SpendTrend24 report reveals 6 key insights shaping future consumer behaviour

Data isn’t just numbers; it’s a powerful tool that can predict trends and shape decisions. Thanks to a partnership with Visa, the SpendTrend24 report uses data not only from its own Discovery Bank clients but also from over 13 billion transactions and 60 million credit cards worldwide to uncover how consumer habits are changing. In a world increasingly guided by big data, understanding and using this information effectively is key to staying ahead.

Trends in international online shopping preferences

In 2023 for example, AliExpress, Amazon, eBay, Shein, and Wish were revealed to be the favoured global ecommerce platforms of Discovery Bank clients, showing South African consumers’ growing comfort with cross-border transactions and a preference for the variety, convenience, and competitive pricing offered by these platforms, particularly as the country’s disposable income growth falls behind inflation rates.

Says Hylton Kallner, Discovery Bank CEO: “The report’s expansive view allows us to explore the effects of these challenges and to compare the spending patterns of typical South Africans and Discovery Bank clients with those of other emerging and developed markets. This comparison gives us a unique lens through which to view our economic adaptability and resilience.”

Shifts in travel landscape

While South African travel levelled out post-pandemic following the “revenge travel” surge, the cost of travel is now higher than before. The SpendTrend24 report showed favourite international destinations among Discovery Bank clients were the UK, the US, Mauritius, Australia and Italy.

On the domestic front, Cape Town came out as the top destination, followed by Johannesburg and then Durban. The trend of people moving from inland areas to cities along the Garden Route has also led to increased travel to East London, George and Gqerberha.

Value-based spending

As the impact of high interest rates persists, people will keep prioritising value-based spending, preferring products and services that offer a good balance of quality and cost. This is likely to increase the use of rewards and loyalty programmes, especially in travel. To illustrate the point, in 2023, Discovery Bank clients saved over R670m on discounted flights, car hire and accommodation through the Vitality Travel platform.

The client base also earned over R300m back in Ðiscovery Miles on healthy grocery purchases with our partners in 2023.

Growth in online and in-store purchasing

Both in-store and online purchasing will see balanced growth as retailers integrate omnichannel sales strategies. Consumers increasingly expect a seamless shopping experience that combines the immediacy of online shopping with the tactile experience of in-store shopping.

Grocery apps such as Checkers Sixty60, Pick n Pay asap!, and Woolies Dash were the go-to choices for Discovery Bank clients, with the busiest shopping days taking place on Mondays and Wednesdays.

Online grocery shopping has become more popular, with between 7% and 15% of total grocery shopping occurring online. The highest use is among 31- to 40-year-olds. Interestingly, clients are spending more per purchase when buying groceries online, with an average of 29% more spent per transaction compared to in-store. With ordering in, MrD, Nandos, and Uber Eats came out tops for Discovery Bank clients.

Interest rate reductions

Insights from SpendTrend24, including expectations of central banks reducing interest rates, have significant implications for consumer spending behaviours. Lower interest rates are expected to ease financial burdens, leading to increased spending and higher disposable income.

Increase in digital wallet usage

According to Visa’s spend data, there’s been a 9 percentage point increase in digital wallet share of total in-store purchases in South Africa, with Johannesburg leading the city race in terms of digital wallet transactions growth, followed by Cape Town, and then Durban.

This shift may drive greater adoption of digital payment methods. And easier access to credit, facilitated by lower rates, will empower consumers to manage finances more effectively. Overall, these trends are anticipated to fuel further growth in digital payments, reflecting consumers’ growing preference for convenient and secure digital financial services.

Lineshree Moodley, Visa Country Manager, emphasises the value of data-driven insights in driving tangible value for clients: “At Visa, we share Discovery Bank’s passion to leverage data-driven insights that drive tangible value for clients. We believe SpendTrend24 will serve as a compass in guiding stakeholders toward more informed and actionable strategies.”