People spending less this season, prefer staying home, shopping online
South Africans are shopping more conservatively this year, and many are choosing to enjoy the holidays by avoiding crowded malls.
While more people are shopping online this year, spending is down.
This is according to Thomas Pays, CEO and co-founder of digital payment provider Ozow.
Pays said tightened pockets have meant consumers are spending less than previous years.
He said compared to December 2020, average transaction values are much lower.
“This is something many South African retailers have seen as a downward trend over the past few months in particular.
“With the volatility experienced over the past year, consumers are being extra cautious not to splurge on bigger ticket items. Instead, we’re seeing a continued shift to people buying lower-value items,” Pays said.
He said many retailers moved their promotions online or via their mobile apps in response to this change in shopping behaviour.
Data from Ozow has shown mobile has become the primary method for people shopping online, having jumped to 95% of all transactions in the past month alone.
While many consumers love to shop during the festive season, they also tend to make a lot of returns.
According to data from e-commerce company Shopify, its e-commerce merchants noted more than 80% of their returns took place in January every year.
Brick-and-mortar stores are here to stay, but an omni-channel shopping experience led by online is helping to create a more seamless shopping experience for consumers.Thomas Pays, Ozow CEO
A key finding from Shopify shows not only was there an increase in returns after the festive season, it is coupled with an increased expectation for quick turnaround times on refunds.
Pays said when online shoppers make a return, they want their money refunded as quickly as possible. “How this is done influences the way shoppers feel about a brand.”
He said returns systems were historically manual and cumbersome, which often added unnecessary frustration for consumers wanting to return unwanted gifts. “To ensure this doesn’t happen, retailers are starting to adopt automated returns and refunds systems to ensure this is a positive experience for shoppers.”
Pays said with increased expectations for improved service delivery, faster turnaround times and better systems to manage refunds, shopping and payment behaviours will continue to evolve in the coming year.
“Brick-and-mortar stores are here to stay, but an omni-channel shopping experience led by online is helping to create a more seamless shopping experience for consumers.
"Retailers that understand and get this right will continue to reap the rewards of returning customers.”
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