Tapping Spaza Growth 2023

Do South Africans use loyalty programmes? Yes they do. 73% of South Africans who fall into an income bracket of R10,000 household income p.m. or above use loyalty programmes, according to the Truth & BrandMapp loyalty whitepaper 2022.

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Amanda Cromhout

CEO, TRUTH

Loyalty programme behaviours – mass market consumers

So what about consumers earning less than R10,000 household income p.m.? What is their loyalty behaviour? Thanks to the research results in the loyalty whitepaper from MoyaApp, we can determine that 82% of mass market consumers use loyalty programmes. There is minimal change to the 82% headline usage by gender or age. The loyalty behaviour in South Africa’s mass market is homogenous. Demographic differences do not seem to change this headline loyalty usage statistic.

So do lower income consumers change their behaviour due to loyalty programmes? Absolutely! Loyalty programmes are significantly influencing not only ‘where I shop’ and ‘the products I buy’, but ‘where I bank’ as the 2nd most influenced behaviour. Female customers are more influenced by loyalty programmes (for where they shop and product choice) and male customers are more influenced by banking and fuel purchases.

When it comes to how mass market consumers feel about loyalty programmes: i.e. what are the main loyalty motivations, we see that most definitely prefer to build up points for bigger rewards. Loyalty programme rewards can be seen as an investment. This saving for bigger rewards resembles the market’s positive attitude towards using stokvels.

Like we see for all South Africans and as we have seen year on year, cashback is the most preferred benefit for the mass market South African. Overwhelmingly so, 66% of the MoyaApp survey respondents prefer to redeem points into cash, followed by airtime or data. Airtime or data is preferred by 50%. It is also critical to note that educational courses feature very highly in preferred loyalty benefits. Overall, the choices made by South Africans needing a boost of cash from their loyalty programme are less likely to favour the softer benefits of some loyalty programmes (like invitation to events or lounge access).

All South Africans prefer to swipe a loyalty card to enjoy their loyalty programme than other digital means. All customers in all income brackets behave the same. – i.e. the mass market customer is no different in terms of this choice of loyalty identifier. Customers with a household income of R10,000 and below p.m. de-prioritise scanning an App as their identification choice and are more comfortable providing a cellphone number or their ID number. Typically, App usage is limited across customers with low-grade smart phones as there isn’t enough storage space to store Apps, let alone data for the download.

So which are the preferred loyalty programmes of the mass market consumer? The most used loyalty brand is Shoprite Xtra Savings, which is not surprising but its gap ahead of the next most used loyalty brand is extremely significant. Shoprite Xtra Savings is used by 67% of mass market South Africans and is followed far behind by Pick n Pay Smart Shopper (48%) and Capitec Live Better (also 48%). The following brands make up the top 10 most used programmes in South Africa’s mass market: Shoprite Xtra Savings, Pick n Pay Smart Shopper, Capitec Live Better, Clicks ClubCard, Checkers Xtra Savings, MTN YellowBucks, Vodacom VodaBucks, Spar Rewards, PEP Club Card and TFG Rewards. When the MoyaApp research survey asked if you can only keep 1 loyalty brand, which would it be, we still see Shoprite Xtra Savings as number 1, followed by Capitec Live Better and in 3rd place, Pick n Pay Smart Shopper. Interestingly, 50% of the Shoprite Xtra Savings users are also loyalty users of the Capitec Live Better programme.

Loyalty is a critical part of mass market consumers’ income stream to survive and gain benefits to supplement their daily budget. Well done to the brands mentioned in the MoyaApp research data, which are helping their consumers stretch their wallet via loyalty initiatives.