Research confirms: mobile revolutionising local retail

Local report delivers insight into influence of mobile and social media on consumer behaviour

Nearly every South African – 99% to be exact – now has a mobile phone, making it the most pervasive platform for marketing and communication currently available, and one with the deepest reach.

While only 52% of South Africans have Internet access, this penetration rate is rapidly approaching a tipping point, driven predominantly by mobile. In fact, it’s estimated that by 2019 networked mobile device penetration would have increased from 112.2 million to 189.8 million, with smartphones comprising 30% of all devices in use, predominantly among the upper economically active segments of the market.

This would boost mobile connectivity to 89% of the population which, unsurprisingly, is predicted to boost media ad spend on digital platforms from 15.7% in 2017 to 23% by 2020. Of this, 43% of total digital ad spend will be allocated to mobile, compared to just 23% in 2017.

Faced with the facts, there can be little doubt that marketing’s mobile revolution has begun. However, to better understand this paradigm shift and inform marketing strategies in a locally relevant context, social media ad tech company Popimedia commissioned a third party research agency to conduct the Digital Influence in South Africa study, and combined those findings with other publicly-available research.

The result is a unique market report that tracks consumer behaviour and the role that mobile and digital has on the retail journey, rather than merely quantifying usage trends. “What the research findings reveal is profound in terms of understanding the prevailing retail sales lifecycle and the role of mobile and digital media in the consumer purchase decision-making process and its influence on buying behaviour,” explains Gil Sperling, co-founder and CTO at Popimedia.

Findings like 77% of mobile users check their phones when they wake up, which means that the majority of South Africans are active on their mobile device first thing in the morning, before they get to work, university or school, suggests that the adoption of a mobile-first marketing strategy is already a valid consideration.

Blending media

“However, brands looking to adopt a mobile-only approach may be short-changing their marketing efforts,” says Sperling. “While most people have a screen on them at all times and, unlike TV, can control what they want to watch, findings from the Digital Influence study indicate that a combined approach that blends traditional media with mobile and digital media is the most effective.”

For example, survey respondents viewed products across multiple mediums before eventually buying (within six months). The majority (59%) were exposed to the product via a website, with TV the second most prolific medium for influencing purchase decisions (40%). Facebook (31%) dominated social media platforms, with 9% of purchases influenced by engagement on Instagram.

“Interestingly, Facebook and Instagram influenced fashion and tech product purchases most and  overwhelmingly so, with TV and websites more central in home décor, automotive and appliance purchases,” continues Sperling.

“More importantly, though, these trends are indicative of what is potentially the most prolific retail trend at present, whereby consumers are increasingly blending their ‘online’ and ‘offline’ shopping experiences,” he adds.

Shoppers now want to shop in a “no-line” world that delivers a seamless customer experience between the online and physical retail environments, says Sperling. “While purchases are still predominantly made in brick-and-mortar shops in South Africa, consumers (76%) are increasingly relying on information from online sources, predominantly via their mobile devices, to make a purchase decision, even while in store.”

For instance, while 85% of consumers compare prices online and 78% read online product reviews before going to a store to make a purchase, according to the research 93% of respondents use mobile to research and make purchases mostly in store, while 47% of customers check the price of products online while in store before purchasing. In addition, 37% of respondents used their mobile device to check for a discount code or coupon in store.

And the online world’s reach into the physical retail environment extends even further, with 51% of consumers viewing social media while standing in a queue in store, according to  Facebook’s Q1 Market Snapshot of South Africa 2017. “Of relevance in this regard is the fact that 94% of monthly active users now access Facebook via their mobile device. With 16 million local active Facebook accounts, this means that 50% of South Africa’s online users are on the social media platform,” adds Sperling.

Interestingly, despite the growing reliance on mobile while in store, adoption of in-store mobile payments seems to be lagging in the Generation Y, or Millennial (25-35 years) consumer cohort, with the largest use of this payment medium among the digital natives of Generation Z (18-25 years), according to the research.

The nuances of engagement

“However, it’s no longer sufficient to know where consumers are hanging out online in an attempt to engage with them. For social media marketing to be effective it has become more nuanced, which is something that marketing and sales strategies need to consider when trying to build business on social media,” explains Sperling.

To better illustrate this trend, Mary Meeker’s Internet Trends 2017 report states that 26% of Facebook users who click on ads make a purchase, but the Digital Influence third party research suggests consumers, particularly those among Generation Y and Generation Z, are hyper-sensitive to the manner in which they’re targeted.

For example, when a sample of over 1,200 Johannesburg-based mobile users under the age of 55 were polled about how they feel about brands engaging them via social media, 41% of respondents didn’t like it. Among these, respondents commented that they “don’t like that some adverts come up that don’t interest (them)”, with others suggesting they feel “invaded” and that they “hate algorithms predicting what (they) want”.

However, the majority (47%) said they liked being contacted by brands via social media. They specifically liked “getting information more easily”, and the “easy access to products” it provided, and that they were able to get immediate responses and resolutions to complaints via social media. They also felt that social media marketing better relates to them as an individual through targeting, and while this personalisation can sometimes seem “a bit scary”, they understand that it’s just algorithms. However, there is a distinct sense that “some brands do it so well, some spam”.

Reliance on Facebook

Of these, 65% of respondents said they relied on Facebook the most for their information, with 82% predominantly using social media to connect with friends and family. However, 65% of those polled admit to already shopping online, with 40% using their mobile to do so, and 76% suggesting that ‘the mobile revolution’ is having a positive influence on retail.

These findings echo those of Meeker’s research, which show that 60% of people say that “easier access to online support channels” and “faster agent response times” (53%) would improve customer service.

“The implications of these findings suggest that marketers must start to look beyond providing a good online and/or offline experience, focusing rather on providing an excellent customer experience at every point during a consumer’s retail journey,” continues Sperling.

“Furthermore, these findings also suggest that it’s not necessarily a competition between the medium used to communicate the marketing message, but also the product itself, which has varying levels of ‘buying-power’ or ‘sell-ability’ across different channels.”

Based on the findings of the Popimedia Digital Influence in SA report, Sperling concludes by saying that effective marketing in the no-line retail environment starts with a holistic digital strategy which includes effective mobile and social media engagement that targets consumers at the right time and place with a relevant, impactful message, and compliments traditional media platforms that remain relevant in the current market context, especially TV.