I have often rolled my eyes when, during our monthly grocery shopping expedition, my mother would insist we buy certain items at this retailer, then drive to another retailer to buy other items and then make the trek across town to the warehouse of another retailer in search of the best items and some marginal discount. My argument was that the cost of running around town for looking discounts would be offset by the cost of fuel, wear and tear on the car, and the many hours wasted looking for a bargain was far too high to be beneficial. Let’s just buy everything in one store and enjoy the rest of the day doing things we actually enjoy. My argument fell on deaf ears as, to my mother, the savings far outweighed the hassle. There was real value in this way of shopping as far as she was concerned.
In many ways, the modern consumer is the same as my Generation X mother. We are all in search of added value.
Consumers’ pockets are more stressed now than they have been in over a century, and millennials and Gen Zs are especially vulnerable as they contend with the fact that their chances of owning a home or indeed having some sort of financial security are drying up faster than a shallow puddle in the Limpopo summer heat. There are a few reasons for this wealth and income scarcity. Covid 19, the 2008/2009 financial crisis, global income inequality, a valid worry about their future prospects, the inflation shocks of 2022 and, most recently, a rather erratic 80-year-old in a big white house across the Atlantic.
The easy premise would be to claim that because of the strain on their pockets, consumers are looking for more value for their Rand. However, this is too simplistic because we must view value as subjective. It often refers to getting more per rand spent, but more of what?
This is important as this does not mean brands have to cut their profit margins to offer value but rather to give more of the desired value to the consumer who seeks it.
Simply put, if it doesn’t offer the utility they desire and it does not bring value, consumers will not only avoid it, they will blacklist it. Remember, with the increasing competition for consumers’ attention, consumers are looking for evidence from their communities as to whether a brand provides value or not.
Let’s take a quick look at how a certain bank felt the backlash of how claims of value, were not seen as real or valid.
A popular digital bank found itself on the wrong side of the trust matrix when people realised that the discount the bank offered on domestic flights was actually not a discount at all. There was little difference between the cost of a flight purchased using the bank discount and purchasing the flight on the airline website itself.
Therefore, the perceived value didn’t exist. What followed was not just social media backlash but the erosion of the entire bank’s reputation. Value has become less about whether you can stretch a consumer’s rands but whether you are trustworthy and a companion that delivers on your word in real terms and not just as advertising fluff.
It’s clear then that value has a narrow and wide definition and that consumers seem to prefer the broader, all-encompassing definition. Although this may cause some trepidation for brands, brand custodians and owners, I think there is a silver lining.
The silver lining is that because trust, reliability and dependability are part of the wider definition of value, brands need to streamline their services to ensure they do what they promised to do. Simply, there is value in doing exactly what your brand says it does on the box, whether it’s an ISP providing dependable internet that seldom experiences downtime or an airline that is always on time or a fast-food burger joint that doesn’t sell mouldy burger buns. When a brand is dependable for doing their job, they are seen as valuable and thus adding value.
Although economic pressures, digital fatigue and the rising cost of living are driving consumers to look for more value, the value they seek is more than just bang for their buck. Its reliability, dependability and trust which brand should be doing well anyway. And the brands that fail to do so? Well, they can bank on being next on the valueless blacklist. Added value is the value that brands that have delivered on their promise fully add to their offering.
The value paid for cannot be eclipsed by the value added.
By Leroy Marc
