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  • Sluggish economy dampens demand for Small Domestic Appliances in South Africa
    • 08/01/17
    • South Africa
    • English

    Sluggish economy dampens demand for Small Domestic Appliances in South Africa

    · Value of market falls 17% to R3 billion in 2016 · Low-cost local brands to grow at expense of premium multinational brands

     

     

  • Turning browsers into buyers
    • 07/06/17
    • Fashion and Lifestyle
    • Technology
    • Consumer Goods
    • FMCG
    • South Africa
    • English

    Turning browsers into buyers

    Our clients tell us that the biggest challenge facing them in fashion and non-food retailing today is conversion. Do you understand your shoppers' path to purchase?

    • 07/05/17
    • Retail
    • Consumer Goods
    • Connected Consumer
    • South Africa
    • English

    Conquering the Connected Shopper and their multiple paths to purchase

    Conquering today’s connected shopper is a battle. Consumers’ expectations of convenience, choice, price and experience are continually escalating.

    Whatever you make or sell, the true power rests in the palm of shoppers’ hands. The “always-on” culture of connectivity puts both manufacturers and retailers under intense pressure to stay relevant and create “fans for life”. This is a cut-throat, slim profit environment that is further endangered by emerging hyper-competition from global marketplaces. Conversion is more key than ever.

    No retailer or manufacturer has a free pass to success. No existing business models are guaranteed. For instance, in the recent past, the generalists and the manufacturers that supplied them were all-powerful. Today, specialists and global market places like Amazon are squeezing the generalist model. Clearly, whatever the sector, whatever the scale or geography, all players must constantly re-evaluate their strategies and tactics to ensure they win the connected shopper’s business. It is essential to constantly be on top of your shopper by focusing on the right touchpoints at the right moment throughout the whole omnichannel path to purchase.

    So, if you’re serious about conquering the connected shopper, you must understand today’s retail environment and anticipate tomorrow’s trends to plan and prepare for the future.

    The connected retail transformation: Two very different routes to purchase

    Retail is transforming to keep pace with the connected shopper and their demands. We believe that in the future, shopping will either be functional, rational and efficient, or it will need to offer an emotional connection or be an experience.

    Our two future scenarios for retail in the connected world are rooted in our extensive knowledge gained from researching consumers. What is common to them all is that the shopper is front and center, and has more control than ever before of how they shop and what they buy.

    One: Staying in

    Here the smart home of the future takes over the functional aspects of shopping, ordering and replenishing supplies as they run out.

    Never fear, this won’t disengage shoppers from brands, as virtual and augmented reality will come to the rescue. For fun, connected shoppers will be able to try on clothes, trial appliances and test drive cars – all from the comfort of their home.

    Two: Going out

    If you leave the comfort of your home to shop, there will be two very different options. On the one hand, much shopping will become uber-convenient, super-fast and easy with in-store GPS navigation, pick up points, automated payments (no queues) and minimal browsing. Mobile phones will have a key role to play, becoming hand-held shopping trip assistants. On the other, retailers will offer experiences, where shopping will be seamlessly integrated into socializing and entertainment. The smartphone will be the connector of the personalized digital and physical retail world, for chatting, browsing, sharing experiences and paying.

    Whether shopping from the home or when out and about, manufacturers will increasingly focus on their own omnichannel retail concepts. They will want to get closer to their shoppers and find personalization-driven business models where this can deliver a profit.

    Getting up close and personal with the connected shopper

    There is no one “connected shopper”, every consumer and every purchase is unique. For a 360° perspective, you need to evaluate the key target audience segments in detail. How do they behave, what are their need states, how can you meet their expectations? From Gen X, Y and Z to iBrains, Millennials and Baby Boomers, we’ll help you identify and reach your audience with the relevant product, service and experience at the right point in their purchase journey. With more consumers than ever saying they feel overwhelmed by choice, understanding and helping shoppers find the products they really want will become a core tenet of the successful retailer. Relevance and persuasion will become more important as key success factors. As a result, many retail marketing budgets are shifting to content and attribution marketing to be closer to the shopper during the moments that matter. The focus will be less on where the purchase happens, and much more on how you can influence it.

    Having an in-depth customer understanding is essential if you are to offer shoppers the all-important personalized product or service, such as H&M’s customized dress designed with Google. And it’s most definitely key if you want to anticipate their needs to increase their basket size and grow loyalty.

    Reinventing business models

    Achieving a profit requires a laser-like focus on logistics and operations, constant innovation, relevant marketing, perfect customer service, excellent customer and market intelligence… the list is infinite. By focusing on the connected shopper and building a true picture of buyers of all sorts of products and services, you can identify the business models that give you the best chance of success in the retail transformation.

