There was a time — before Trade Intelligence was established in 2004 — when brands dictated the agenda in retail.

Companies could limit the quantity of high-demand products delivered to a single retail chain, insist that the retailer carry all SKUs of a particular brand and demand that the retailer participate in their promotions, says Trade Intelligence.

Globally, the balance of power shifted over time; however, with the rise of mega-retailers controlling access to increasing numbers of shoppers. Retailers wielded their power over suppliers in trading terms negotiations that became notorious for their stringency, says the company.

Kerry Elliot, sales lead at Trade Intelligence, says that in South Africa, retailers were further empowered by the consumer boom of the early 2000s.

"To a degree, power dynamics are also dictated by the economic cycle. In the early years of the Millennium, economic growth in South Africa was driven by a consumer boom as previously disadvantaged groups entered the middle class, and as malls (and the biggest retailers) first began to set up shop in or near the major townships," adds Ellliot.

Amid this abundance, South Africa's retailers and suppliers alike experienced good growth, adds Trade Intelligence. 

The Rise of Shopper Power

The last 12 to 15 years have seen another shift take shape — that of the increasing supremacy of the shopper.

It is being driven by the 'digital revolution', characterised by a profusion of information accessible to anyone at any time. As a result, retailers and brands are losing control over their messaging, shifting some power away from brands and retailers, and back to the shopper, says the company.

This dynamic can have a major impact on business, as the various X (Twitter) consumer campaigns against Woolworths and some of its product lines demonstrate. But it may also drive sales unexpectedly, says the company.

According to Trade Intelligence, Checkers' exploitation of the sudden, social media-driven demand for Prime energy drink — itself a product of YouTuber Jake Paul's popularity — is a case in point. Either way, suppliers and retailers have to be constantly at the ready for these surges in messaging and seemingly random fluctuations in demand.

Other dynamics have been at play too, says Trade Intelligence. During the worst of the Covid pandemic and in the subsequent supply chain crisis, people simply shopped where basics like bread and toilet paper were available.

Price inflation and economic uncertainty later reinforced this trend, with shoppers going wherever the best prices could be found, and considerations like brand and retailer becoming less critical, adds Trade Intelligence.

The grip of loyalty to retailers is being loosened even as retailers invest more heavily in loyalty programmes.

The latest Trade Intelligence Grocery Shopper Report shows that while shoppers claim that belonging to a loyalty programme makes them loyal to a store, their behaviour says differently — most household shoppers belong to multiple loyalty programmes and 82% shop at three or more retailers.

Generation Next

Another factor in the shift of power towards shoppers is of course the shoppers themselves — notably Generation Z, born from the years 1995 to 2010, coming of age with the rise of smartphones and social media, and now the most influential generation of shoppers, says the company.

Gen Z makes up 19% of South African household grocery shoppers — and while they are not a homogenous group, there are some distinct differences in their shopping preferences to older generations. How will they shape the future of retail? asks Trade Intelligence. 

According to Trade Intelligence, shoppers are now well and truly the engine room of the FMCG retail economy and their spend turns the cogs of the grocery engine, a change retailers and suppliers can only successfully face with the right tools and information. 

Trade Intelligence's inaugural SA Grocery Shopper Report has analysed South Africa's grocery shoppers using Ti's tested and proprietary lens which the company has honed over the last 20 years. The report paints a comprehensive picture of the FMCG landscape, from the perspective of shoppers themselves.

Trade Intelligence concludes that the TI lens provides information about shoppers, such as:

  • who they are 
  • what resources they have
  • where they shop
  • how shoppers define 'value'
  • what they are prepared to pay a premium for, and
  • where they look for information before they shop. 

For more information, visit www.tradeintelligence.co.za. You can also follow Trade Intelligence on LinkedIn, X, or on Instagram. 

*Image courtesy of contributor