What's driving online shopping among SA's low-income consumers?
First, these consumers were assumed to have limited access to resources; and second, retailers also assumed that delivering items to low-income consumers was difficult, given where they lived.
Historically, low-income consumers were content to purchase their products in a physical (‘brick-and-mortar’) store. However, as they became more accustomed to using the internet, their expectations changed (Gao and Su, 2017). During the Covid-19 pandemic, consumers had restricted access to traditional brick-and-mortar stores (Kibucha, 2021) and online shopping increased. The low-income segment is now growing rapidly and has become an important market for retailers to understand better.
A recent research report by the W&R Seta Leadership Chair: Gauteng revealed several important insights into low-income consumers’ online shopping behaviour and needs, which are highlighted below.
Travel costs are a major consideration for low-income consumers. These customers often have to travel long distances in order to purchase the items they want/need and, as they typically don’t have their own transport, they sometimes use Ubers to take them home when they have made a substantial purchase.
Travel costs can also be a major frustration, such as when these consumers travel to a retailer, only to discover that the retailer does not have sufficient available stock.
As the cost of transportation increases further, online shopping is regarded as an appropriate alternative to visiting physical stores; and so, this is a driving factor to engage in online shopping. According to the research, quite a few participants specifically stated that online shopping was more cost-effective in respect of travel (referring to taking an Uber vs paying for delivery).
Convenience drives online shopping
Consumers often prefer online shopping because of the convenience associated with it, but convenience is especially highly valued among low-income consumers.
They have limited time, they are sometimes unable to go to the stores, they work long hours, the travel time to stores is often long (because the stores are far away), they want to avoid queues and overcrowded areas, they don’t want to go to a mall, they might have a baby, or weather conditions might not be ideal. These are some of the factors that make online shopping an attractive option. A focus on communicating the convenience of online shopping can therefore be an efficient way to motivate more online shopping among this segment.
These consumers still prefer to buy certain product types in-store. These include perishable items such food that doesn’t stay fresh for very long (veggies, fruits, meats), cosmetics, and over-the-counter medication.
Courtesy of Bizcommunity – read full article here.