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Follow our blogs to gain insights into contemporary market research and business intelligence trends relevant to consumers and business. The blogs serves as a platform for knowledge generation and sharing for those interested in household and personal wealth, demography and population, economic and business, consumer behavior, neuroscience and youth research. The blog supports life-long learning and collective generation of solutions related to contemporary community-related challenges impacting on South African individuals, society and regulatory environments.

STATE OF CONSUMER FINANCES DROP TO THEIR MOST VULNERABLE LEVEL EVER

THE INITIAL CONSEQUENCES OF COVID-19 AND SUBSEQUENT LOCKDOWN

The Momentum/Unisa Consumer Financial Vulnerability Index (CFVI) has declined to its lowest level ever, of 35.4 points, during the second quarter of 2020 (Q2 2020). The decline of 11.8 points from 47.2 in Q1 2020 is also the largest ever quarterly decrease measured since the inception of the index in Q2 2009. This reading, which indicates that consumer finances are in a “Very Vulnerable state”, is a direct consequence of Covid-19 and the subsequent lockdown instituted by the South African government.

This severe state of financial vulnerability appeared to have behavioural effects – the results revealed that consumers appear to be more focused on their finances and less on staying safe against the Covid-19 virus. Literature has similarly revealed that financial vulnerability can be associated with social consequences, such as an increase in criminal activity and substance abuse. All four sub-components of the CFVI declined to the Very Vulnerable state, which means that consumers, in general, are so vulnerable that they are unable to cope.

The recovery in consumer finances, following the effects of the pandemic and lockdown, will most likely be slow, an opinion confirmed by 53.6% of key informants that recovery is more likely to take longer than two years.

The main interventions or changes that key informants suggest for consumers to recover financially from this pandemic include:

  • An improvement in the local economy to stimulate job creation.
  • Entrepreneurship and complimentary income streams.
  • Financial discipline and financial literacy.
  • Restructure expenditures to focus on needs.
  • Government support (for businesses and individuals).
  • Repay outstanding debts.
  • Increase savings, despite difficulties in doing so.

To download the complete report click here >

A tribute to the first RASU client

The Research Advisory and Support Unit (RASU) team started to actively consult with postgraduate students during May 2020 and we are proud to tribute this post to our first client, Ms Esther Niemand. After completing her Bachelor’s degree in Physiotherapy at the University of Pretoria during 2015 and completing community service at 1 Military Hospital, she has continued to work in private practice in different sectors. During the past three years she has been working in an acute neurology rehabilitation centre. She completed her Master’s of Science in Physiotherapy degree at the Sefako Makgatho Health Sciences University during 2020. Her research focuses on oncology , which is the first known research in this field for physiotherapy in South Africa.

Ms Niemand was referred to one of our consultants by a colleague and required assistance with inferential analysis of data that she gathered during the course of completing her Master’s degree. Her article titled “Physiotherapy management of chemotherapy-induced peripheral neuropathy in Pretoria, South Africa” has been provisionally accepted to be published in the South African Journal of Physiotherapy and required the additional inferential analysis based on reviewer comments. Our consultant provided assistance with both visual and inferential analysis of the data. Ms Niemand provided the RASU team with a glowing review, which we truly appreciate. She stated that she was very happy with the service provided and indicated that the RASU team is highly recommendable. The RASU team would like to thank Ms Niemand for making use of our services and we wish her great success in her research journey.

CHANGES IN CONSUMER PREFERENCES FROM A BIG DATA PERSPECTIVE, 2019 TO 2020

Consumer preferences changed rapidly during the past decade. Because the Bureau of Market Research (BMR) aspires to continuously keep track of changing consumer preferences, a Market Intelligence Research Unit (MIRU) was established during early 2020. The report under discussion in this blogpost, entitled Changes in consumer preferences from a big data perspective, 2019 to 2020, is the first BMR report from MIRU. In this report, authored by Prof Carel van Aardt, MIRU aims to provide insights into changing consumer preferences and behaviour by using qualitative, quantitative, administrative and National Accounts data captured on a big data platform. The core focus of the study was to provide an indication of changes in consumer preferences during the period May 2019 to May 2020 with specific reference to the impact of the depressed economic environment, COVID-19 and the resulting lockdown on such preferences. This was done by, inter alia:

  • identifying the product and service categories in which there were increasing consumer interest over the period 2019 to 2020;
  •  identifying the product and service categories in which there were decreasing consumer interest;
  • determining the impact of declining economic growth rates on the interest of consumers in specific product and service categories; and
  • analysing the impact of COVID-19 and the resulting lockdown on consumer interest in specific product and service categories.