    Marco Wolters is Global Industry Lead Fashion, Home & Lifestyle at GfK. He can be reached at Marco.Wolters@gfk.com.

     

     

     

     

     

     

     

     

     

     

     

     

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  • Unpacking South African Millennials
    • 06/06/17
    • Fashion and Lifestyle
    • Home Appliances
    • Financial Services
    • Media and Entertainment
    • Technology
    • Travel and Hospitality
    • Automotive
    • Consumer Goods
    • FMCG
    • Home and Living
    • South Africa
    • English

    Unpacking South African Millennials

    Marketers are familiar with the global definition of Millennials but few understand these consumers in the South African context. GfK gives you a lens into the South African's millennial.

  • Five Tech Trends you can’t afford to ignore in 2017
    • 03/01/17
    • Connected Consumer
    • Tech Trends
    • South Africa
    • English

    Five Tech Trends you can’t afford to ignore in 2017

    The pace of change driven by new technologies never slows. For our latest thinking on how five key trends will impact Connected Consumers now and next, explore our full Tech Trends 2017 report

    • 02/22/17
    • South Africa
    • English

    Nations as brands: Why global perception matters

    In today’s world, places are getting increasingly accessible, and global citizens have a vast array of choices where to do business and work, and where to spend their leisure time. Digital technologies and modern consumer goods and services are everywhere, regardless of nations’ cultures, religion, and level of development, bridging the gap in hospitality offerings and business environments across the world.

    Reputation a key differentiator for nations and cities

    As a result, competition among nations and cities for business investments and tourism revenues is heating up, and this is a trend for years to come. In this context, reputation has turned into a key differentiator for nations and cities.

    The global public admires “made-in-USA” products, American strength in science and technology, and the nation’s creative energy, yet the US struggles to win the world’s recognition for its governance, a reputation asset in which Canada and Switzerland are perceived best. Tourism attractiveness is a key differentiator for Italy and France, while Germany needs to do more to promote its natural beauty. Los Angeles, New York, and Berlin are not recognized for their welcoming people, as opposed to Sidney, Toronto, and Amsterdam.

    Current events do not define nations’ reputations in the long run, yet their short-term impact can be quite profound. For example, in 2016, a very turbulent year, USA and the UK have suffered large decreases in positive global perception. Our Nation Brand Index’s (NBI) creator Simon Anholt comments: “It is a country’s perceived impact on the world that affects its global reputation, far more than its assets or achievements – and this is what we are seeing here. Those countries that are perceived as being world influencers are suffering following a year of ongoing international conflict and humanitarian issues.”

    Leading nations held most accountable for domestic and global problems

    The souring global mood about leading nations reflects a world beset by conflicts and socio-economic uncertainties. This proves a trend we have seen in the NBI data before: that leading nations are held most accountable for domestic and global problems and they suffer reputation losses in tough years.

    But at the same time, leading nation brands are resilient as they have reputation capital to spare. At least in the past year, the leaders held their top positions despite score drops. The world still gives them credit, although with much greater skepticism.  Hence, USA managed to retain the top position in the NBI rating in 2016, followed by Germany and the UK which barely edged Canada, ranked fourth.

    Spotlight on the US

    Leading the Nation Brand Index at number one, the US scored strongly in the categories of Exports (#1 worldwide), Culture (#2), Immigration & Investment (#2), Tourism (#3), and People (#5), but struggled on the Governance metric, where the US ranks 19th – down one place from 2015. Note that the data were collected before the recent US presidential election and its contentious aftermath, the events to watch for impact on the US Governance image in 2017.

    Spotlight on a hot-button issue: Immigration

    In NBI, Investment and Immigration metrics measure the power to attract people to live, work or study in each country and how people perceive a country’s quality of life and business environment.

    Combined, these metrics put Canada in the top spot for its Investment and Immigration attractiveness, followed by the US and Germany. Canada performs strongly on all Investment and Immigration metrics, except as a desired destination for studying, on which the US is a clear leader. But the US lags in how it is perceived globally on social equality.

    Conclusion

    Brand image and reputation go a long way for consumers. To be successful in the business world, companies must create and maintain a positive image and reputation, especially during times of social conflict. The same is true for nations. Those with more favorable branding open their doors to expanded opportunities around tourism, imports and exports, and investment.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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  • Optimize your below-the-line marketing spend
    • 11/09/16
    • Promotion and Causal Retail
    • Connected Consumer
    • South Africa
    • English

    Optimize your below-the-line marketing spend

    Which of my marketing activities delivers the maximum return on investment? The solution lies in combining your point-of-sales data with competitive intelligence on your activities in-store, online or via print advertising.

