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KarenAttyah-2x2

Karen Attyah
Strategy Director,
Landor Cape Town

Trends in South Africa

November 18, 2013

The good business journey 

South African brands have begun embracing brand purpose by incorporating it into every aspect of their businesses. Purpose is no longer limited to a single issue like sustainability or social investment; instead, brands are working to impact multiple categories at once. 

Successful initiatives do good on many levels: delivering products and services that support business aspirations; achieving environmental sustainability; building strong communities; and investing in innovation. 

Woolworths in South Africa is leading the way in brand purpose. The company has fundamentally changed its business approach to prioritize its commitment to social transformation and sustainable energy, water, farming, and fishing. It has decreased energy consumption by almost 27 percent since 2004 and was named one of the developing world’s 16 sustainability champions. 

High loyalty, high reward 

Sluggish growth in South Africa has left most consumers highly conscious of their wallets. Brands have responded by offering reward programs, a relatively new strategy for the country. The insurance company Discovery has introduced an innovative program called Vitality, the first of its kind in South Africa, that rewards customers as they act to improve their health. 

Powerful partnerships make it work—Vitality members get significant discounts to gyms and cash back on healthy food at Pick n Pay or Woolworths. Healthy behaviors, in turn, earn points for members, who then receive discounts on their insurance bills. Up next for the brand is Discovery Drive’s Vitalitydrive, which rewards safe driving with petrol discounts. 

African brands looking to build successful reward programs will reach out to powerful, inspiring partners, use innovative tools to make participation easier, and provide immediate rewards. 

Growth elsewhere

South Africa’s lagging growth and polarized class structure have led some large brands to move beyond the country’s borders to capture growth in East and West Africa. Other international brands are bypassing South Africa altogether to invest in Nigeria, Kenya, or Ghana. 

The keys to successful expansion on the African continent will be:

  • Consistent, high-quality supply and distribution. Shoprite had a first-mover advantage, but also secured a leadership position by developing local supply chains that deliver quality and consistency. 
  • Products tailored to regional markets. In Kenya, Chinese car brands are offering products optimized for the area, such as larger petrol engines for the long distances traveled by lorries.
  • Adoption of alternate payment systems. The haberdashery Suitsupply now allows Kenyan consumers to pay with m-Pesa, a mobile payment system extremely popular in the developing world.

 

 

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