Hello and welcome to the first Nugget of 2024, where we’re taking a backward glance at spending during the festive season. Thanks to the double whammy of Black Friday and Christmas, it’s no surprise that November and December are the two most important months of the year for many retailers, contributing a substantial chunk of total annual sales.

‍How important, you might ask? In anticipation of the release of those all-important December trading updates from locally listed retailers, we looked at festive season spending trends by 22seven users over the last five years for non-grocery retailers, excluding 2020 when Covid messed things around a bit.

Let’s dive in.

When we consolidate average monthly spending over the period, it’s clear that November and December punch well above their weight. Combined, the final two months of the year contribute nearly a quarter of annual sales.

To better understand this trend, we segmented the data into various retail categories. If spending was spread equally throughout the year, each month should contribute 8.3% to annual sales, and any two-month period should account for around 16.7%. In November and December, however, most categories outperformed this benchmark. A few categories in particular – notably Footwear, Furniture & Home and Sports & Outdoor – generated 20% and more of their annual sales over the festive season.

When we look at the spending split between November and December, there’s a significant spike in December for Footwear and Sports & Outdoor. Maybe these categories aren’t as heavily influenced by Black Friday, or maybe Santa is just big on gifting shoes and camping gear?

Total spending is made up of two metrics: transaction value and number of transactions.

In November, thanks to Black Friday, our consolidated data shows an increase in the number of transactions, although the average transaction value isn’t significantly different to other months. December doesn’t show a notable increase in average transaction value either, but the average number of transactions builds on the November spike by a further 17%. (The empirical evidence as to why malls feel so busy around Christmas…)

Our estimate of December spending will be published later this week, featuring actual spending growth in various categories at different retailers over the most recent festive period. Want an early read on 2023 spending trends before the retailers release their own updates? Get in touch to find out more about the Insights dashboards and subscription plans.

22seven Insights gives professionals a unique view of consumer spending, even when private companies are involved. Nugget is our free newsletter about data-driven consumer trends. Make sure you don’t miss one – sign up here.

Aggregators like Mr D Food and Uber Eats have changed the way we spend on meals. Choosing from an almost endless array of menus at the touch of a button, from the comfort of your living room, has eaten into spend at sit-down restaurants and traditional takeaway outlets. (Excuse the pun.)

We wanted to see just how far the pendulum has swung. How much more are 22seven users actually spending on food delivery, compared to eating out at restaurants and takeaway outlets? How often are they using the service and are they spending more per order?

Looking at average monthly spend per user, aggregators are in the lead. On average, hungry people with debit and credit cards who use aggregator apps spend R500+ more per month than people who buy from traditional takeaway outlets, and R100+ more than people who spend at restaurants.

But it’s not all bad news for restaurants. When it comes to average transaction value, restaurants still command the highest spend. This shows that customers are willing to fork out a little more for the overall experience of dining out. (There are only so many burgers you can eat in front of the TV, right?)

The final metric we looked at was average number of transactions per month. This gives us an idea of the popularity of the various channels, and here the aggregators are winning again. Users who spent on aggregator platforms did so more than four times per month – twice as often as users who spent at traditional takeaway outlets. This is likely driven by the urge for instant gratification and how easy it has become to use apps like Uber Eats and Mr D Food.

What does it all mean? By their nature, aggregators consolidate spending at various food outlets, so it’s logical that people will spend more per month on delivery apps than they would at standalone establishments. If we multiply the average transaction values with the number of transactions per month, this is exactly what we see. Side note: many of the individual restaurants and takeaway outlets are affiliated with the aggregator platforms and are likely sharing in some of the spoils.

This research is an example of our ability to analyse niche areas of consumer spending, even when private companies are involved. If you want to dive deeper into the world of food spending, or if you need intel on any other sector – retail, grocery, apparel, homeware, transport, communication, health and more – please get in touch.

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It must be Valentine’s Day again because Harold is taking calls from lovelorn individuals looking for relationship advice. This year it’s Cyril, who’s facing the prospect of an unavoidable candlelit dinner…

Save for a few years where Harold was axed in favour of Bra Gift, his snarky nasal voice has been the cornerstone of NetFlorist’s February marketing campaign and a reminder that you had better get ordering.

