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6 key imperatives for consumer companies to shrink their consumer trust deficit
South African consumer companies must consider six key imperatives to shrink the consumer trust deficit.
Source: © 123rf 123rf PwC South Africa’s Voice of the Consumer Survey 2024: South African findings report found six key imperatives to shrink the consumer trust deficit
“The bad news is there’s a widening gap between the trust that executives think consumers place in their companies and the trust that consumers have in them.
“To maintain and grow market share, companies must figure out how to build trust in several dimensions," says Anton Hugo, PwC Africa retail industry leader. Unlike their tolerance during the Covid period, consumers are showing little tolerance of continued price increases as they turn their attention to mounting non-discretionary spending.
“This has resulted in consumers searching for better value for their money, with 44% saying they would consider switching from their preferred brands to more affordable options, while only 7% said they would buy a luxury item with their leftover income after paying for bills and essentials,” says Anton Hugo, PwC Africa retail industry leader.
This is a key insight reflected in PwC South Africa’s Voice of the Consumer Survey 2024: South African findings report.
More than three-quarters (77%) of South African consumers expect the most significant increase in spending in the next six months to be on groceries.
At the same time, 75% of local consumers rank inflation as the number one risk they believe could impact the country over the next year, followed by macroeconomic volatility (55%) and social inequality (40%).
6 key imperatives
- Consumers’ purchase journey
- 83% of consumers say they slightly or strongly agree to compare prices of items between apps.
- 75% of consumers say they slightly or strongly agree that if they need to buy items from more than one store, they would rather physically go to the shops.
- 69% of consumers slightly or strongly agree to use apps to view the pricing of goods, but then buy them in-store.
- Social media is a key tool aiding consumer decision-making
- 41% of consumers say they directly buy products through social media.
- 83% of consumers say they use social media channels to discover new brands (global average: 67%).
- 82% of consumers say they seek reviews to validate a company before making a purchase (global average: 70%).
- Fostering stronger relationships with eco-conscious consumers
- 44% of South African consumers are willing to pay between 1–10% more for locally produced products.
- 47% are willing to pay between 1–10% more for products made from recycled, sustainable or eco-friendly materials.
- 51% are willing to pay between 1–10% more for biodegradable products that can be disposed of at home.
- Wellness, nutrition and sustainable food production top of mind for consumers
- Incorporating AI while maintaining the human element
- Safeguarding information to build trust
- 92% say that companies that protect their data and communicate are important.
- 90% say that companies that offer high-quality products and services and deliver a consistent customer experience and high-quality customer service are important.
- 89% say that companies that treat their employees fairly and ethically are important.
The report indicates that consumers have evolving expectations for a dynamic mix of online and offline experiences—therefore, brands and retailers need to embrace a more flexible omnichannel strategy to meet these expectations.
Nqaba Ndiweni, PwC Africa consumer, industrial products and services industry leader, says: “Not all retailers are offering alternatives to the physical store yet, as consumers enjoy freedom-of-choice conveniences when shopping in a physical store. Physical stores provide a sensory experience that other platforms don’t.
“However, retailers need to make a shift to differentiate themselves and reinvent their ways of interacting with customers—this means providing customers with more than just goods to promote a positive and memorable experience, but offering an experience in a phygital (physical and digital) world that seamlessly blends digital and physical shopping.
“For this to be executed successfully, retailers need to rethink their strategy, operating model and capabilities to match evolving customer needs and exceed their expectations.”
Social media inevitably plays a role in how consumers shop. The report indicates that South African consumers have mixed feelings about social media, with consumers ranking the social media industry second lowest (5.8 on a scale of 0–10) among 12 industries.
Key consumer insights include:
Gen Zs also indicated that they were more likely to discover new brands via social media, however, some consumers are questioning its safety and reliability.
On the sustainability front, a staggering 93% of South African survey respondents report experiencing the disruptive effects of climate change in their daily lives—higher than the global average of 85%.
A smaller but still considerable number (52%) say they are buying more sustainable products as a way to reduce their personal impact on the environment.
And interestingly, consumers who care about living more sustainably say they are willing to pay more for it.
Two-thirds of local consumers (67%) have intentions to boost their intake of fresh fruits and vegetables over the next six months, while a smaller but important group (26%) plan to reduce their red meat consumption.
“Despite these health-orientated preferences, only 14% of consumers consider the environmental implications of their food choices,” says Lullu Krugel, PwC Africa sustainability leader.
“This disconnect presents a significant opportunity for food producers, retailers and wholesalers to bridge the gap between consumer intent and sustainable practice.
“Consumers indicated a growing interest in plant-based diets, which hints at a rising awareness of the environmental burdens posed by traditional meat production—particularly beef—which is a known contributor to greenhouse gas emissions.”
She says that explicitly addressing these consumer concerns may help companies integrate plant-based options into mainstream shopping habits while being mindful that the main motivations behind these shifts are consumers’ considerations of general health (66%) and product cost (58%) when they make food and dietary choices.
With artificial intelligence (AI) infiltrating almost every industry, consumer companies face the challenge of responsibly aligning consumer sentiment towards emerging technology—like generative AI (GenAI)—with the technology’s current and potential capabilities.
A substantial 80% of local consumers express concerns about GenAI’s future developments.
Dave Ives, PwC South Africa consulting partner, says: “While customer sentiment towards GenAI is growing, many companies are investigating the opportunity to leverage GenAI tools internally to support customer processes.
“Although more than half of consumers trust GenAI for simpler tasks, such as aggregating product information or providing recommendations, consumers are less confident about its usage in higher-risk, more personal services such as healthcare.
“This means that companies must tread carefully in integrating technology that can reduce operating costs, addressing consumer concerns and maintaining ethical standards.”
An overwhelming majority of South African consumers (92%) say protection of their personal data is one of the most crucial factors for companies wanting to earn their trust (9% higher than the global average of 83%).
When asked specifically about privacy, a significant majority (89%) say they demand assurances that their personal information won’t be shared.
However, only around half feel confident that they understand how their data is stored and shared, while 82% express concerns about the security of their data on social media.
When companies go about building trust with consumers, they can do so in various ways.
Survey respondents say they value the following as most important to them:
The good news
Trust is crucial for consumers and for the companies that sell products and services to them, and as shoppers are confronting a set of overlapping and often mutually reinforcing disruptions—financial, ecological and technological—they are prioritising assurance and reliability from the brands they engage with.
“The good news for leaders of consumer-facing businesses is that global consumer markets are set to continue expanding,” Hugo says.
“The global consumer class — consisting of those spending $12 or more per day — reached four billion last year, and is projected to reach five billion people by 2031.
Global survey
Locally, 1,009 South Africans participated in the global survey which reflects the insights and perspectives of more than 20,000 consumers across 31 countries and territories on a wide range of issues, including finding value for money, caring for the environment, embracing AI and being open about their data.