From the research conducted for this report, it appears that consumer interest in vehicles generally declined slowly between May 2019 and March 2020, followed by a rapid decline from March 2020 to late April 2020. This was due to a combination of factors including the lockdown, job losses and economic stagnation. This period of decline was followed by a slight increase in interest from late April 2020 to the beginning of May 2020.

An interesting pattern is evident with respect to consumer interest in computing equipment during the period May 2019 to January 2020. Consumer interest in computing equipment remained at a consistent level, after which interest in laptops increased substantially. The increased interest in laptops was driven by a combination of factors, the most important of which was an increased need to work from home as the effects of COVID-19 became more widely known during January to March 2020. This was followed by the national COVID-19 lockdown from March 2020 onwards, giving impetus to the interest in laptops for home working purposes. It is evident that many employees, who were previously office-bound, will increasingly work away from their erstwhile offices, even after the lockdown has been eased. This finding is confirmed by the fact that office chairs and home equipment have seen the greatest increases in consumer interest with respect to household furniture, equipment and appliances.

The interest of consumers in food and non-alcoholic beverages remained at the same level irrespective of declining economic growth and the national lockdown. However, in the case of alcoholic beverages the scarcity value of alcohol and tobacco, brought about by the lockdown regulations, resulted in a very strong consumer interest in these products. It is, however, expected that this heightened consumer interest in alcohol and tobacco will normalise at its pre-lockdown levels as their scarcity value declines once the sale of alcohol and tobacco is again allowed.

Consumer preferences for catering and accommodation already started a strong decline during February 2020, well before the lockdown, which was exacerbated by the general lockdown. The catering and accommodation time series shown in this report indicates that these two economic sub-sectors will not generate large-scale interest over the short to medium term and will in all probability take long to recover to pre-February 2020 levels in terms of both consumer interest and financial performance.

It is clear from this report that the period 2019 to 2020 was one of declining economic growth, with the national lockdown putting additional pressure on the macroeconomy and consumers. Furthermore, it is evident from this report that the declining economic growth rates, as well as the national lockdown, had statistically significant impacts on consumer interest in products and services in South Africa.

The findings of this report agree to a large extent with those of a number of other studies in South Africa and internationally, focusing on the impact of COVID-19 on consumers, consumer behaviour and consumer interests. In these studies it is shown that it is not just consumer interests that are changing because of COVID-19, but also their behaviour. Surveys have shown that staying alive and keeping others alive have become top priorities for consumers.

The findings of this report also show that consumers’ interests and behaviour have adapted, and are still adapting to the lockdown lifestyle. Consumers are increasingly improving their home environments for lockdown living and are also adapting parts of their homes for remote working purposes. Consumers are increasingly looking for other shopping solutions due to the fear of contagion as well as temporary store closures. It is clear from a variety of studies internationally that consumers will not revert en masse to their old shopping patterns post-lockdown. Most probably, COVID-19 consumer behaviour will become the new normal. One of the main reasons for this is that consumers actively adopted a wide range of existing and new technologies for lockdown living which they will not abandon in favour of their old interests and behaviour patterns since a new consumption normal has been created during lockdown. As lockdown and the impact of COVID-19 continue, it can be expected that such consumer interests and behaviour patterns will be strengthened and will become the new normal.

PERSONAL INCOME ESTIMATES FOR SOUTH AFRICA: Trends for the past five years and possible outcomes for 2020

TRENDS IN PERSONAL INCOME ESTIMATES (2015 – 2019)

The BMR Income and Expenditure Model was used to obtain the estimates provided in this report. Population and parameter weights were used to ensure the overall accuracy (validity) of the income estimates of the model. The updated results indicate that, following relatively high annual growth rates of approximately 7.5% during 2016 and 2017, growth rates in personal incomes have slowed to about 5% during 2018 and 2019.