Did you spoil your significant other with flowers or a gift? See how your efforts compare to what 22seven users spent at Netflorist in 2022...

NetFlorist was founded on Valentine’s Day in 1999 as an e-commerce experiment and Valentine’s Day remains the retailer’s most profitable calendar event, followed closely by Mother’s Day. Our 22seven data confirms this, with the number of users purchasing at NetFlorist peaking in February and May.

22seven users who panic-ordered their Valentine's Day gift the day before appear to have paid the price… Of all the days in February 2022, the day before Valentine’s Day saw the highest transaction values at NetFlorist, with an average spend of R683.

Raise a glass to the 22seven users who backed up flowers with dinner: 27% of users who purchased from NetFlorist in the first two weeks of February also registered an eating-out expense on Valentine’s Day, with an average value of R239. (Insights can’t guarantee that the recipient was the same person…)

So, there you have it. The benchmark has been set. We hope you’re having a good Valentine’s Day and that you remembered the flowers. If not, there’s always Mother’s Day!

When we analysed the ISP market a year ago, we showed how the work-from-home trend during the pandemic accelerated the need for fast, reliable internet. Unsurprisingly, median monthly spend spiked in 2021 and remains substantially higher than pre-Covid levels.

We thought it would be worthwhile to have another look at this competitive industry and see if any new trends have emerged.

The first insight might be a no-brainer: consumers tend to stick with one ISP for all their home internet needs. In other words, they don’t shop around and cherry-pick products from different service providers. Only 10% of 22seven users engage with more than one ISP each month.

When it comes to monthly spend, Cool Ideas leads the pack as it did last year, with a similar median amount per user. Likewise, wireless-only Rain still attracts the lowest monthly spend. There has been a fair amount of movement among the mid-pack ISPs, however – we’ve masked those results to be fair to subscribers.

Next, we segmented spending by income bracket and discovered that some ISPs demonstrate consistent spending across all income brackets, whereas others exhibit intriguing variations.

Take Afrihost and Rain, for example. Afrihost customers in the highest income group spend 2.7x more per month than those in the lowest group. Rain, on the other hand, has a consistent median monthly spend across all income groups, with only a R20 discrepancy between highest and lowest. This reflects Afrihost’s vast array of fibre and wireless product options, at various price points, and Rain’s comparatively limited suite of wireless products.

Our home internet research is yet another example of our ability to analyse niche areas of consumer spending, even when private companies are involved. If you want to find out more about the other ISPs featured, or if you’d like to gain a comprehensive understanding of any other sector of consumer spending, get in touch.

This weekend, more than 20,000 cyclists will take to the car-free roads of the Cape Peninsula for the 45^thedition of the world’s largest timed cycling race. Yes, it’s Cape Town Cycle Tour again!

The CTCT – previously the Argus Cycle Tour – is a beautiful experience and a huge asset for the Cape Town economy as thousands of people travel to the city to participate. According to David Bellairs, the director of the Cycle Tour Trust, just under half of this year’s entrants will be coming from outside the Western Cape to ride the full 109km route.

We wanted to know how much the CTCT benefits Cape Town, and what kind of financial investment is required when it comes to your bike and your gear. First, we identified 22seven users who entered last year's event. Then we split this group into those who live in the Western Cape and those who travelled from other provinces. Of the group who travelled from other provinces, over the weekend of the 2022 Cycle Tour, the average rider spent R1,120 on eating out and entertainment – two categories that are most likely to benefit the local economy. By comparison, entrants from the Western Cape spent R767 on the same categories. This shows the value to Cape Town of attracting participants from outside the region…

Next, we wanted to know what it takes to ride the Cycle Tour. Not the physical effort – the financial cost! To find out, we tracked the spending of users who entered the 2022 Cycle Tour at more than 25 bike shops across the country over the six months leading up to the event. The average spend by 22seven users was R1,680 over the period, or R280 per month.

Are you riding this year? Good luck to all the participants! Hope the sun shines and the wind stays away. Have a safe ride and enjoy.

Motorsport fans, the wait is over.