    • 01/21/16
    • Media and Entertainment
    • Technology
    • Media Measurement
    • South Africa
    • English

    Is it a Netflix world after all?

    Netflix’s recent announcement of their international expansion in 2016 is not unexpected, but still somewhat breathtaking in its scope. While it may seem natural to those in the United States, where Netflix holds a dominant position in the Subscription Video on Demand (SVOD) space and in other early markets where it is a well-known brand, but this latest overseas growth is not as much “a sure thing” elsewhere.

    Eight key concerns for entering developing markets

    Certainly Netflix will enter these new markets with a well-known brand name, which may be less connected to its actual content than to the fact that US-originating digital brands often have a leg-up on local brands. Netflix will generally appeal to affluent, Western-oriented consumers outside of the North American and Western European markets.

    But Netflix will have a number of concerns when entering these other developing markets that make up much of the dozens being added. These include:

    • Local competitors in the Pay TV or streaming space may themselves have a dominant position. GfK works with a number of providers in the markets in which Netflix has newly launched to understand how their services are consumed. We often see a large cohort of subscribers actively viewing the kind of on-demand content that Netflix dominates in the US. These are consumers who are well served by streaming or on-demand content. For example, local South East Asian player iFlix has already built up an impressive half million subscribers in a short space of time.
    • The streaming rights to local content of interest may be held exclusively by other services.
    • The streaming rights to even Netflix’ own content may still be controlled by other providers, based on older agreements.
    • Netflix’ original, exclusive Western-focused content may not have an appeal in different cultures. Again, GfK’s work in providing Return Path Data (RPD) services have taught us that local content is absolutely crucial in building a strong customer base – even in markets where the kind of Western-oriented programming in which Netflix concentrates is popular. Netflix itself recognizes this by focusing much of its strategy on creating local content for its various markets.
    • There may be local laws regarding a certain level of locally originating content.
    • Internet access in certain countries may be limited across the population or intermittent.
    • The governments or entities controlling Internet access may arbitrarily cut access based on disagreement with content, or may use such power to censor or control what content is offered.
    • In many markets, particularly in APAC, advertiser-supported or illegal websites are often well established as sources for watching video content. So there may be resistance to paying for content that consumers have traditionally accessed by other ‘free’ means.

     

     

     

     

    Netflix’s big data advantage

    That being said, Netflix has consistently outperformed expectations of industry experts and those in the financial markets. Its daring moves in the past have mostly panned out. And, aside from content, it has an understanding of its consumers – through the use of its own collected big data – with which few of its potential competitors can hope to compare.

    As for its competitors, frenemies, and partners – some being all three – the growth of Netflix raises questions that only third-party accounting of Netflix can answer. This way their competition or partnership with Netflix is on a more level playing field.

    What do you think about Netflix’s expansion? Do you see other challenges? I would like to hear your opinion as well.


    For more information, please contact me at david.tice@gfk.com.

    • 01/06/16
    • Market Opportunities and Innovation
    • South Africa
    • English

    As curious as the dark side of the individual

    Segmentations can be an incredibly powerful tool for businesses, providing strong platforms for innovation and a targeted approach to customer relations. However the strength of segmentation hinges on the level of similarity between the individuals in each segment. The greater the similarity the more comprehensively the group represents its’ individuals and as such the more accurately it predicts their behavior.

    The more angles that we can describe the individual from the more points of similarity we can draw between them. Each individual angle is only part of the picture of the individual, like the sun shining on the moon.

    The majority of segmentations are based around one angle; the articulated views of an individual, what they say they do, what they think, what they want etc…

    However there are a couple of inherent problems with this, firstly articulation statements can be very hard to write, and must be carefully thought out in order to ensure they resonate and are interpreted in the same way for consumers, particularly across international borders. Take the statement “It is important to me to eat healthily”; there are a number of areas that this statement can be open to interpretation by the respondent; what is the definition of healthy? How important does it have to be?

     

    The second major issue with an articulated segmentation is that it is all based around a respondent’s view of themselves as opposed to an impartial third party view of them. A respondent may say that eating healthily is important to them however if we looked at their shopping bills we might see that they buy a below average amount of fruit and vegetables.

