Part 1: RPA Customer Experience Report

Source: © 123rf 123rf Part 1 of the South African Customer Experience Report explores the huge gap between businesses and consumers

The report, authored by Charlie Stewart, CEO of Rogerwilco, Amanda Reekie of ovatoyou and Julia Ahlfeldt, CX consultant, says that while 71% of consumers want a reliable service or product offering that they can rely on and buy from again, as well as the best price (63%), the same percentage of businesses (71%) believe repeat purchases are driven by customer trust – compared with 54% of consumers who agree.

All signs point to this change in consumer behaviour as we navigate the worst cost of living crisis in decades, with many countries, including South Africa, suffering as interest rates continue to rise amid persistently high inflation, leaving our money feeling less mobile than it once did.

Current scenario

One could be forgiven for believing that price is driving demand in the current cost of living crisis.

But this is not untrue: 63% of consumers say this is a reason why they will purchase from a brand again.

Research clearly shows that consumers want to be charmed by their favorite brands and feel special, which is why they are often willing to pay more.

Brands have elevated their customer experience (CX) by improving everything from checkout, UX, shipping fees and overall customer engagement to both friction and pleasure.

This has led to the current situation where companies are focused on improving functionality (to emulate winning brands) rather than creating their own differentiated experiences.

This has led to an unfortunate “same thing” situation where few brands stand out and all deliver virtually the same customer experience.

Opportunity

This created an opportunity cost for brands of R12.148 billion.

Beyond implementing the core CX elements that make up a great customer experience (which most brands do today), there is a huge opportunity for businesses to deliver exceptional brand experiences and build brand love among consumers, which in turn leads to loyalty and repeat purchases.

Every rand and cent counts now.

However, if all experiences are “the same,” the next thing a consumer will look at will be price, leading brands to enter a race to the bottom.

Businesses can reverse this approach and look at every point in the customer journey to find opportunities to delight and connect with customers by offering them something more.

Those who manage to do this will win, turning their lost R12 billion into victory.

Key observations

Beyond this stark disconnect between what consumers say encourages repeat purchases and what businesses say drives this behavior, there are other key findings:

• Loyalty programs and rewards are not the main factor influencing repeat purchases.
• Consumers are willing to pay more for some experiences, but not all. Companies overestimate consumers’ willingness to pay a premium for experiences, especially in banking, insurance, and government. But consumers are certainly looking for moments of delight.
• If businesses and consumers close the opportunity cost gap, the internet will likely become even bigger in South Africa. Brands will then be able to delight their customers by offering something unique and different to their competitors.
• Teams should not lose sight of differentiating experiences as they work to “clean up” and modernize customer journeys. There is a great opportunity to earn customer loyalty for brands that can differentiate themselves.
• When designing or redesigning customer experiences, there is much to be gained by examining customer needs and carefully weighing the costs of change against customer satisfaction. Often, efficiency and improved experiences are the same, but not always.

Calculating the potential at 12.148 billion*

The opportunity cost of 12.148 billion is calculated as follows.

In 2023, the number of online shoppers was expected to reach 32.55 million, and this year another 6.38 million people will shop online for the first time. The total number of South African e-commerce users was 38.93 million (source: ecommerce.co.za).

If the R71 billion spent on e-commerce in 2023 (source: WorldWideWorx) is divided by the number of shoppers in 2024, this means the average annual spend per person will be R1,824.

A WorldWideWorx report shows that e-commerce spending is growing by 29% per year.

This South Africa CX Report 2024 It was found that 59% of respondents will shop this year with the same or greater frequency as in 2023.

Extrapolating the 59% figure to the projected total number of e-commerce customers suggests that 22.97 million people would shop with the same or greater frequency if organizations addressed these shortcomings.

Taking the 29% annual growth in e-commerce and multiplying the 2023 per person spend of R1,824 by this amount, we get a per person spend in 2024 of R2,353 – R529 more than last year.

Multiplying this amount by 22.97 million shoppers gives us an opportunity cost of R12.148 billion.

If businesses and consumers can bridge the opportunity cost gap, it is highly likely that online retail will become even more popular in South Africa, and brands that can do this will delight their customers by offering them something completely unique and different to their competitors.

In Part 2, we will address the increasing digitalization of society and its impact on CX.