It has been over a year since the Gautrain added bank cards as an additional payment option for their rides.
This payment method added convenience to the users, but there is a catch.
In this eNsight, I show how the Gautrain, originally dubbed the Shilowa Express, has not placed much emphasis on the database management of mostly regular users of its service, and thus missed an opportunity to leverage this new oil. Â
Back in 2017, The Economist published a story titled, "The world's most valuable resource is no longer oil, but data." Since its publication, the topic has generated a great deal of discussion, and "Data is the new oil" has become a common refrain.
Table of Contents
Inspiration for this eNsight
Thanks first to the many public transport options in and around Johannesburg city, and also due to COVID-19 lockdowns, I had not used the Gautrain for close to 2 years until December 2020.Â
While using South Africa’s only speed train in my last return trip between Marlboro and Park Station, I discovered that I can now use my bank card to pay for the rides. Â
I was pleased that I shall not need to stand in queues to load the Gautrain card with money before I can embark on any of my planned trips anymore, which is a welcome relief.
On this development, I give the Gautrain’s management thumbs-up.
However, I could not stop wondering how this additional payment method negatively affected the Gautrain’s ability to develop its own database?
My curiosity inspired this eNsight.Â
eNitiate's brief history with the Gautrain on a business level
In the last quarter of 2015 – 4 years since the start of the Gautrain service, eNitiate was invited to submit a proposal for a campaign for implementation in December of the same year, aimed at increasing traffic during this typically quiet period when offices and factories close for Christmas, resulting in exodus from Johannesburg by many of the city’s economic migrants like myself.Â
As part of research for our proposal, we discovered the following 2 key findings:Â
- The Gautrain did not capture the riders’ personal details when they buy, load and pay for rides with the dedicated card.
- Gautrain riders did not attach much value to the dedicated card, given its limited use and no associated rewards.
Informed by the 2 findings above, we recommended to the Gautrain that:
- There be personal details captured when riders buy and/or use the payment card.
- A loyalty reward system be introduced for frequent use. Â
- Additional uses for the card be introduced beyond paying for rides, to increase the value of the card to the users of this service.
We figured at the time that there is potentially high affinity that the users of this transport service have, and thus a form of database management can enhance marketing of the Gautrain using peer-to-peer influence, and can also assist in the running of campaigns such as for boosting rides during off-peak periods.
But it appeared that the Gautrain management did not have the appetite for our proposal, and that is where we left it.
The retail sector's focus on developing shopper databases provides clues about the value of the new oil
There is a lot the Gautrain can learn from database management trends in the retail sector.
Let me explain.
In the early 90’s, Makro – one of South Africa’s largest wholesale, and later also retail, groups – was one of the few brands with a loyalty programme, initially only for wholesale customers.
To have the Makro card during those years was like gold to bargain hunters as it gave access to in-store low prices and specials for bulk purchases.
But later the loyalty programme was extended to cover general retail customers, and the novelty took a bit of a knock.Â
In the early 90’s a loyalty programme was rare, judging by the number of wholesale and retail brands that had this feature as part of their customer service.
Side note
I used to wonder how Makro leverages the vast shopper database that it possesses beyond sending sales brochures.Â
I still do.
Big food retail brands have finally joined the database management bandwagon
Except for the Clicks group that followed with the launch of its loyalty programme in the mid-90’s, it took many years for the other big food retail brands to get on the bandwagon.
But they finally did, such as Pick n Pay’s Smart Shopper loyalty programme that was launched in March 2011.Â
My observations
All the big retail brands have added a loyalty programme to their operations, and it was not just for the heck of it.
To demonstrate.
You can’t pass a paypoint at any of the retail groups with a loyalty programme without a teller asking if you don’t have their card, and some even encouraging you to apply for one in order to earn loyalty rewards.
Clearly, the different retail loyalty programmes are used actively in the battle for consumers’ wallets.
In 2019 alone, R504 million was paid to ClubCard members in cashback rewards. Today, Clubcard has 8.4 million active members and has been independently rated as South Africa's leading loyalty programme.
Lessons, advantages and challenges for the Gautrain?
Developing a database is valuable for competitive advantage, and thus the sustenance of a brand.
Consumers are willing to suffer a little bit of inconvenience, if there is a perceived worthwhile reward in exchange.
Gautrain’s advantage is high repeat use by commuters who reside along its rail network. Thus, it can be argued that it has a captive market.
However, this transport mode has 2 shortcomings:
- The railway network has limited radius due to high infrastructure costs, and this results in limited reach to the commuter market despite complementary bus transportation that ferry them to and from the train stations dotting around the railway network.
- The Gautrain is not a cheap mode of transport for most commuters, especially on the OR Tambo International Airport route.
In addition, its pricing is not elastic.
The 2 shortcomings above imply that the Gautrain’s typical rider is urban and middle class.Â
Needless to say, this commuter has many options when it comes to transport, including the e-hailer transport that is easily accessible, competes favourably on price that is also highly elastic.Â
More about this in the next section.Â
My last Gautrain trip inspired the #soontobepublished eNsight, titled along the lines "they say data is the new oil, but...
Posted by Bra Willy on Thursday, January 21, 2021
Why I did not use Gautrain for 2 years before my end of December 2020 round trip?
The most lucrative route for the Gautrain is the airport trip.
Here below is the Gautrain online price calculator, which shows that the cost of a trip from Marlboro to OR Tambo is R175.
For me to get to the airport from my place of stay will take up to 2 hours during off-peak hours, and I have to add an e-hailer to take me to the the Gautrain rank, from where I catch a bus to the Marlboro station.Â
I’ll have you know that I stay in one of the most accessible parts of northern Johannesburg, and still…
Given the logistical nightmare and the associated high cost for this route, I might as well catch Bolt or Uber to take me to the airport directly, and save 1.5 hrs of my valuable time and money if I travel off-peak.
Way forward for Gautrain?
The case for Gautrain to focus on database management is clear.
On behalf of eNitiate, will the management take our advice this time around?Â
Your guess is as good as mine.
