Over the past few years, social media has experienced exponential growth. As South African consumers dedicate an increasing amount of their daily routine to social platforms, retailers are actively seeking ways to engage with them. Notably, the surge in Black Friday media spending across Sub-Saharan Africa’s prominent social channels, has been noteworthy in recent times. In 2022, the digital media investment for Black Friday in Sub-Saharan Africa witnessed a substantial 60% increase.
We conducted an interview with Stephen Newton, the Managing Director of Aleph, who acts as a representative for companies in Sub-Saharan Africa, including X, TikTok, Snapchat, and Spotify in order to gain further insight in to how business is being conducted in the region.
Newton, formerly at the helm of Google’s operations in South Africa where he spearheaded the launch of Google Maps and Google StreetView, has transitioned to Aleph who represents X, TikTok, Snapchat, and Spotify across the African continent.
Questions
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How do social media and retailers interconnect, and in what ways can retailers leverage this connection as a valuable asset?
Consumer behaviour has shifted, resulting in people spending a considerable amount of time on Social Media compared to Traditional Media. 3.44 hours a day here in SA. This usage is expected to continue if not increase over the holiday period. This has resulted in consumers feeling more comfortable with making purchases online generally and increasingly more so via their chosen social media platforms. SMBs have the opportunity to capture a share of voice that may have been unaffordable before. Your consumers are on social media and you can reach them within your chosen budget and you can measure the results.
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Research indicates that customers who utilise Augmented Reality (AR) to try on a product are 76% less inclined to return it. Can you explore further the factors that contribute to this change in consumer behaviour?
This type of shopping experience provides an immersive experience that lets customers interact in real-time with products in a virtual environment.
With augmented reality in eCommerce, on platforms like our partner Snapchat, customers can control the product in a digital world to see how it would look on them, or how it would look in their space. Size, color, features, room placement and more are just some of the features customers can experience in a digital world. Trying the product beforehand helps the customer feel more connected to the product.
Trying out a product in a virtual environment makes the product more tangible. It improves buyer confidence which minimizes the chance for buyers remorse. As a result, they are less likely to return their product. Ultimately this saves companies on shipping and restocking costs.
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As the Managing Director of Aleph, representing major platforms such as X, TikTok, Snapchat, and Spotify, how do you envision the evolution of these social media channels as advertising platforms for retailers in Africa?
X (formerly known as Twitter) has introduced several bottom-of-the-funnel ad units over the past year to help brands ‘Drive to Buy’ (for example, Search Keyword Ads). The platform is also testing Live Video Shopping and other exciting e-commerce solutions. TikTok has solidified its position as a performance platform and almost weekly introduces new ways for advertisers to reach consumers. Augmented reality (AR) is another area that has risen in popularity, particularly in the Try On space.
Apps like Snapchat give cosmetic, fashion, and footwear brands the ability to allow potential buyers to try on items virtually. Research shows that shoppers who try on a product in AR are 76% less likely to return a product post-purchase. Amazon allows consumers to place furniture and appliances in their physical space to see what it would look like, which can be a powerful motivator for purchasing the item. In some of the more mature markets, Meta platforms are integrating more closely with retailers like Amazon to offer consumers the ability to purchase items without leaving the social media environment. Undoubtedly, these types of features will hit our markets eventually.
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How are retailers in Africa adjusting to the increasing importance of digital media in the realm of e-commerce, and what pivotal trends are influencing this transformation?
Businesses are using social media platforms such as Facebook, Instagram, and Twitter to reach their target audiences and engage with potential customers
Key trends shaping evolution:
1) The increasing adoption of smartphones and mobile internet: The number of smartphone users in Sub-Saharan Africa is expected to reach 600 million by 2025. This means that more and more people in the region will have access to the internet and will be able to see social media ads.
(2) The increasing availability of digital advertising solutions: There are now a number of digital advertising solutions available to businesses in Sub-Saharan Africa. These solutions make it easier and more affordable for businesses to advertise on social media.
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Looking at the influence of technology on retail and advertising in Africa, what trends do you anticipate and what measures should businesses take to prepare for these forthcoming changes?
In 2022, TV advertising spending in Sub-Saharan Africa was estimated to be US$3.2 billion, while digital advertising spending was estimated to be US$2.5 billion. This means that TV advertising accounted for about 56% of total advertising spending in the region, while digital advertising accounted for about 44%. However, digital advertising is growing much faster than TV advertising.
In 2022, digital advertising spending in Sub-Saharan Africa grew by 18%, while TV advertising spending grew by only 3%. This means that digital advertising is slowly catching up to TV advertising, and it is expected to eventually surpass TV advertising in the next few years.
Businesses should ensure they implement an always on digital advertising strategy to ensure they are maintaining a share of voice online and that they are reaching their target market through the channels that consumers spend most of their time.
