1. Shopper Profile Report
Publication date: July 2018
Next publication: August 2019
Shopper Profile Report
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2. Hardware Wholesale / Retail
Shopper Profile
Marketing
The EST Africa Group targets low to middle income customers in LSM 1-6
Demographic profiles are dependent on geographic area / store location and store type
As store profiles vary, supplier understanding of the specific needs of shoppers at a regional and store level is key
Growing proportion of foreign national trade customers – impacts the manner in which members trade and promote
Stokvels are an important component of the EST member customer base
Shopper Profile by Trading Format
Wholesale / Hybrid
Supermarket Retail
Distributors
Hardware Wholesale / Retail
Primarily wholesale (bulk) customers falling into LSM 1-6 (80%)
Balance:
LSM 7-8 (14%)
LSM 9-10 (6%)
Consumers
LSM 2-6
Some trader (bulk) sales do occur
Wholesale (bulk) customers
LSM 1-6
Wholesale / hybrid hardware customers
LSM 1-10
LSM 2-6 Consumers:
Highly price sensitive & brand loyal, but are open to trial of a new offering should the perceived value/price be favourable
Offers both well-known & challenger brands an opportunity to flourish
LSM 1-6 Traders:
Purchase in bulk & are largely price driven
A number of EST stores obtain their business almost exclusively from owners of smaller trader stores
Strong relationships, high levels of service and competitive pricing are the cornerstones of the EST member/trader partnership
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3. Shopper Profile Wholesale / Hybrid Supermarket Retail
Stores target independent traders, hawkers and consumers
Customers also include government feeding schemes, schools, catering establishments, small businesses within the tourism, catering, shebeen and haircare sectors, and hawkers
Some degree of hybrid trading does occur, servicing the individual consumer
Member stores positioned in township/rural areas surrounding small-medium towns
Located primarily on arterial roads with a bus and/or taxi rank close by
Racial profile dependent on geographic area/location
Increasing number of foreign national customers (more specifically of Chinese, Somali or Ethiopian extraction) - in some areas as much as 90% and on the rise - impacts the way in which members trade and promote
Stores target low to middle income consumers in LSM’s 2 through 6, living in predominantly township and peri-urban areas
Some bulk/trader sales do occur
Member stores are positioned in township areas and on arterial roads which have bus and/or taxi ranks close by and thus often service the commuter and/or convenience market
Demographic shopper profiles differ by catchment area
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4. Independent Hardware Wholesale / Retail
Shopper Profile
Distributors
Independent Hardware Wholesale / Retail
Wholesale (bulk) customers
LSM 1-6
Independent traders, general dealers, government feeding schemes, schools, catering establishments, informal traders and hawkers, inter alia
Wholesale hardware customers
Homeowners, as well as small, medium and large building organisations
LSM 1-10
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5. Shopper Profile The growing immigrant trader population
The growth of the immigrant trader population operating in the South African independent retail channel is one of the most impactful trends in the wholesale and retail channel today
Wholesaler Challenges
This immigrant group is currently sustaining the sector in the face of a declining local (South African) trader population
Exhibit low levels of customer loyalty – relationship with wholesaler based solely on a price negotiation
National competitor store leaflets used as leverage in price negotiations
Wholesaler distribution capacity is a key differentiator
Creates an increasingly pressurised trading environment through a lack of willingness to accept what is on offer
Downward margin pressures on wholesaler in order to remain competitive
Foreign languages a barrier to communication with wholesaler – brand images on leaflet become key
Exhibit a strong element of co-operation along ethnic or religious (often Muslim) lines combined with the growth in collective buying behavior – already reports across SA of Somalian and Chinese buying groups & wholesale operations in place and functioning effectively
Supplier Opportunities
Increasing importance of broadsheet communication
Tone of communication becomes vital as well as the use of relevant visual imagery
Implement demographic customer targeting (in terms of product offering and communication) both through wholesale as intermediary and direct to foreign trader
Implement demographically targeted recruitment for sales personnel
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6. Kate Shirley | Retail Analyst New Channels
Disclaimer
These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects.
Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein.
TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein.
TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy.
* TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence
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Kate Shirley | Retail Analyst New Channels
Maryla Masojada | Lead Analyst
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