South African merchants who have survived the chaos wrought by COVID-19 are turning to data insights to help them ensure a more sustainable future. For many merchants, shifting gears from ‘survive to thrive’ has been boosted by local consumers’ love of loyalty programmes.
In an otherwise gloomy economy, data from South Africa’s largest insights-based QR code payment provider, Zapper, have revealed some encouraging retail trends, giving hope to those who have survived the first year of pandemic challenges.
“Zapper’s anonymised festive season data gives us valuable insight into consumer behaviour. Some of the key trends over the last year have shown the devastating effects of the pandemic – especially in the hospitality space. But they have also shown us how many of the more resilient merchants have turned to tech-based solutions, like the insights provided by loyalty programmes, to drive repeat business and encourage upselling,” explains Brett White, CEO of Zapper.
White explains that COVID clearly left its mark on the local economy, with fewer merchants trading during the 2020/21 festive season than the year before. However, despite the bleak outlook, customers seemed determined to have a good holiday, with the number of merchant transactions up from the previous year and basket sizes comparable to the 2019/20 trading period.
The effects of COVID also took their toll on South Africans’ natural spirit of generosity as the lockdown wore on.
“Pandemic fatigue reared its head in the later stages of the year when we saw both the purchase of vouchers as well as donations dropping off. To be fair though, as the effects of the pandemic hit our disposable income many consumers were understandably focussed on making ends meet and the help available for local restaurants and small retailers dropped off. What is interesting, is that while customers were still tipping restaurant servers – with just a small drop off in the average tip percentage across the country, from 8.4% to 7.8% – Gauteng residents remain the most generous tippers when eating out with an average of 9.3% over the last festive season,” White shares.
Nurturing repeat business through loyalty
Zapper enjoys strong support amongst local restaurants and White says insights over the months of December 2020 and January 2021 show the power of implementing loyalty offerings.
Looking at the three major centres of Gauteng, KZN and the Western Cape, transactions per customer (showing repeat business) at restaurants without loyalty programmes dropped an average of 14.3% year-on-year. By comparison, those restaurants which were promoting the Zapper built-in loyalty programme saw transactions per customer decline by just 4.7% on average during the same period.
“By encouraging repeat business restaurateurs were able to mitigate their losses even in the midst of some very poor trading conditions. This is a clear message of hope to merchants in general, but particularly those in the hospitality industry. Getting to know your customer better every time you transact with them gives you the edge when it comes to crafting new offerings and specials. Given the uncertainty of what is to come and the possibility of further lockdowns in the third wave, building resilience into your business now is something everyone can do,” White says.