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Press release
-INDUSTRIES|Retail|South Africa|English

The winning brands in 2018 will get their competitive edge from memorable customer experiences


Consumers around the world are putting more value on experiences than they do on possessions, and South Africans are no different. Online shopping, commoditisation of once-expensive goods like smartphones, and a craving for simplicity among consumers are all factors that are helping to drive this trend. People increasingly agree that the thrill of a purchase fades quickly, but the memory of a great experience lasts a lifetime.

GfK South Africa data reveals that 50% of South African consumers agree that experiences are more important than possessions, a number that will surely rise in the years to come.

Rather than wanting to spend money on expensive possessions, we are seeing consumers gravitate towards low-cost experiences such as visiting the beach, listening to music, playing videogames, going to church or watching televised soccer with friends. Manufacturers and retailers that want to remain relevant need to think about how they will weave their brands into consumers' day-to-day lives.

Online shopping sets the trend

Online shopping is on the rise. Though we are a long way from the maturity of the US and Europe when it comes to ecommerce, it is a trend that will accelerate the trend of valuing experiences over possessions. When customers can flick from site to site looking for the best deal on a TV or a dress, they will spend less time shopping in physical stores.

Our data shows that people who shop in brick-and-mortar stores, do so because they can physically see the product before they buy, they shop there routinely and they get instant gratification by getting the products much sooner. When they shop online, however, it is for saving money, better selection and the overall ease of shopping.

However, consumers can still get excited going to the shops for an out-of-the-ordinary experience-just think about how South African queued to design their own ice-creams at the Magnum pop-up store in Rosebank, Johannesburg last year. Thus, we can expect to see brands thinking about how they can combine digital and physical channels to deliver the best customer experience and get a competitive advantage.

Experiential destinations

Mall operators are including more experiential elements in their design, putting entertainment-based locations like movie theatres and gyms at their heart. And physical shops are transforming from transactional shopfronts into immersive showrooms and leisure destinations. The point is no longer to close a sale, but to build a brand relationship.

The objective is happy, satisfied shoppers that keep coming back. When they are ready to purchase, they will do so at the places that offer them more than a place to pay. For example, Virgin Holidays has said: "We like to do things differently. While most stores are designed to sell, sell, sell, that isn't the top of our agenda. We want to provide a retail space that is designed to inspire consumers through immersive experiences."

Brands like global furniture retailer, IKEA, pioneered this approach with elaborate showrooms offering restaurants, childcare and more. Swedish retailer Lakritsroten, which specialises in liquorice and confectionary ingredients, integrates online sales with in-store tasting and cooking events.

On the flipside, we are seeing digital brands also think about how they can engage with customers beyond competing on price and selection.

VR/AR blurs the lines

For some, it's all about using cutting-edge technology like artificial intelligence or virtual reality (AR/VR) to deliver cool experiences and high degrees of personalisation. Online retailers have their own advantages, one of which is data for personalisation of customer experiences. Some 58% of South African consumers in our FutureBuy Research agreed that they like it when a website keeps track of their visits and recommends relevant things to them.

Technologies such AR/VR will find a role in digital and physical stores alike. Some 59% of respondents to GfK South Africa research say they are more likely to visit a retail store that offered some sort of VR/AR experience. International brands like Lowe's use VR to help customers visualise what decorating a room in their house might look like.

As VR headsets become more affordable, they'll most likely play a larger role in e-commerce, too. Consumers could walk around a virtual showroom to look at a car's colours and interiors, for example. In future, the lines between virtual and physical experiences will all but disappear.

Digital stores on the high street

Just as we have seen physical stores move online, we're seeing online shops like Yuppiechef and the UK's Hotel Chocolate set up showrooms or high-street branches. Physical shops worldwide, meanwhile, allow shoppers to order online and collect in-store, or vice-versa. They're also looking at how to use digital data to deliver personalisation-for example, using facial recognition to offer personalised service based on their relationship with the customer.

To earn loyalty, retailers and brands need to delight shoppers, not just persuade them to buy. A better environment and experience will keep shoppers coming back. They need to offer an environment, whether that's online or offline, that inspires and a personal service that delights. Those that deliver relevant and exciting experience benefits can break through the clutter and win customers for life.

Contact us:
Rachel Thompson  
Rachel Thompson
South Africa   
+27 (0) 31 561 3446