Income inequalities remain a thorn in the flesh of South Africans

The analysis reiterated the existence of income inequality in South Africa as 73.8% of the adult population earned only 8.8% of cash flow-related incomes in 2019.

Despite the almost equal gender population distribution between females and males, females remain at the lower end of cash flow income earnings. Approximately two-thirds of cash flow income was earned by males during 2019.

POSSIBLE PERSONAL INCOME OUTCOMES DURING 2020

COVID-19 and the resulting lockdown are expected to have far-reaching economic growth, employment and personal income implications for South Africa. Given the troubling and uncertain times surrounding the COVID-19 pandemic, it was decided not to provide projected 2020 estimates, but rather conduct scenario analyses to provide possible personal income outcomes for this year.

The pandemic will not just result in a large number of people losing their jobs and hence their incomes being affected, but people not losing their jobs will also earn lower incomes during 2020 because of temporary business closures, temporary pay-cuts, lower salary increases, etc. In the absence of COVID-19, cash flow income is estimated to increase by 5.9% during 2020. A decline in cash flow income is expected due to job losses and the subsequent impacts on compensation growth as per the two scenarios outlined below. It is estimated that 800 000 job losses (scenario 2) will result in cash flow income estimates that are R265 billion lower compared to the baseline estimates for 2020, translating to a -1.7% change in cash flow income compared to 2019 estimates. Similarly, 1.6 million job losses (scenario 3) are estimated to result in cash flow income estimates that are R461 billion lower than the baseline estimate for 2020, translating to a -7.4% change in cash flow income compared to 2019 estimates.

Middle income groups are the most vulnerable

The employed middle class working in skilled jobs in the formal sector of the economy is expected to be hardest hit by COVID-19 and lockdown-related job losses. Compared to the expected growth in the absence of COVID-19, those earning between R 447 001 and R899 000 per annum are anticipated to suffer the greatest income losses.

The recovery process will most likely not be quick and sufficient support needs to be provided to individuals who are expected to be most impacted by the challenges arising from the current economic environment.

Formal retail trade sector: Stressed and stretched?

Introduction

This year the Bureau of Market Research Pty (Ltd) (BMR) commemorates its sixtieth anniversary of establishment and contribution to the field of socio-economic research. It will unfortunately also be remembered as the year of the unprecedented onslaught of the Covid-19 pandemic, bringing the global health and economic system to a near stand-still and reversing development gains made by a number of countries over the last few decades. There is a great deal of speculation over the potential impact of the outbreak of Covid-19 in South Africa on the country’s fiscal position. Considering the number of people supported by the fiscus, the fiscal metrics are likely to worsen as government channels money towards fighting the virus. The national lockdown announced by the President in March 2020 has made a significant proportion of consumers financially more vulnerable.  This has had a big impact on the spending power of consumers, especially with respect to the consumption expenditure of the lower income groups. Covid-19 is now expected to have a much greater impact on global economic growth than previously thought.

Key Macroeconomic Forecasts 2020

Aside from the current impact of the Covid-19 pandemic, the international economic scene has been dominated by the trade war between the United States and China as well as the Saudi Arabia-Russia crude oil battle, which has resulted in the reduction in the price of crude oil, decline in commodity prices, and a softer demand from South Africa’s trading partners. Domestically, there has been a deterioration in a wide range of key variables in the South African economy over the last decade, including a substantial rise in government debt, a dramatic increase in financial support provided by government to the major state owned enterprises (SOEs), a sharp slowdown in economic growth to an average of less than 1.0% over the past four years, Moody’s downgrade of South Africa’s credit rating, currency depreciation and a further rise in the country’s already high level of unemployment. Taking these aspects into account the BMR probabilistic macroeconomic model predicts the South African economy will contract by -9.5% and for 2020 to be a far less favourable year than 2019 in terms of the key macroeconomic indicators presented in table 1 below.

Trends in Real Retail Trade Sales Growth 2012-2019

Figure 1 presents the annual growth in real retail trade sales in South Africa, confirming that the sales have been registering a declining trend during the last eight years from a high of 4.3% in 2012 to a low of 1.2% in 2019.

