Market Research Wrap: “Convenience is the ultimate currency”
Cheryl Hunter (research at marklives.com)’s weekly wrap of the latest market and consumer research:
- Smaller, better, faster
- Global migration
- Dairy juice blends decline
SA consumers demand convenience
The latest report from global measurement company, Nielsen, which focuses on the Quest for Convenience, explores changing global consumer needs and highlights the rapidly growing demand for convenience in markets around the world — including South Africa. The South African version of the report was released this week.
Ailsa Wingfield, Nielsen executive director thought leadership global markets, spoke to Market Research Wrap about the report and its local relevance: “In today’s hyperconnected world, convenience is the ultimate currency. Manufacturer, retail, technology, media and service brands have a vital role to play in providing an overall convenience experience with easy-to-use, automated, intelligent and digitised options for every conceivable lifestyle item, incident and interaction.”
According to Wingfield, says rising internet penetration, denser urban locations, faster-paced lifestyles and challenging working hours are adding more and more layers of complexity to consumers’ lives. Consumers are feeling more stretched than ever before, and are increasingly striving for convenient solutions that help to simplify their busy lives. “Today, convenience transcends products, services and store channels. Packaging, preparation, storage, portability, disposal, ordering, replenishment and fulfilment, as well as device, payment and application technologies, are all key considerations in providing an overall convenience experience.”
Wingfield has identified six ‘factors of change’ driving SA consumers’ increasing need for convenience:
- Rapid urbanisation: People are flocking to urban areas in search of better employment prospects, infrastructure, services and a wider array of lifestyle options. By 2025, 69% of South Africans will live in cities or towns — 39m people in total, 4.7m more than today.
- Shrinking households: Average household sizes are declining as fertility rates continue to fall (3.0 people per household by 2025 in SA). With increasing population density, limited space for new housing and high property prices, many consumers are downsizing their physical living areas.
- Crowded transport: Limited land and high investment costs are major barriers for many urban areas to develop the transport infrastructure needed for their growing populations. In many cities, congestion is increasing, car ownership is declining and people are spending, on average, two hours commuting every day.
- Evolving gender roles: Nearly 52% of SA working-age females participate in the labour force. With more working women, the traditional role of women (taking care of shopping, cooking and other domestic duties) is shifting to a shared role between men and women.
- Generational needs: People are living longer than before. In SAa, 18% of the population will be aged over 50 by 2025. Shifting age demographics means technology adoption, spending ability and priorities will vary considerably between generations.
- Uptake of technology: The scope and scale of technology has exploded, driving a fundamental transformation in the way consumers include and use digitisation in their lives. SA mobile subscription is well over 100% and internet access will reach 68% by 2020 (an increase of 16 points in five years). Growing smartphone penetration and the rise of smart homes and spaces will escalate consumer capability and connectivity to services to streamline their lives.
Wingfield says that, by understanding what drives convenience across various marketplaces, FMCG companies can question assumptions, create better strategies and develop agile, forward-focused plans to satisfy consumer demand.
For more, go to Nielsen.
Migration increases prosperity for all
Migration has always existed but the global stock of migrants has grown materially since 1990 — although it still only accounts for around 3% of the global population — and in recent years has become a toxic issue in political debates. However, new research by Citi GPS and the Oxford Martin School shows migration increases prosperity for all.
The report, focused on economic migrants who’ve not been compelled to migrate either as refugees or through force, takes a detailed and balanced perspective on the impact of immigration on advanced economies. The overriding conclusion is that migration is conducive to native and aggregate prosperity, especially over longer time frames, when it’s likely to generate greater prosperity on an aggregate, per capita and per worker basis.
In most cases, migrants consume fewer benefits and receive less from the public purse in comparison to natives in similar circumstances, although the level of migrant inactivity often varies dramatically from one expatriate group to the next. In many cases, migrants return home in older age, which further improves the fiscal equation but which is often missed in economic modeling.
The ageing trend is global and will lead to a doubling in the number of people over 60 from 962m today to over 2bn in 2050. Migration will play an increasingly vital role in coping with this transition and easing the burden on care and social security systems.
Volume decline in dairy juice blends category for 2017
The above-inflation price increase may be attributed to a rise in packaging and production costs, as well as increases in fuel prices that influenced the distribution costs. It’s believed that players passed most of the growing production costs on to consumers.
Some of the manufacturers in this category changed their product formulations ahead of the implementation of sugar tax. This was with the aim of avoiding the tax load, and maintaining or gaining market share as consumers become more ingredient-conscious.
The category is expected to remain under pressure in the short term, with a limited decline in 2018; however, there’s a positive outlook for the long term and the category is forecast to grow year-on-year through to 2022.
For more, go to BMI Research.
Cheryl Hunter (@cherylhunter) has written for the South African media, marketing and advertising industries for more than 15 years. A former editor of M&M in Independent Newspapers and contributor to Bizcommunity, AdFocus, AdReview and the Ad Annual, she has also produced for various television networks and currently consults on communication strategy and media liaison. She now does the new weekly “Market Research Wrap” column for MarkLives.com.
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