Globally the balance of power shifted over time.
Brands dictated the agenda in retail with companies like Unilever and P&G limiting the quantity of high-demand products delivered to a single retail chain, insisting that the retailer carry all SKUs of a particular brand, and demand that the retailer participate in their promotions.
Then with the rise of mega-retailers like Walmart, Carrefour, and Tesco, it became about access to increasing numbers of shoppers. Now it was the turn of the retailers to wield power over suppliers in trading terms negotiations that became notorious for their stringency.
The last 12 to 15 years have seen another shift take shape – the increasing supremacy of the shopper.
Driven by the ‘digital revolution’, it is characterised by a profusion of information accessible to anyone at any time.
As a result, retailers and brands are losing control over their messaging, shifting some power away from brands and retailers, and back to the shopper.
This dynamic may impact a retailer, for example some Twitter (X) consumer campaigns against Woolworths and some of its product lines. It may also drive sales unexpectedly.
For example Checkers’ exploitation of the sudden, social media-driven demand for Prime energy drink – itself a product of YouTuber Jake Paul’s popularity.
Suppliers and retailers find themselves having to be ready for these surges in messaging and seemingly random fluctuations in demand as they happen.
Other dynamics have been at play too.
During the worst of the Covid pandemic and in the subsequent supply chain crisis, people simply shopped where basics like bread and toilet paper were available.
Price inflation and economic uncertainty later reinforced this trend, with shoppers going wherever the best prices could be found, and considerations like brand and retailer becoming less critical.
Loyalty to retailers is waning even as retailers invest more heavily in loyalty programmes.
The new Trade Intelligence Grocery Shopper report shows that while shoppers claim that belonging to a loyalty programme makes them loyal to a store, their behaviour says differently – most household shoppers belong to multiple loyalty programmes and 82% shop at three or more retailers.
Another factor in the shift of power towards shoppers is the shoppers themselves, notably Generation Z. Born from 1995 to 2010, they have come of age with the rise of smartphones and social media and are now the most influential generation of shoppers.
Gen Z makes up 19% of South African household grocery shoppers, and while they are not a homogenous group, there are some distinct differences in their shopping preferences to older generations.
Trade Intelligence’s SA Grocery Shopper Report analysed SA’s grocery shoppers using Ti’s tested and proprietary lens which we have honed over the last 20 years.
The report paints a comprehensive picture of the FMCG landscape, from the perspective of shoppers themselves.
Who are they? What resources do they have and where do they shop?
It also answers some key questions on how shoppers define ‘value’, what they are prepared to pay a premium for, and where they look for information before they shop.
Kerry Elliot, sales lead at Trade Intelligence, believes that in South Africa retailers were further empowered by the consumer boom of the early 2000s.
“To a degree, power dynamics are also dictated by the economic cycle. In the early years of the Millennium, economic growth in South Africa was driven by a consumer boom as previously disadvantaged groups entered the middle class, and as malls (and the biggest retailers) first began to set up shop in or near the major townships.”
Amid this abundance, South Africa’s retailers and suppliers alike experienced good growth.
Trade Intelligence, was established in 2004 and celebrates its 20th year this year.