Real Retail Trade Sales Forecast 2020

Taking into account the prospects of both the 2020 global, regional and local economies in the wake of the Covid-19 pandemic, the BMR estimates formal retail sales to contract by -4.0% in real terms during 2020. The highest reported declines are by retail outlets in hardware, paint and glass (-6.4%), followed by general dealers (-5.1%), and food, beverages and tobacco in specialised stores (-4.9%) as reflected in figure 2.

Real Household Consumption Expenditure Forecast 2020

Growth in consumption expenditure is normally attributed to two major components, namely, price inflation and an increase in demand.  The BMR forecasts household retail expenditure by product group in constant terms to decline across the board.  Overall, non-durable goods are anticipated to contract the most by -8.0%, while semi-durable and durable goods are likely to contract by -6.8% each and services are expected to decline by -7.4% as depicted in figure 3.

Figure 4 shows that, in terms of retail outlets, the highest expected contraction in demand by product during 2020 is  with respect to household fuel, power and water (-9.7%), followed by recreational and entertainment goods (-9.4%) and food, beverages and tobacco (-8.5%).

Conclusion

The 2020 BMR retail sales forecast shows that retail sales are anticipated to contract by -4.0% in real terms.  This forecast reflects a contraction in sales in terms of volume for 2020. Stats SA 2020 Covid-19 business impact surveys show that 89.6% of responding businesses had turnovers that were lower than their normal range. Retail stores and outlets are adapting their business models by targeting potential customers with online activities. This is done out of necessity in an effort to increase sales after registering significant declines in their offline stores, and to take advantage of new opportunities.

 

 

 

HOW SATISFIED ARE YOUR CUSTOMERS REALLY?

What we did, in a nutshell

This innovative research study applies psychophysiological insights to uncover the comparability between commonly used satisfaction measures, namely the explicit, rationally expressed Likert scale and less common implicit, feeling-based Self-assessment Manikin (SAM) responses. More specifically, the study demonstrates the use of anchoring vignettes (brief examples depicting hypothetical individuals who manifest satisfaction or dissatisfaction) as a viable means to provide consistency in meaning to the concept of satisfaction among diverse populations and individuals.  Furthermore, it enhances an understanding of satisfaction measures and supports future consumer and marketing efforts that rely on them.

How we did it

The quasi-experimental research design applied in this study involved an experimental and a control group being asked to indicate levels of satisfaction by responding to verbal (Likert scales), non-verbal (Self-Assessment Manikin (SAM)) and open-ended questions on a continuum of rational to more feeling-based or emotional responses. The experimental group was additionally exposed to controlled riming in the form of anchoring vignettes.

An extract from the report illustrates the subjective interpretation of the concept of satisfaction. Participants were asked how satisfied they were with each of three images.  The findings are reflected in the figure below:

What we found

The experimental group were more decisive in their responses with respect to either being satisfied (see full colour graph) or dissatisfied (black and white and one-colour graphs).  This finding confirms the response pattern of the Likert Scale. The experimental group also showed a greater homogeneity of responses. This is possibly due to the use of anchoring vignettes. The report furthermore reflects an analysis of Galvanic Skin Responses (ie. fingertip sweat that indicates emotion) illustrating that satisfaction levels felt, reflect more pertinently in non-verbal measures..

Why is this important?

Findings from this research add to an understanding of the impact of diversity in South Africa on surveys measuring specific concepts. It may therefore find application in the field of marketing and in other business fields where the measurement of concepts such as satisfaction, requiring consistent interpretation, is of importance. The concept of satisfaction is complex and, as such, measurement of this and similar concepts that are open to interpretation, needs to be reconsidered, particularly in the context of individual and group differences.

 

SCHOOL VIOLENCE IN GAUTENG: A CONVOLUTED PROBLEM WITH DEEP-ROOTED CAUSES

The YRU@BMR recently conducted a research study investigating school-based violence.  A total of 4760 learners and 286 educators, from randomly selected secondary schools in Gauteng, participated in the study.  Based on the research findings school violence is an everyday occurrence and schools are becoming more violent and unsafe environments for both learners and educators.

The YRU@BMR study found that 58% of learners and 48% of educators personally experienced violence at school, including physical, psychological and sexual exploitation.  Most violent incidents, including physical fights, verbal aggression, bullying, theft and harassment, happened during school time on school premises.  Based on these disturbing findings, it is evident that the causes of school violence are deep-rooted.  Both learners and educators confirmed that family problems, parental negligence, socio-economic circumstances and substance abuse are among the main causes of school-based violence.  These findings highlight that school violence is a convoluted problem that extend beyond the school environment.

