Illustrative Image: Sale sign. (Image: Freepik) | Clock. (Image: iStock) | South African flag. (Image: Freepik) | (By Daniella Lee Ming Yesca) 
There are two things about paying for shopping in some of our bigger retailers that I still find slightly strange. The first is when you have filled up your trolley, and you’ve taken it to the checkout and you can see the total as it rings up on the till. And then, when you get to paying, you can hand over a card, they scan it, and the amount that you pay goes down.
It’s almost as weird as the fact that sometimes you can watch a particular item ring up for a certain price, say a nice big bag of charcoal for over R100, and then when they scan the second bag, the green figures recognise the second purchase, add the price to the total, then recognise the promotion and the total gets reduced.
The second thing is that you can often go to a supermarket and then draw money from the cashier.
It’s been more than 25 years since I first did this (in a Tesco in London in another, younger, life) and I’m always as amazed now as I was then. There is something just wrong with the universe that you can walk into a place with nothing and walk out with goods and money.
Before online betting, it was the thing I always thought most likely to lead to the end of the world as I knew it. During the holidays, I found myself in a nice bottle store with a reputation for being quite pricey, on the coast somewhere, with my wife.
I was just ambling around trying not to break anything and stay out of trouble when I came across a particular bottle of a substance with certain medicinal properties.
Normally, it’s just too expensive for me to buy on a regular basis; it’s something I hope to get as a gift.
But the promotion cut its price by one-third.
And, Dear Reader, there are moments on family holidays when you might find yourself very much in need of something with certain medicinal properties.
It turns out that, in fact, this particular substance is in a period of what analysts call “global oversupply”. Which is why, if you’re buying a particularly special bottle for that man in your life, you should do the right thing and buy him two.
Obviously, while the use of promotions is not unique to South Africa, our retailers tend to rely on them more than in other places — a report on the Fast Moving Consumer Goods markets from Trade Intelligence last week suggests that our retailers use promotions more than any other market.
In fact, we have what they call a Promotional Intensity Level of 25-35%, while the US is only at 25-30%.
I found that interesting because I would imagine that the US market probably led to the kind of modern promotion as we know it. Brands like Walmart and Amazon are involved in pretty ferocious price competition, and I would have thought that would lead to higher levels of promotions there.
As Trade Intelligence notes, this reliance on promotions has become entrenched, in that retailers rely on them. But our shoppers rely on them too.
It seems there is literally an army of people out there who hunt for promotions and can get their families through the week by spending their Saturdays getting the best deal.
This can’t be easy. And it might suggest that while people will talk about Woolies or Shoprite being “world-class retailers”, actually, we have world-class shoppers too.
During the pandemic, it emerged that among the reasons so many households ended up spending more money on food was that people couldn’t go bargain hunting. There was no way for them to buy their potatoes here and their meat there, because moving around was so difficult.
It’s a reminder, I suppose, that the cents that are saved by so many through promotions really do lead to them earning rands that they can use for something else (or, more likely, are simply gobbled up by an electricity meter that is never satisfied).
But these promotions are coming at a cost to these companies.
The day after the Trade Intelligence report was published, Clicks released an update showing that, in fact, their promotions were beginning to cost it on the bottom line.
This led to its share price dropping significantly, as it became clear that nearly half its goods were sold on promotion.
You can see why it does this. Its main competitor, Dischem, has launched a new loyalty programme that it says offers customers more than ever before.
But a newer operator here, one with immense experience in price competition, is going completely the opposite way.
It seems that Walmart is not going for individual promotions, but rather competing on what Trade Intelligence calls an “Everyday Low Price” model, where it rather just competes on the total you pay than cutting the price of certain goods.
That means that when you get to the checkout, you end up paying what you thought you would pay.
But overall, the price is reliably low.
There’s a big advantage to that for our shoppers, of course. They don’t need to spend so much time combing through promotions.
They can literally save a huge amount of time and labour.
As someone who will never be a champion shopper (I often catch myself walking around a shop with my hands behind my back, just in case I break something), I think I might find that a much more attractive model.
I won’t have the small joy of watching the green figures go down as my total reduces.
But it will cut down on the hassle. And over time, that is priceless. DM