SIMON BROWN: I’m chatting with Jonathan Hurvitz, Group CEO for Teljoy. Jonathan, I appreciate the time. An article you wrote online recently [for Retailing Africa, began with] “Madonna’s self- and materially obsessed ‘Material Girl’ of the late 1980s is gone.” I’ve got to say that aged me, but we’re not here to talk about my dancing in dingy clubs in the eighties. What you’re essentially saying is that consumers really are looking for value, and that value is more than just rands and cents. It’s about looking good, feeling good and doing good.
JONATHAN HURVITZ: Absolutely Simon. Thanks for having me. I think that’s exactly right. I think that there’s more to it than just what the item is that the customer needs now. I think there’s a whole layered approach of what people look for. As an example I got an email, as I normally do from a brand that I follow, that was advertising ‘vegan sneakers’. Now they’re not going to be doing that if their customers don’t have that requirement. So people are looking for so much more than just a sneaker. It has to be very specific to their needs and I think that’s exactly what brands are doing. They’re listening more to their customers, and it’s completely layered now. It’s not like it used to be.
SIMON BROWN: And this is very much about brands. You mentioned sneakers. Recently my wife and I needed a pot, and it was an no-brainer. In the olden days, when it was my mother-in-law, it would’ve been an AMC, because they lasted forever if you could afford them. Now it’s Le Creuset, because they’re beautiful, it’s a company you almost feel a relationship with. And it’s almost a no-brainer. You go to the shop you buy it. You don’t have to spend all that time doing the research, because you’ve got that trust and faith in the brand.
JONATHAN HURVITZ: Absolutely. And I think that’s where big brands have really done so well, because they’ve created a loyalty that is underpinned by quality and after-sale service. With the exorbitant amount of choice that we have access to these days, people are happy to stick with what they know. It wasn’t like 40 years ago [when] everybody had the same TV, they had M-Net and they had the same cellphones.
[A lot of people] are working under the auspices of the fact that sometimes in the long run cheap is more expensive, so they’d rather buy up earlier, knowing it’s a better brand.
Now, when you are so spoiled for choice, you’ve got a far more discerning consumer that always will revert back to quality.
SIMON BROWN: You make a point there I hadn’t thought of. If I’d gone back 40 years I would’ve thought, well, there were brands but they weren’t putting the effort in. You make a great point. I remember buying a TV in the eighties; I think it was Telefunken. Maybe there was also Sharp. It’s the width these days, and those brands that have spent the last many decades crafting that experience.
JONATHAN HURVITZ: Absolutely. I think that’s where they’ve created that relationship with those consumers, and that’s what’s driving this brand loyalty. I think in this day and age now, because things aren’t made like they used to [be], the idea of generational wealth and hand-me-downs isn’t necessarily the order of the day as you are moving out of your house.
So people are far more aware of what they want, not just what their parents are prepared to give them. The only basis of comparison that you’ve got in terms of brands is how you grew up. So if your parents had a Samsung, maybe a Samsung’s for you.
I think that there are a lot more experimental purchasing practices for the youngsters as well, depending on the way that they are obviously buying these things.
There’s ‘buy now pay later’, there’s a whole host of various things that guys have access to now that we didn’t have 40 years ago.
SIMON BROWN: I suppose there is some testing and then at some point you settle [on] it. Maybe that testing happened in the family home, maybe it happened after you’d left. But you try it and then you kind of settle.
Does it benefit? I mean, 2022 has been a tough year for consumers – the petrol price, inflation, interest rates. We know the story. Does that then help these big brands as well? Because again I want that security of quality of product, of experience. I’m perhaps less inclined to go and try a new TV or a new pot.
JONATHAN HURVITZ: Agreed. I think people are making sure that they’re sticking with quality because it’s easier to buy what you know, and where these brands have spent so much time and effort is enablement and value-added services. A smaller brand may not have the clout with other services to bundle those things together.
So customers are realising ‘stick with what works’, and within that sort of paradigm guys are very happy to stick with the brands that they either grew up with, or they have grown to love and be loyal to.
SIMON BROWN: Then of course there’s subscription. This comes two ways. One is subscription as a service. I used to buy Adobe Photoshop for a vast amounts of money. Now, I think I pay $10 or $20 a month and I get the updates and everything. Of course, there’s Teljoy, which has been around forever and a day. Does this almost in a sense enhance that brand experience, and in particular when it’s a big-ticket item, a big household item or something where frankly maybe my wallet doesn’t stretch far enough?
JONATHAN HURVITZ: Absolutely. I think that access [rather than] ownership is so much more important, particularly in the younger generations. The macroeconomic factors, as you’ve mentioned, are building, and it’s becoming harder and harder to get the things that potentially you want from a cash perspective.
Subscription is becoming far more accepted as a way of consuming things, whether it’s a cellphone, whether it’s your TV, whether it’s your music, and it should be able to translate to your household appliances and furniture. It’s about access over ownership. I think long gone are the days where accumulation of things is a function of your wealth.
I think that people want more time and they want more experiences, which doesn’t necessarily equate to having a house full of things that you potentially have to pay up front [for].
SIMON BROWN: I like that – access over ownership. And it exactly fits into that idea about experiencing, living a life rather than owning things, which of course you ultimately leave behind. We can take it even a step further. A lot of that access might be long-term contracts. My Apple Music I pay every month, probably forever and a day. If I’m going camping, I don’t need to own a Campervan. I can go and rent one for the weekend.
JONATHAN HURVITZ: Absolutely. And that’s the beauty about subscription. Even in our environment, Teljoy people perceive us as this long-term contract. In Teljoy’s world you’re only ever 30 days from getting out of your agreement with us, and there’s no penalty attached to that. It is exactly the same as what a 30-day Apple Music or 30-day Netflix [contract] would be. Most of the time people know that they need it, and they’re going to stay for much longer.
SIMON BROWN: I hadn’t even thought of that. So if I go to Durban for a month, I can literally just get a TV supplied if I don’t like the one at my Airbnb.
We’ll leave it there. Jonathan Hurvitz, group CEO of Teljoy, I always appreciate the time and the insights.
Listen to the full MoneywebNOW podcast every weekday morning here.