The YRU@BMR study confirmed the impact of school violence is far-reaching with devastating consequences for both learners and educators.  Besides disruption and loss of learning and tuition time, learners and educators experienced intense emotions and did not always respond appropriately or received the necessary support to effectively deal with the overwhelming situation.  It is alarming that 11% of learners who personally experienced school violence, considered suicide whereas almost half (47%) of the educators who participated in the YRU@BMR study, considered resigning from their teaching positions.

Despite several existing policies, procedures and safety measures, secondary schools in Gauteng are struggling to understand the situation and grapple with disciplinary issues to address and prevent violent incidents.  The YRU@BMR study confirmed that school-based violence is a multifaceted problem, which not only requires specialised knowledge and skills, but also a collaborative approach between schools, families and communities.  For more information about the YRU@BMR research study contact Dr A. Basson at 012-429 3099 or bassoa@unisa.ac.za.

A tribute to the first RASU client

 

 

The Research Advisory and Support Unit (RASU) team started to actively consult with postgraduate students during May 2020 and we are proud to tribute this post to our first client, Ms Esther Niemand.

After completing her Bachelor’s degree in Physiotherapy at the University of Pretoria during 2015 and completing community service at 1 Military Hospital, she has continued to work in private practice in different sectors. During the past three years she has been working in an acute neurology rehabilitation centre.  She completed her Master’s of Science in Physiotherapy degree at the Sefako Makgatho Health Sciences University during 2020.  Her research focuses on oncology rehabilitation, which is the first known research in this field for physiotherapy in South Africa.

Ms Niemand was referred to one of our consultants by a colleague and required assistance with inferential analysis of data that she gathered during the course of completing her Master’s degree. Her article titled “Physiotherapy management of chemotherapy-induced peripheral neuropathy in Pretoria, South Africa” has been provisionally accepted to be published in the South African Journal of Physiotherapy and required the additional inferential analysis based on reviewer comments.  Our consultant provided assistance with both visual and inferential analysis of the data. Ms Niemand provided the RASU team with a glowing review, which we truly appreciate.  She stated that she was very happy with the service provided and indicated that the RASU team is highly recommendable.  The RASU team would like to thank Ms Niemand for making use of our services and we wish her great success in her research journey.

Contact RASU today for a comprehensive quotation.

DID YOU KNOW THAT PORNOGRAPHY VIOLATES HUMAN DIGNITY AND PUTS CHILDREN AT RISK OF EXPLOITATION AND ABUSE?

@CASEsouthafrica envisions a society free of pornography and sexual exploitation, where everyone’s inherent dignity is respected and protected.

In the pursuit of this vision, they have developed the #Pornproofing Programme to help parents and schools with the necessary information about how to become “porn-proof” and protect children in their care from exposure to pornographic material and its harmful impact.

To learn more about their “5 Easy Steps to #Pornproof your School and Home”, view their short video here >

Protect a Child, Wear a Green Ribbon!

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Introducing the Research and Advisory Support Unit

The ability to conduct quantitative or qualitative analysis is crucial to most research projects and degrees. However, the process of analysis might be very complex, technical or time-consuming and thus many students and researchers struggle with this component of their research project or degree. The inability to make meaningful deductions from any analysis can therefore delay a research project or degree.

In the light of this need and in support of the Bureau of Market Research (Pty) Ltd’s mission statement of “Shaping Market Research and Transforming Society”, the BMR has embarked on setting up a research and advisory support unit (RASU) to assist postgraduate students and researchers with the design of their research projects, analysis and interpretation of their data. The RASU team offers research support and advisory services that are based on sound scientific and strategic business foundations. The team is committed to enhance individual research skills and improve the throughput rate of postgraduate students in South Africa by offering professional research services and advice at affordable rates.

For more information about our pricing and services visit https://bmr.co.za/research-functions/research-advisory-support-unit/rasu-services/ or contact our administrative officer Ms P de Jongh at tdejonp@unisa.ac.za or (012) 429 3044.