Cashback platform memberships and other saving innovations are buffering soaring food prices and looming interest rate hikes
As the country braces for an expected interest rate hike, the cost-of-living crisis is triggering a major shift in consumer behaviour. Recent data shows that consumers are resorting to new cost saving strategies such as cashback and discount platforms as food prices and essential household items are reaching alarming heights.
While inflation continues to ravage household finances, consumers are turning to alternative solutions to help manage rising costs.
“Consumers have reached a crisis point of trying to stretch their budget to accommodate skyrocketing costs and are looking for tangible budget friendly remedies to close the affordability gap,” says Dov Slowatek, CEO and founder of South African cashback platform, SavvySaver.
PricewaterhouseCoopers (PWC) says that nearly 99% of consumers are planning to adopt behaviours that will help them save money. Focus is on cost-saving measures.
The Nielsen Global Outlook Report 2023 says that the cost-of-living crisis has pushed consumers towards discounters (49%), chasing promotions (36%) and buying in bulk (50%), while 56% are keen to take advantage of loyalty schemes.
“The SavvySaver cashback programme has seen a sharp increase in membership in tandem with escalating food costs, with members earning thousands of rands back in cash,” says Slowatek.
The cashback platform has seen an increase of 230% in signups over the last three months, which demonstrates the severity of the effects of food price inflation on the average consumer.
Financial relief drives consumer behaviour
Consumers are being buffeted from all sides: from the annual increase of 13.6% in food and non-alcoholic beverage prices in February this year – the highest reading since April 2009, and the impending technical recession, consumers are scrambling to put food on the table.
Amid this economic upheaval and uncertainty, consumer behaviour is shifting to adopting alternatives which can increase their cash flow.
Stretching the rand further
According to the annual Truth & BrandMapp survey results which highlights ongoing loyalty trends, South Africans want the cashback loyalty benefits the most.
Unlike rewards from credit and debit cards, cashback rewards are a 100% cost-free offering to consumers, providing consumers with shopping flexibility and a means to manage financial constraints. Consumers are rewarded at all major retailers nationwide which is different to traditional retailer loyalty card programmes.
The process is quick and simple: consumers upload a photo of their till slip on the SavvySaver app or online platform and can receive cashback immediately across a wide range of items provided by brand partners on the app.
“Cashback rewards enable consumers to get money back while they shop for items they would be buying anyway. This means a cash injection, giving consumers more mileage on their spending capacity, relieving some of the shopping pressures of escalating costs,” says Slowatek.
Consumers can also pay it forward, through campaigns with non-profit organisation SA harvest which provides food to organisations across South Africa that feed those in need. Donating one’s cashback is also in the pipeline.
Brand as hero
As affordability becomes a key factor informing purchasing decisions, consumers are looking to brands to reduce financial pressure and provide cash solutions.
“Price pain has resulted in a demand for brands to provide support through solutions like cashback rewards to enable consumers to cope with ongoing inflation. In turn, partnering brands have a dedicated avenue of talking to their shoppers with access to unique granular data insights and increased brand loyalty, resulting in a win-win for all,” says Slowatek.
“Our aim is to give consumers a financial lifeline through our cashback offering, providing consumers with breathing space and greater flexibility in managing finances – putting cash back in the consumers’ pocket,” concludes Slowatek.
