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Brand Trends for 2019: Winning Consumer Trust in a Toxic Climate

From data breaches to fake news to state capture to corporate failures, issues of trust and transparency ruled the headlines in South Africa and the rest of the world throughout 2018. As we move into 2019, the central challenge brands will wrestle with is that of embracing new roles and business models that build trust with consumers and drive mutual value for company and consumer.

Here are some of the trends we expect to shape the year to come, based on insights from our consumer research, including the GfK Consumer Life 2018 study*:

1. Consumers are keeping the faith

2018 was a turbulent year on the geopolitical front, from Donald Trump’s divisive presidency in the US to populism in Europe to the ongoing Brexit saga, to the trade row between the US and China. In South Africa, a heated debate about land reform and revelations about the depth of state capture during the Zuma years have dominated the news.

Little wonder that the Oxford Word of the Year 2018 is ‘toxic’ – we are seeing low levels of global trust in the institutions and organisations that shape our everyday lives. Governments, corporations, the media, social media platform companies like Facebook, even the essential nature of democracy and capitalism are under scrutiny.

So, what we find quite interesting is just how resilient consumers in South Africa and the rest of the world are in the face of economic and political uncertainty. Our Consumer Life study finds that South Africans are understandably concerned about crime and lawlessness, recession and unemployment. Yet 76% of our respondents are confident about their own economic future and 77% feel that their children will have a better future. People in the middle LSM bands (6 and 7) are as confident as those in LSM 9 and 10.

2. Brand trust in a toxic world

Our surveys in developed markets like the US and UK show that consumers, especially Generations Y and Z, prefer to purchase goods and services from trusted brands. They also expect brands to step up to the plate when it comes to social concerns and to do the right thing when it comes to the causes and issues they care about. In other words, the crisis of trust in traditional institutions is creating new opportunities for purpose-driven brands.

The most successful brands of the future in South Africa and the rest of the world will be those that have a perspective and purpose that looks beyond quarterly and annual earnings-they will be profitable because they do the right things and create win-wins with consumers and communities. Among South African consumers, 46% will select a brand if it supports a cause; among Generation Z, this rises to 54%, highlighting how this trend will only grow in importance in the years to come.

The new brand mandate is to stand for something and to bring about good for a community beyond shareholders. Brands that align themselves with a purpose can build enduring relationships with consumers in a world where so many products and services are so similar and so commoditized. But they will find themselves under fire if their positioning is not authentic.

Simply paying lip service to the notion of ‘social good’ through CSR activities on Mandela Day or fulfilling the requirements of the black economic empowerment codes and charters is not enough. The brand’s purpose and values must be embedded in every aspect of its operations-from the supply chain to manufacturing to terms of employment to consumer service.

In South Africa, many brands are already filling gaps in government service provision, such as the Outsurance traffic wardens who served Johannesburg for years. Expect more of this to come down the line as brands try to tune into the social conscience of their younger customers and to find ways to differentiate themselves from the pack.

3. From owning to sharing

The sharing economy is a natural fit for South Africa, where many people have for years used stokvels as a vehicle for saving and for mutual insurance. We are seeing rapid adoption of the sharing economy because it adds digital convenience to behaviours we already see among many people across the county and because it appeals to their sense of community.

Some 38% of South African respondents have used a ride sharing service such as Uber or Taxify and 13% have used room sharing services such as Airbnb. We expect to see adoption soar in 2019 as people become even more comfortable with these services.

As with many other trends, the move towards sharing is driven by younger consumers, who perceive shared services to be more efficient, sustainable and affordable than owning assets.

4. Pivoting from product to service

Related to the trend above, innovative consumer brands are reinventing themselves as lifestyle services companies rather than competing as product vendors. Music today is more often consumed as a streamed service than as a physical product; people increasingly use software-as-a-service on the Internet rather than buying a personal usage license; even transport is less about owning a car than knowing how you will get from one place to another.

Today, Apple is generating an increasing share of its revenue from services rather than devices, while products like cars are sold with wraparounds such as innovative financing and servicing plans.

The trend is causing some interesting shifts in the market-for example, look at how Yuppiechef has expanded from the online world into physical retail to offer advice and a showroom to its customers.

5. Everybody loves a good deal

Most people like a good deal, and digital technology has made it easier than ever to find one. Among Consumer Life respondents, 80% used a device in the previous 30 days to search for better deals online. Some 77% report that that they will be satisfied or even excited when they get a really good deal-a number that interestingly rises to 88% among LSM 9 and 10.

It seems the film, Crazy Rich Asians is right: “No one likes free stuff like rich people”. Consumer behaviour on Black Friday bears this out: many wealthier consumers are online seeking bargains on electronics for a thrill, while people from lower LSMs head for the malls and supermarkets seeking savings on day to day essentials. This trend will accelerate in 2019 as digital comparison-shopping rises.

*GfK Consumer Life is a global data and insight service that provides a longitudinal view on how consumers’ everyday lives are evolving. It is an annual survey that GfK conducts in 27 countries, including South Africa. Our 2018 research is drawn from online mobile interviews with a representative sample of 1,000 LSM 6-10 South Africans who have internet access.

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