66% of Ghanaian consumers are cash strapped– Maverick Research

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…What data is telling us about the impact of consumer retail behaviour during COVID-19

 

“I am afraid to go out to Madina in the afternoon.  I will go very early in the morning,” Julie A said, as she adjusted her face mask and carried on with her errands.

We then approached the shopkeeper to find out how business has been since the COVID19 lockdown was lifted 20th April.

“Bra, business is down 50%!”

According to Yannick Lafang, Founder of Kasi Insight, ‘the coronavirus pandemic is the most complex, disruptive and multifaceted threat that consumers and businesses have faced in the 21st century.

Our data shows that African consumers are very concerned about the pandemic and its impact on their livelihoods – particularly their job security and financial stability.  With so much fear and uncertainty surrounding the timeline and impact of this pandemic, brands have the unique opportunity to be there for customers, shifting their priorities from short-term gains to long-term brand equity growth.”

Ghana’s large informal economy comes with its challenges and opportunities, as highlighted by multiple COVID-19 -induced interventions. A myriad of opportunities exists in optimizing retail growth in the retail industry, as consumer behaviour evolves.

During the last economic recession in Ghana in April 2015 , rescued by a bailout from the International Monetary Fund (IMF), we notice a huge flight to value as a result of depressed disposable incomes.

This led to changes in buying patterns, with an acceleration of patronage affordable/good quality Chinese & Turkish options in various FMCG categories, shift in pack types preferences to single packs (sachet, PET offerings), and a gravitation to entry price points (1 and 2 GHC).

Established brands like Raid were toppled from their brand leadership positions, unleashing an era of challenger brands such as Sasso, that were nimble, adaptable and aggressive in meeting the evolved demands and budgetary affordability/constraints of Ghanaian consumers.

Now we are in the era of uncertainty  we could not have imagined six weeks ago.  So, what is the data telling us about consumer behaviour?

We interviewed 3500 respondents across seven  countries, including Ghana, monthly, to find out how COVID-19 pandemic is impacting consumer behaviour in Africa. We discovered/unlocked the following insights:

 # 1 Cash Strapped Consumers:

Sixty-six percent (66%) of consumers surveyed in Ghana said that they are struggling financially due to loss of jobs or livelihoods following the COVID-19 outbreak.

Consumers are either finding other prolonging the use of products or finding affordable SKU’s of their favourite brands

The flight to value by Ghanaian consumers amidst constrained importation of their  preferred/established goods offers an opportunity for local manufacturers to increase their supply of affordable brands, and take advantage of reduced demand for highly-priced imported commodities.

 

#2 In-person Shopping: 

In-person shopping is still the main form of shopping where? However, the pattern and psyche for shopping in traditional retail has changed. In fact, 62% of Ghanaian shoppers are still shopping in-store. During this COVID-19 pandemic,

they are choosing to shop more during off-peak hours, and buying in bulk, hence making less trips to the stores.   Presently, only 16% of respondents are shopping online, although that number may grow, if the lockdown and other interventions aimed at “flattening the curve” last longer. Here is an opportunity for local brands to offer a contactless shopping experience by leveraging digital shopping.

#3   Increased demand for healthy-conscious and protective products:

Consumers are flocking to purchase buy protective products, such as facemasks, gloves, disinfectants, and cleaning products. It is not surprising that 84% of consumers interviewed reported that these products are hard to find. Interestingly, 31% of these consumers are complained that their staple consumables are not available in the stores. Again, another opportunity for local brands to step up to fill a void in the market and increase their profits.

#4 Digital Reigns:

Ghana’s consumers reported increasing reliance on TV and social media to stay informed during this COVID-19 pandemic. Seventy percent (70%) of consumers interviewed said that they were using TV, followed by the Internet (47%), and Social Media platforms (32%) like Facebook, WhatsApp and Instagram. When it comes to messaging, as a brand it is important to remember that COVID-19 is a health crisis first. Thus, consumers are looking for brands that can communicate to them that, “We Care.”

 

In his assessment, Managing Principal of Maverick Research, Ato Micah stated that in as much as we expect the Ghanaian consumer to change shopping behaviour due to pressure on disposable income, health and safety concerns,  companies need to offer innovative products to meet the stretched household/consumer budgets, and actively engage alternate market channels that better address social distancing concerns.

 

About Maverick Research

Maverick Research and Consulting (www.maverick-research.com) is a wholly-owned African research company headquartered in Accra, Ghana.  Our partners have a combined experience of 50 years of market research experience across West and East Africa. Our mission is to leverage technology to enable better and more efficient data collection and analytics, and measure the impact on performance in real time. The team brings to the task, a myriad of experience from best practices in retooling of businesses. Our models have worked in different sectors as well as different economies. Our Insight Solutions:

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