There is a retail evolution where mass market, ‘one size fits all’ strategies no longer cut it and bigger retail stores are not perceived as better by local consumers.

Nielsen MD Retailer Vertical Africa-Middle East Craig Henry comments, “As lifestyle and consumption habits change, we’re seeing a structural shift with small formats showing big growth.

This stems from the fact that where the small store has reinvented itself, the Hypermarket has remained more or less the same over the last three decades. As a result, small stores are able to meet the current consumer need for a higher level of specialisation and service delivery since an artisanal feel, personal service and individualism are synonymous with this store format.”


Over the past 10 to 15 years the modern retail store model has evolved. Supply chain process improvements have made it possible to achieve similar or even higher levels of profitability with smaller stores, paving the way for smaller retail outlets to expand and take share from larger competitors in many markets.

Not surprisingly, discretionary categories, such as convenience foods, snacks and alcoholic beverages, are more sensitive to price increases than staple products such as dairy, fresh foods and personal care products.

For the most part, however, consumers aren’t cutting out categories altogether. Rather, they’re simply buying less and it is clear that consumers do not want to compromise on quality, with only 5% of South African respondents saying they would sacrifice quality to keep the same price.

Need to adapt

For many, grocery shopping is something they try to spend as little time as possible doing. Perhaps the biggest pain point for South African consumers is that 47% think retailers don’t understand or deliver on their needs.

Less than half of South African respondents (47%) believe their main grocery retailer always or mostly communicates with them in a relevant way and provide offers they like and value (56%).

The way for retailers to stay relevant and connected to ever-changing consumer demand is to continually listen, learn and adapt to provide the products and services that will keep consumers satisfied and coming back time after time.

Future strategies

Those retailers wanting to adapt to shifting demographics can start by looking at the demographic and socio-economic trends affecting the retail landscape.

By 2050, urbanisation, which typically drives consumption, will see two thirds of the world’s population living in urban areas, from just 54% in 2014. This will have major implications for retailers in the future with regard to store location, store footprint and omni-channel strategies.

They can start by assessing how well they’re doing now. What their consumers think about their shopping experience, and how well do they think their needs are currently being met. Big data has the power to help retailers solve their biggest business problems and identify promising opportunities.

Craig Henry | MD Retailer Vertical Africa-Middle East, Nielsen | | |


Please enter your comment!
Please enter your name here