Lockdown may have kept consumers indoors but that doesn’t mean they stopped shopping. According to Nielsen South Africa, 30% of people surveyed used online shopping during lockdown Level 3.
But what exactly were consumers buying?
When the country first moved from lockdown Level 4 to Level 3 in May this year, there was an uptick in the acquisition of large appliances, including fridges, dishwashers and vacuum cleaners.
According to Teljoy Procurement Manager Jazeign Kesari these purchases were no doubt driven by necessity, but the dishwasher trend, for example, was certainly a case of an “affordable luxury” during a pandemic.
There was some expectation that gaming consoles like the Xbox and PlayStation would be popular but this was not the case for Teljoy.
“It is likely that with household finances under pressure, people opted for the essentials instead,” Kesari believes. He adds that for Teljoy specifically there was a downward trend in interest in gaming consoles. “This may be in anticipation of the PS5 launch next month.”
A now well-documented consequence of the COVID-19 lockdown is the shift in priorities in terms of what we need from our homes.
“We definitely saw an increased interest in things that help make a home more comfortable but also more functional for working from home, such as office furniture and also laptops and notebooks, Kesari shares.
Rentals on the rise?
The coronavirus pandemic has also put great strain on household incomes, with the household debt to income ratio sitting at a worrying 73.7% for the first quarter of this year, according to the Reserve Bank.
This pressure on consumers’ pockets has boosted the rental economy as rent-to-own offers more flexible purchasing options and a risk-free alternative to high-interest credit.
“We’re finding that people are deferring the purchase and/or replacement of big-ticket items, such as appliances and furniture, and opting rather to rent these items and then finding that it makes more sense anyway,” Kesari says.
Ditch debt
A recent survey by fintech platform PayCurve found that nearly 80% of South Africans are forced to turn to unsecured loans to meet their monthly financial obligations. Alternatives that help address this worrying statistic need to be welcomed.
“Rent-to-own is one such alternative that allows for access over ownership and eliminates the credit risk on the consumers, while also taking care of the insurance and maintenance,” Kesari explains.
Lockdown has accelerated the growth of ecommerce in South Africa, as it allows for the convenience of shopping from the safety of home.
Online platforms positioned to address the needs of consumers in the time of coronavirus are sure to hold up well against their brick-and-mortar counterparts, if not better.