    By looking at consumers from the articulated angle we don’t see an accurate picture of their actions. Experiments in behavioral economics have routinely shown that the gap between our view of ourselves and the truth is wider than we think. A shining example of this is consumers’ understanding of mobile tariff usage; despite the myriad of different ways to track data usage, the vast majority overestimate how much it is that they use. For a complete picture of the individual we must take into account this discrepancy between perception and behavior. An example of this would be m-commerce; to identify the leading edge consumers you don’t want to look at those that say they are happy to make payments through their mobile you want to look at those that already do.

    But there are a number of different ways we can look at the individual from a behavioral angle;

    Consumers can report their behavior and this is often the most cost effective way of collecting behavioral data; however it needs to be done carefully to avoid the pitfalls above. Questions need clear parameters and to be strictly reporting as opposed to summarizing or predictive.

    Take activity frequency:

    1. How many times have you been swimming in the last month?

    as opposed to;

    1. On average how many times a year do you go swimming?

    or

    1. How many times will you go swimming in the next year?

     

    There are a variety of other ways to build the behavioral angle but the availability of these can vary greatly by market:

    • Data from passive monitoring of smartphones, geo-tagging and browser recording
    • Qualitative ethnography can give an independent observation of the individual
    • Customer data such as sales can be used by organizations to provide rich understanding of an individuals’ specific interaction with the brand. Particularly useful when designing a segmentation that can be integrated back into a client database

    A purely behavioral based segmentation however is also a floored concept because it does not acknowledge the importance of the idealized self. The idealized self is a product of our aspirations and these are what drive purchases. We may see ourselves as a bit of a foodie and so will be drawn to the look of the fridge advertised alongside bottles of wine and wheels of stilton. We convince ourselves that we definitely need the ambient section for storing Merlot at optimum temperature, even if our appliance rarely sees anything more adventurous than Carlsberg and Baby Bell. The aspirational self is a key part of the marketing and messaging value of segmentation. It is essential to understand the consumer not just from your own perspective but theirs’s as well.

    The most powerful segmentations therefore will have the most rounded view of the individual including;

    • Company understanding of the way in which a consumer interacts with its products
    • Consumers’ perception of how they feel and what they want
    • Consumers’ reported behaviors
    • Observation of consumer behavior

    For more information please contact Samuel Carter at samuel.carter@gfk.com.

    • 12/15/15
    • Retail
    • Consumer Goods
    • Geomarketing
    • South Africa
    • English

    Purchasing power: All-rounder among market indicators

    There’s no limit these days to the volume and type of data that companies use to improve their competitiveness. Much of this data is unique to the industry in question, but some market indicators such as purchasing power have nearly universal application. A measure of the population’s disposable income, purchasing power data is the primary benchmark for determining consumer potential. So why is this market indicator so valuable and versatile? Simply put, purchasing power shows companies and manufacturers where the population has sufficient disposable income to spend on retail purchases. And even more importantly, good purchasing power data shows how this disposable income varies throughout the entire market and at different regional levels such as municipalities and postcodes.

    Exploiting more potential through regional insights

    Let’s now look at how purchasing power data can help a consumer electronics retailer who sells products via chain stores throughout Europe. Optimally placing and managing these stores requires precise, up-to-date knowledge on how the product potential tracks across regional markets. The retailer happens to know that Europeans have roughly €9 trillion to spend in 2015, but this information alone is useless. This is where our purchasing power data comes into play. Our data offers a highly textured breakdown of the geographic distribution of this wealth. It’s not enough for our retailer to work with composite figures and rough averages, because actual purchasing power amounts fluctuate dramatically from country to country, municipality to municipality, and even postcode to postcode.

     

    So where does the retailer start? A good first step is to assess the relative wealth in the areas around the chain stores. This has a direct effect on how the retailer should optimize the product mix for each location. A quick look at the data reveals that Liechtenstein is a veritable purchasing power dynamo, with 4.5 times the average disposable income. Our retailer has two stores in this area, so a good move would be to offer a larger selection of high-end products at these locations. If the two stores are not fully tapping the available potential, the retailer can consider opening up some additional stores in this country, strategically positioning them in municipalities and postcodes with especially high purchasing power.

    Boosting turnover & market share with geomarketing

    The retailer also has stores in Central European markets, such as Poland, which has shown signs of rapid retail growth. But unfortunately the retailer’s stores in that country have not be able to capitalize on this trend. Another look at the data shows why: All of the retailer’s stores are in districts with below average purchasing power by Poland’s standards. The retailer now has several options. It can open stores in some of the districts with higher purchasing power, such as Sopot, Piaseczynski or Warsaw, the latter of which has almost 83 percent more purchasing power than the rest of the country. Alternatively, the retailer can adjust its product mix at the existing locations to better appeal to the surrounding demographic. Up until now, the retailer has been using the same or similar marketing campaigns for all of its stores. Using the purchasing power data, marketing campaigns and POS promotions can now be tailored on a store-by-store basis to the income level and purchase affinity of the nearby population.