The 2023 Formula 1 season kicks off in Bahrain this weekend, and what follows is one of the wildest travelling circuses on earth, featuring 23 races in 20 countries on five continents. This Twitter thread shows the craziness of the logistics involved and highlights what a global sport F1 has become.

One of the reasons for the sport’s rapid growth in recent years is the hit Netflix documentary series Drive to Survive, which premiered in 2019 and gives a dramatic, behind-the-scenes look at life in the fast lane. Drive to Survive was particularly successful at boosting engagement in the US – so much so that there will be three F1 races on US soil this year, for the first time ever.

The way we watch sport is changing and F1 is moving with the times. Fans now have the opportunity to subscribe directly to F1 TV, bypassing the local broadcast-rights holders. In South Africa, that means DStv…

We wanted to see what the subscription choices of 22seven users say about local demand, and how fans choose between F1 TV and DStv.

First, we looked at the growth in subscription numbers to F1 TV in South Africa. Over one year from 2021 to 2022, there was a 111% increase in F1 TV subscribers, compared to 1% and 7% for DStv and Netflix respectively.

This is interesting in isolation, but it’s even more relevant when you split out the users who subscribe to F1 TV as well as another streaming or entertainment service.

We found that 59% of F1 TV subscribers also have Netflix (suggesting exposure to Drive to Survive) and only 14% of F1 TV subscribers also have DStv. Based on monthly premiums, we believe that most of the latter crossover subscribers are paying for lighter DStv packages without access to premium sport, such as F1.

Given the growth in subscriptions to F1 TV, it’s clear that an increasing number of South Africans are getting into F1. It’s also clear that there’s a strong relationship between F1 TV subscribers and Netflix subscribers.

Sport has long been the differentiating factor for DStv’s more expensive subscription packages. However, as streaming technologies disrupt how live sport can be viewed, the F1 TV example suggests that many fans will choose to subscribe directly rather than take a bundled option.

Thanks for reading. If there’s an area of consumer spending you’d like to know more about, get in touch.

Analysing the consumer market in South Africa is complicated. We have a huge income discrepancy: the vast majority of people earn very little, whereas a small percentage earn a lot. Depending on the retail category, this uneven distribution means that one brand might be an everyday purchase for some and out of reach for others.

‍At the same time, retailers and companies position themselves to target particular audiences. This is normally linked to price, and therefore the income of the consumer group in question.

For any aggregated group of consumers, it’s a given that the average transaction value at a particular retailer will increase as the group’s income increases. But how consumers in an income group perceive a retailer depends on what they spend at all the other retailers they shop at.

‍Take the apparel industry. In a recent research note, we ranked the average transaction values of 22seven users at 150+ clothing and footwear retailers within four income brackets, to determine how consumers in each bracket engage with those brands. In other words, by comparing the relative transaction values of all the clothing brands within a particular income bracket, we were able to evaluate whether a retailer is perceived as ‘value’, ‘aspirational’ or ‘luxury’.

Look at Mr Price, for example. Average spend at MRP increases as income increases, but this amount is low compared to what the same shoppers spend at other clothing retailers – a trend that is consistent across income groups. We can therefore deduce that MRP is perceived as a value brand for all shoppers.

H&M is different. Consumers in lower income groups spend a bit more here than at other retailers, which suggests an aspirational positioning. But spend by higher income groups is comparatively low, suggesting a value position for these shoppers.

And then we get Nike. It’s a standout brand because median spend ranks in the top five of all retailers across all income groups. In other words, irrespective of how much people earn, they’ll spend more per transaction at Nike than they will at almost all the other footwear and clothing stores they visit.

This is just a taste of the full report, which we believe is the most detailed retail-level decomposition of the South African apparel market available to investors and retailers. It’s also an example of the depth of our research – our ability to isolate and evaluate consumer spending in any category, down to brand level. Interested in taking a deep dive into your industry? Contact us to find out more.

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Nugget is 22seven Insights’ free newsletter about data-driven consumer trends. Make sure you don’t miss one – sign up here. 22seven is a safe and secure digital service that allows you to see all your money in one place and get a personalised budget, automatically. Our goal is to help South Africans take control of their finances.