Shop Talk: Goals and own-goals galore
Hello 22seven Insights published a review of Black Friday activity on Monday. The review tracks the performance of retailers over the last six months and compares this growth record to 2021 and 2020. We highlighted Furniture, General Merchandise and Apparel as the categories that outperformed, although only Furniture achieved better growth in 2022 than in previous years. The note also disaggregated growth within each category to reveal the retailers that out- and underperformed in November among 22seven’s 50,000 users. Read more here. With the additional data now available on the 22seven Insights spending dashboards, we can delve even deeper to analyse performance and evaluate changes within income segments. As we have done in previous months, we use the Shop Talk newsletter to comment on the main themes from one of the three categories of spending that our dashboards cover: Grocery, General Merchandise and Apparel. This month, we focus on Apparel.
Spending trends from the Apparel Dashboard
Market share changes over the last six months
Gaining 1% market share when you already have 20% of the market is not the same as gaining 1% when you start with just 2% of spending. For this reason, we show the growth in market share in the table below to account for each retailer's performance relative to its starting position. In addition, we disaggregate this change into income segments to highlight the parts of the market where each retailer is faring better or worse.
In general, we note that Shein, Superbalist and CottonOn have performed well. Retailability, Pep & Ackermans, MRP Apparel and Truworths have been weaker. CottonOn has done better among higher-income customers, whereas Pep & Ackermans’ challenges have been among lower-income shoppers.
MRP Apparel’s weakness has been greatest in the segment earning R10-25k per month – a segment Insights refers to often because of its high contribution to total household expenditure. Superbalist’s strongest growth has been in the same segment.
Growth in market share over last six months
Shein gallops into the top five
Shop Talk readers will be familiar with the online Chinese retailer, Shein. We have discussed it multiple times in this newsletter and covered it in detail here and here.
Shein continues to grow. Last month, particularly, saw the retailer reach a record share of spending among 22seven users. It’s astounding that Shein now ranks in the top five apparel retail groups that are tracked by the Insights Apparel Dashboard.
The chart below shows Shein’s rise over the last two years. The fact that its share has increased nearly 4x since November 2021 is yet another warning bell to the incumbent retailers.
Shein's share of spending among users earning R10-25k pm
MRP Apparel: Time to turn that frown upside downMRP Apparel has not increased market share during November for five consecutive years among 22seven users. In fact, November has consistently been the lowest point of the year for its market share (excluding the volatile Covid period during March-May 2020). Last year, the company indicated a deliberate decision to focus on maintaining its gross profit margin at the cost of a ‘short-term’ loss of market share during the highly promotional month of November.Tracking the MRP Apparel* performance arc over the past five years shows that November 2022’s weak performance is comparable to the lows it experienced in 2018. This trend is evident across all income segments – we have shown it for users earning R10-25k per month in the chart below. With this performance, there can’t be many smiling shareholders…* Includes MRP, MRP Sport and Miladys
Sad face: MRP Apparel’s market share over the past five years
Bonus: The bets are coming in…
Sports fans are deep into the final stages of the FIFA World Cup. There have already been a number of against-the-odds results and there are undoubtedly more to come. Insights is willing to wager that no one who has watched Multichoice’s coverage of the World Cup has escaped a commercial from the likes of Betway and HollywoodBets. (Some were actually quite amusing, the first 10 times.)
Unlisted sports betting companies dominate a category of consumer spending that has grown rapidly over the last few years. Insights broadly defines this category as Online Betting, and we’re tracking spending in a draft dashboard that also includes user spending on the National Lottery. (Until the probabilist in us is convinced otherwise…)
22seven users' share of spending on sports betting and Lotto
*Other includes: bets.co.za, Gbets, Sunbets, PalaceBet and others.
What does the World Cup mean for DStv subscriptions? Not much, based on the data on the Media and Streaming Dashboard – another draft product that we’re evaluating for release next year. It shows that DStv’s share of spending is basically unchanged between October and November.
But, Showmax! The streaming service delivered its largest monthly spending share gain for the past year in November, perhaps indicating that R199 pm for Showmax Pro, which also includes all the action from Qatar, is the surest bet during the World Cup.
Showmax: Monthly change in market share
Stay ahead of the gameThat’s it from Shop Talk for 2022. We’ll return early in 2023 with our best estimate of the important December trading period, and with more differentiated data-driven research for our clients.
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