     

    The retailer can also use the purchasing power data to more objectively measure the performance of its stores in each of its active countries and regions. Previously, the retailer had no way of gauging what a good result was for the markets where its stores are located. For example, the retailer knew its best-performing store in France was in Paris and its worst performing in Pas-de-Calais. But this knowledge was meaningless without insight into how these performances relate to the market potential in those areas. Using the purchasing power data, the retailer discovered that Paris has an average per-capita purchasing power of €29,433 (more than twice the European average), while Pas-de-Calais has just €15,688. Thanks to these precise, regionally sensitive numbers, the retailer can more accurately gauge both individual store performance and how those performances compare as a percentage of the total local market.

    About GfK Purchasing Power

    Purchasing power data is the ideal foundational market indicator for users across all industries, from retail and real estate to automotive and tourism. Users can easily supplement purchasing power with additional market indicators, such as retail turnover potential and purchasing power for specific product lines. GfK Purchasing Power Europe is calculated annually for 42 European countries and provides comprehensive coverage down to the level of municipalities and postcodes, as well as data on inhabitants and households. GfK’s Geomarketing solutions also include digital maps and other market data that fit seamlessly with the purchasing power data.

    For more information on GfK’s Geomarketing offering, visit www.gfk.com/solutions/geomarketing.

    • 10/21/15
    • Media and Entertainment
    • Media Measurement
    • South Africa
    • English

    Putting the me in tomorrow’s media experience: the future of the BBC

    Some people have argued that the BBC’s role in the British Media has considerably diminished over the past few years, but as the organization still reaches 97% of the population every week, I believe it still has an important role to play. Furthermore, with competition from OTT services continually rising, old Auntie can’t afford to stand still and must ensure she retains her share of the market, especially among younger audiences.

    Some key changes in the market. As well as an erosion of the amount of time generations are spending with TV and Radio, audiences now also want to be ‘in control’ of their content. Thinking about TV viewing specifically, viewers want to decide when they watch something, how they watch it (all episodes of a series in one sitting) and how they are going to share it with friends and family.

    If we look at how Radio 1 was consumed 10 years ago, for example, the changes compared to today are remarkable. Where once shows were only listened to at specific times of the day, users can now choose to rewind bits of the show they missed, or just listen to it all again later; they can tune in to their favorite shows on the car radio, but they can also listen online through the app or the website (on a range of devices); podcasts are created on a daily basis and thousands of views are registered every day on the station’s YouTube channel.

    Moving away from radio, the BBC has been also experimenting (successfully) with Netflix-style TV launches, making a whole series of TV shows available to its users in one go. For example, the launch of Car Share was met with millions of iPlayer requests to stream/download each episode of the series, a much higher audience volume than would have been expected had the show been released offline.

    Many of the changes I’ve mentioned were incorporated by the BBC long before the majority of their competitors, so they have had time to refine their strategies, as well as providing the organization valuable learnings to take forward. But in my opinion, the most interesting move is how the BBC are using audience data to improve their services.

    Chart Beat is a tool the BBC currently employs to analyze traffic data across all of the BBC’s websites in real time. The News and Current Affairs team monitor which stories are performing well (or not so well) on BBC News website, and how they can instantly re-arrange the webpages to increase audience engagement. The second tool that was talked about was MyBBC. This new service, using data made available by users being signed in across the BBCs platforms, will eventually provide audiences with tailored content that helps them unlock even more value from the BBC which, in the long run, will increase overall satisfaction and loyalty to the organization.

    The BBC has previously anticipated industry changes and reacted by developing the necessary infrastructure to fully serve its audience. From what we have heard they are developing, and from seeing how they have adapted their delivery and content strategies in the past, I think we can be confident that the BBC will continue to evolve and find new ways to serve its existing audience, as well as finding new, innovative ways to serve the next generations of viewers, listeners, readers and browsers.

    Niko Waesche (Global Industry Lead of Media and Entertainment @ GfK) and Nick North (Director of Audiences @ BBC) shared the presenting duties in the penultimate keynote speech of the GfK Future Consumer Summit 2015, speaking about the changes happening to the media landscape and the challenges this presents media companies of today. In the first part of the presentation, Niko focused in on the issues surrounding the industry as a whole (see part 1), while in the second half, Nick North explained the steps the BBC has taken to keep up with the ever-evolving consumer trends, and what plans the organization has to cope with changes in the future.

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