lives, from the places they can go on the way they spend their time and spend their money.
According to Kasi Insight data, consumers plan to spend less on gifts and expect to receive cash and food. After nearly ten months of pandemic fatigue, Africa recently marked a new grim milestone in the COVID-19 pandemic. Nearly 50,000 are dead. The number of cases stands above 2 million, recoveries over 1.74 million, according to Africa Centres for Disease Control and Prevention. Two vaccines announced recently offer hope, but the consumer dark cloud still remains.
When it comes to items they will buy for the holiday, the majority of respondents is leaning towards essentials such as food (60%), drinks (48%). The survey also showed a shift in the types of gifts people will be expecting to receive and purchasing this year.
Despite the harsh economic conditions, 10% of shoppers said they are going to spend more, 37% saying they will spend less. Millennials are the biggest spenders, at 62%, 20% Gen X, 9% Baby Boomers and 8% Gen Z.
The survey showed that the majority, 65%, still plan to do most of their Christmas shopping in December. 14% said they are planning to shop during the week of Christmas,16% did in November and 2% in October.
