This is one of many findings of a new research study undertaken by the UCT Unilever Institute of Strategic Marketing and its research partner Bateleur Khanya Research Solutions (BKRS).
Entitled 'Project Reboot', the study is arguably the largest and most comprehensive of its kind ever carried out in South Africa during the grip of recession. The researchers surveyed 2,500 respondents and undertook numerous focus groups and video interviews in an attempt to get to the core of how South Africans are coping with the 'big squeeze'.
The research team believe their thoroughness has yielded a tremendous understanding of the complexities of consumer behaviour during the economic crisis and are confident their findings and insights will help business and industry effectively navigate these uncertain times.
In unveiling the main findings, the UCT Unilever Institute director, Professor John Simpson, cautions business that it is time to throw the traditional marketing rule book out of the window. "It is time to sit up and really listen to what your client base is telling you about why and how their lifestyle priorities have shifted. People are impacted to different degrees. While the majority of South Africans are really feeling the pinch, others are relatively untouched, but remain frugal because of the perception that we are living in very uncertain times," he explains.
The research reveals that while many South Africans report experiencing tangible consequences of the current economic crisis, 21% of the participants claimed they have yet to experience the impact of the recession. This statistic is in sharp contrast to the 76% of participants who say they are more cautious with their spending as a result of the recession.
Similarly while 78% of participants claim their personal income has not fallen in the last six months, an almost equal number of participants' report they are more cautious with their spending as a result of the recession and believe the economic situation is going to get worse.
"The discrepancies between reality and perception don't stop there," says BKRS managing director, Gordon Hooper. "For example while 69% of those surveyed say their household income has not fallen in the last six months, 59% claim they have already changed their shopping habits."
Project Reboot discovered that South Africans are in a state of unease at the moment:
Simpson and his team say these discrepancies can be attributed to the emotional responses South Africans are displaying towards the recession - even if they are rationally aware that they are yet to be adversely affected.
"This research project has been a fascinating journey for all of us," he says. "The matrix of factors affecting consumer behaviour cannot be explained in isolation to the recession alone and must take into account people's emotional and psychological experiences."
"We believe this time to be a watershed moment for local business and marketers as the ramifications of this recession will be felt a long, long time after it fades from memory. It can no longer be 'business as usual'," warns Simpson.
He is adamant that no company can be complacent and ride out the recession by rolling out tried and tested marketing practices. "In this environment, success in business will be dependent on attaining an excellent understanding of the massive shifts taking place in consumer behaviour, as well as great insight into the factors influencing these changes."
Both Simpson and Hooper maintain there is a brief, but critical, window of opportunity for SA business to rethink and revise their strategies as clients and customers rapidly adjust their buying behaviour to remain financially buoyant during the current economic downturn.
The full Project Reboot research report will be presented at seminars scheduled in South Africa's major centres next week. They will take place in Durban on 19 May 2009, in Johannesburg on 20 May, and in Cape Town on 22 May.
For more information on, or to register for, these events, see: www.unileverinstitute.co.za
