Survey shows SA consumers are really warming up to online transactions

A new survey shows how much SA consumers like online transactions, with 87% of participants using digital channels to bank, while 62% use it to shop for non-grocery items and 48% to shop for groceries.

The research for the report, Understanding the gap between what SA consumers want vs what businesses are delivering online, was conducted on behalf of CM.com among 2 000 digitally active South Africans during April and early May 2022. CM.com specialises in cloud software for businesses to improve customer experience.

Aimed at understanding the gap between what SA consumers want compared to what businesses are delivering online, the key take outs are that everyone buys everything online, with contextual chatbots keeping the conversation flowing 24/7. In addition, the empowered, impatient consumer is here to stay and improved satisfaction leads to extended usage.

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How online transactions have changed

According to the report, it was inconceivable even a few years ago that South Africans would embrace online to the extent they have. Life has moved online for people across all income brackets, with the appetite for online banking and buying grocery and non-grocery goods well established and fuelled in part by the pandemic and lockdowns.

Participants indicated they also used online or digital channels to book accommodation (43%), book flights (30%), book Covid or other tests (23%), seek financial advice (22%), buy insurance policies (22%), complete medical history/screening questionnaires (20%), book doctors’ appointments (19%), claim from insurance companies (16%) and medical insurance or medical aid (14%), get information about medical results (15%), buy insurance or medical aid (13%) and shopping for clothes and beauty products (1%).

Consumers also looked for and applied for jobs, attended classes online, renewed their driver’s licenses, did online trading and booking bus tickets.

However, what is noteworthy is the increasing percentages of purchases in other sectors, with over 40% booking accommodation online and 30% booking flights. More than a fifth of the participants even bought insurance policies online.

Other interesting facts about consumer behaviour in online transactions include:

• Participants who earn a household income of more than R10 000 per month are more likely to bank online and do grocery and non-grocery shopping online, as well as book accommodation and flights and purchase insurance.
• More affluent households earning over R30 000 a month tend to be very deeply entrenched in the online space and use it significantly more than their less wealthy counterparts, such as medical and insurance purchases.
• Only 4% of this sample did not do any of the highlighted activities online, although they completed the survey on the internet.

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Most popular online channels

“At a glance, websites and mobile apps appear to be the most popular shopping channels, but when you add Facebook and Instagram, social media actually dominates, with nearly a third of the sample (27%) claiming either Facebook or Instagram as their preferred platform for shopping. There are now more people claiming to use WhatsApp for shopping.”

The participants indicated they use websites (24%), mobile apps (23%), Facebook (18%), WhatsApp (14%), online classifieds (11%) and Instagram (9%).

“This picture becomes even more interesting when viewed through the lenses of income and age, with 18–24-year-olds significantly less likely to shop on websites and apps, but are more likely to shop on Instagram and 25-34 year-olds are more likely to shop on mobile apps and 35-49 year-olds more likely to shop on Facebook and less likely, along with the 50+ age group, to shop on Instagram.

“The numbers also skew somewhat along income lines, with households with incomes under R10 000 a month less likely to shop on websites and those in households with an income over R10 000 more likely to shop on websites and those in the highest income brackets earning over R30 000 a month more likely to use apps to shop and less likely to shop on WhatsApp.”

WhatsApp is not only used for shopping by 37% but is also the chosen channel for communication by 52%.

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Barriers to moving more transactions online

However, for most customers, the biggest barrier to moving even more of their business online is poor user experience. Only 9% have no problem with online channels and simply preferred offline channels, but the balance of the 35% who prefer personal contact have other issues with online channels.

Asked what stops them from doing more online, 42% said they do not like getting stuck in a loop with automated responses, 25% said online businesses are not responsive enough, 22% said businesses have no humans to help when they get stuck, 35% prefer personal contact, 32% said in-person service is better than online service, 24% said it is easier to phone, 22% said their problems do not get solved online, 42% hated automated responses, 25% believe that online businesses are not responsive enough and 22% would like a human there when they get stuck.

According to the report, key frustrations when trying to resolve a problem online were ultimately all linked to a lack of convenience, while the advantage of online is its immediacy and constant availability, but this convenience is negated by delayed or generic responses, by customers having to repeat themselves frequently and getting irrelevant automated responses.