South Africans overwhelmingly believe it is important to support local businesses.
This was among the main key insights derived from Santam’s Most Loved Local (MLL) Report released this week. Now in its fourth edition, the initiative showcases some of the country’s most popular local businesses. The survey findings showed that support is exceptionally high, with 97% of consumers agreeing that it’s important to support local community establishments.
The independent survey, commissioned by Santam, was carried out by Arthur Goldstuck’s World Wide Worx among 2 400 South Africans to discover how small businesses are achieving success amid a challenging economic landscape.
Goldstuck, who is also the editor-in-chief of South Africa’s longest-running online consumer technology magazine, Gadget.co.za, says the category’s almost unanimous response was probably because of the raised awareness of the role of local businesses after the pandemic.
“Furthermore, this support is strong across gender and age groups,” says Goldstuck.
According to Fanus Coetzee (pictured), the chief executive of Broker Solutions at Santam, this support for community businesses is encouraging in the context of growth.
“The importance of fostering an environment in which small businesses can prosper goes beyond sustaining the entrepreneurs and their families, a vital SME sector promotes job creation and stimulates much-needed economic growth,” he says.
However, Coetzee adds that just as businesses are dealing with a tough operating environment, it’s important to acknowledge that consumers are dealing with similar challenges.
“Our findings showed that although consumers may have the desire to support their favourite local stores, it’s not always possible. That’s why ensuring they have a good experience and get value out of the exchange is more important than ever,” he says.
Good overall experience and value for money
Ensuring that customers have a good overall experience was once again singled out as the biggest reason customers voted businesses as their MLL spot, reinforcing last year’s shift.
The number of people who look for an overall good experience increased from 22% to 24%, while value for money rose from 15% to 19%. These were the two standout reasons, with both percentage increases coming at the expense of good service.
“However, consumers generally see the latter as being synonymous with an overall good experience. In other words, a 360-degree good experience is becoming increasingly important,” says Goldstuck.
He adds that a surprise came from a decline in customers’ concern over the quality of products, dropping to 7% from 14% previously. “This again can be partly attributed to quality being part of the 360-degree experience,” he says.
A further contributor was the rise in the importance of delivery services, from 9% to 12%, which tended to be directly correlated with age – the three younger generations, up to age 45, typically value delivery services more.
Goldstuck says, however, this is not a hard and fast rule. “(This) emphasises the need for businesses to understand their specific customer base,” he says.
A gender divide emerged in this year’s study, with men a little more likely to value overall good experience, value for money, and good service, with women likely to value the presence of a delivery service, quality products, convenience, and a variety of products. This indicates that women rely on local businesses to make their lives easier.
Impact of a constrained economy
According to Goldstuck, a new question introduced this year turned out to be the most significant for understanding the issues facing consumers.
Forty percent of respondents said the rising cost of living and the hard economic times have made it difficult to support local businesses. Petrol costs came in second, at 22%, but can be included in the overall rising cost of living.
“Combining these two findings, close to two-thirds of respondents saw economic challenges as the biggest obstacle to supporting local businesses. Neither age nor gender shifts this perspective,” he says.
Areas for improvement to retain and gain customers
Goldstuck says the impact caused by the tough economic times was again emphasised by a shift in the ranking of factors for recommending a local business, which brought value for money to the fore and pushed a good overall experience into second place.
“In terms of what more customers are looking for from their local businesses, friendly staff and going the extra mile emerged as the leading factors, with the offering of a delivery service jumping into third position overall, and into second place for women,” he says.
The increasing importance of delivery services, apart from the convenience aspect, is another indicator of the tough economic times.
“Shopping online, particularly for groceries, is a far more budget-friendly way to shop as, without extra temptations, people tend to only get what they need, and saving on petrol costs in the process,” he says.
Finally, the wish for friendly staff is more pronounced among the 56+ group, highlighting the importance of the human touch for older consumers. Interestingly, individual elements that put consumers off mostly fell a little in response rate.
Bad/slow service remained top, while unfriendly staff and poor-quality products, previously second and third, switched positions.
Two new elements, location and closed during load shedding, formed part of the rankings this year but were deemed insignificant, according to the research findings.
“This tells us that being put off by a business is a very personal matter, and that any factor could negatively affect a consumer at any time. This again highlights the need for local businesses to appreciate the specific dynamics of their customer bases,” says Goldstuck.
Most Loved Local winners
Winners were selected across 12 categories. The 2023 nationwide MLL winners in each category are:
- Local Bakery: Jason Bakery, Cape Town
- Local Butcher: Meatongrant, Johannesburg
- Local Vet/Vet Shop: PetPassion, Rustenburg
- Local Specialised Gift Shop: House of Flowers, Kimberley
- Local Interior Designer: Hoy P’loy, Cape Town
- Local Beauty/Spa: The Spa at the Oyster Box, Durban
- Local Fitness/Health: CrossFit George
- Local Pharmacy/Wellness: Umhlanga Medisport Pharmacy, Durban
- Local Dry Cleaner: Exclusive Dry Cleaners, Johannesburg
- Local Car Wash: City View Car Wash, Durban
- Local Building Supplies: Menlo Paint & Hardware, Pretoria
Exclusive Dry Cleaners has appeared in the survey’s top rankings every year and have taken the top spot three out of four years in the Dry Cleaner category, with its second consecutive win this year.
In business for over 30 years, this family-run dry cleaner is well-entrenched within the community. Owner Theo Parpottas’s solution to surviving the rising cost of materials and production lies in making sure staff are happy and always going the extra mile to take care of customers.
“We are very honoured and feel extremely proud of being voted most loved local dry cleaner again. We attribute this recognition from our customers to our extensive knowledge of the dry-cleaning process and to the fact that we never take any shortcuts,” says Parpottas.
Umhlanga Medisport Pharmacy is another regular, having placed in the top three for the past three years in the Pharmacy/Wellness category and took its second consecutive win this year.
The one-stop wellness hub has served its community since 1951. Last month, the pharmacy introduced virtual doctor consultations 24/7, complementing its full-service holistic wellness centre, which provides preventative and curative care and offers an in-store clinic service, a homeopath, and sports masseuse.
Owner David Fraser believes teamwork is the key to building a sustainable and resilient business.
“We work together as a team to serve our community, always providing the best service possible. Our pharmacy thrives on building trust and lasting relationships, supporting clients through times of need. This is paramount to our business ethos,” says Fraser.
City View Car Wash is another one that claimed a second consecutive win in the Car Wash category this year, even after a change in ownership.
When new owner Krish Padayachee took over in April, he enhanced efficiency by adding a second high-pressure machine, doubling the number of vehicles that can be washed at once, and ensuring no downtime when one machine needs a service.
Padayachee says building a sustainable and resilient business requires attention to detail.
“As an owner, you must be hands-on and always have an eye on everything to ensure customers are receiving the service they have come to expect from the business. Customers will keep coming back if they consistently receive good service,” says Padayachee.
According to the winners, the most important factors for building a successful and sustainable business are:
- offer clients good value for money through quality products;
- place customers at the centre of everything you do – always listen to your customers and put yourself in their shoes;
- friendly, personalised service;
- great customer service – give them a good experience;
- consistency, consistency, consistency;
- passion for what you do; and
- treat staff like family because you can’t do it alone.
Find the survey here: Most Loved Local (MLL) Report
