Retail news. Semester 1 of 2014 table of contents

Forecast shows shift to omni-channel purchasing. 17 Dec 2013

Adobe's Digital Index 2013 Online Shopping Forecast shows interesting shifts towards omni-channel purchasing - a trend in which retailers connect with customers on multiple physical and digital channel, often simultaneously.

This trend presents significant opportunities for South African retailers to deliver personalised and relevant cross-channel experiences that increase the value they provide to their customers which, in turn, increase loyalty and sales for their brand. Deploying the right technologies can maximise the advantages of every touch point and present customers with a seamless and personalised shopping experience

Trend forecast

Based on seven years of historical data and over 450 billion visits to more than 2000 retail websites, the report accurately forecasts festive season holiday shopping trends.

Among other trends, the index shows that in Europe, tablet shopping will grow by 60% year-on-year, and smartphone shopping by as much as 97% during this holiday season. Clearly, consumer spending continues its fast-paced migration from traditional physical channels, to online and mobile channels.

Considering South Africa's rising smartphone penetration rates (research group InMobi pegs this at 36% already), it is likely that local trends will follow a similar trajectory over the coming years. Recent Acentric Marketing Research suggests that about 1.2 million South Africans are now shopping online. Therefore, the scene is being set for a new era in retailing in South Africa.

New era in retail

Until now, digital sales channels have often been regarded as being in competition with a retailer's bricks-and-mortar outlets. The different channels have often been disjointed, such as presenting different special offers that are specific to each channel, for instance. Other retailers have been sluggish to invest in the digital touch points in general - preferring to rely on traditional feet in store.

However, for local retailers to defend and gain market share over the coming years, a new approach is required, where physical and virtual channels complement each other in an omni-channel environment.

Omni-channel describes the next wave of evolution from cross-channel and multi-channel, where various physical and virtual channels are seamlessly deployed together to create an enhanced, personalised experience at every step of the customer journey - from research, to enquiry, to purchasing and support.

It is more than simply opening up new customer touch points for one to interact with a brand. All channels are underpinned by the same technology architecture and CRM systems, as well as the same strategic vision, to provide consistency and the fluidity as a consumer moves from one channel to the next.

In fact, a successful omni-channel strategy effectively dissolves the borders between the channels to the point where the customer is less conscious of the particular channel he is using - as he or she is presented with a personalised, well-informed and efficient buying experience, wherever he or she might be.

Emerging technologies push trend

The trend to omni-channel marketing is being fuelled by evolving customer preferences and demands, as well as something of a "perfect storm" of emerging technologies - such as location-based services, smartphones and tablets, social media and big data.

In stores, various technologies and strategies can be deployed to augment the shopping experience and add value to the customer. These strategies maximise the advantages of the physical store for those high-touch, "human" interactions. Examples include free WiFi for customers, video demonstrations and offering discounts and innovative product bundles.

Globally retail stores are already using these strategies to improve the customer's retail experience.

UK retailer Marks & Spencer, for example, has implemented free in-store WiFi, interactive kiosks that allow customers to browse electronic catalogues, and tablets that are issued to staff on the floor - to improve the customer experience. Armed with roaming tablet or smartphone devices, in-store sales staff can tap into the central database of customer information - where profiles and preferences across channels are synched to create a full picture of a customer's entire history. Interactions are more informed, more personalised and therefore far more likely to result in a sale.

Click and collect

Considering that distribution costs and reliability is one of the biggest factors hampering the growth of eCommerce locally, the "come and collect" strategy may emerge as a very popular trend in South Africa - where the user researches, enquires and purchases via a digital channel and then drops in at the store to collect.

In the UK, this practice is already well established. eConsultancy says 40% of shoppers in the UK used 'click-and-collect' in the run up to Christmas 2012 - with retail group Halfords reporting an astonishing 86% via click-and-collect.

In many ways, consumers are already finding ways of connecting the virtual and the physical worlds. Interestingly, the Adobe research shows an increase in the trend known as "showrooming" in which customers examine merchandise in a physical store but then purchase online. Already 35% of 18 to 34 year olds leverage mobile devices to compare prices while in store.

The retailer that is best able to support this consumer behaviour, while defining effective strategies to embrace omni-channel, will be well placed in the new era of retail in South Africa.

Rush to trade in Zim. 10 Oct 2009 Jason Moyo

Big South African companies aren't shy about doing business with Zanu-PF and have not been spooked by the anti-Nestlé campaign, writes Jason Moyo.

Amid growing debate over the role of foreign multinationals in Zimbabwe, none of the large South African corporations in the country is considering withdrawing.

Old Mutual would not say whether it would hold on to a large investment in Zimpapers, the company that owns The Herald newspaper, a notoriously one-sided Zanu-PF mouthpiece.

Old Mutual is the second-largest shareholder in the newspaper group, after a government-controlled trust.

Old Mutual had not responded to questions sent by the Mail & Guardian at the time of going to press.

South African banks have provided financial support to Zim­babwean agriculture, most of which is now owned by Zanu-PF bigwigs and other beneficiaries of land grabs since 2000.

According to treasury statistics detailing financial institutions’ support for this year’s farming season, Nedbank’s Zimbabwe subsidiary, MBCA Bank, channelled lines of credit worth US$40-million to the Zimbabwe government for the purchase of farm inputs. Some of that lending also went towards funding the purchase of tobacco.

Stanbic, Standard Bank’s subsidiary, provided US$18-million to support cotton merchants this year.

It is not possible to find out how much of this funding reached resettled farmers. Nedbank did not immediately respond to queries sent to it.

This week banks in Zimbabwe said they would no longer lend to farmers sitting on seized land until they have legal title to the land. In response Mugabe said he would “speak to them” so that they accept as security for loans “offer letters”, which allow holders to forcibly take over farms.

Few foreign firms look ready to leave Zimbabwe. And, given the steady stream of South African business delegations arriving in Zimbabwe in recent weeks, more South African money is heading that way.

SABMiller has put an additional $16-million into Delta Beverages to expand its canning factory and meet growing beer demand.

Patrice Motsepe’s African Rainbow Minerals is investing $300-million in new coal and platinum projects in Zimbabwe, according to Dan Simelane, the company’s chief executive for exploration.

Motsepe led a delegation of South African businessmen that met Mugabe in Harare in April. That meeting was arranged by Business Unity South Africa, which encourages its members, some of the largest South African companies, to invest in Zimbabwe.

Nonkululeko Nyembezi-Heita, of ArcelorMittal South Africa, confirmed that Africa’s largest steelmaker is one of six foreign bidders for Zimbabwe’s state steel company Ziscosteel, which was run into the ground by a succession of scandals involving top government officials.

Mzi Khumalo’s Metallon Gold is seeking funding to restore its Zimbabwe operation. Its five mines accounted for more than half of the country’s total gold output before they were shut down last year after the reserve bank failed to pay for gold deliveries worth $20-million from the company.

At the height of the economic crisis in Zimbabwe, large retailers such as Pick n Pay and Edcon wrote off their Zimbabwean investments. But the retail chains are now sinking more money into the country.

Shoprite plans to buy into OK Zimbabwe, whereas Pick n Pay will maintain its 25% share of TM Supermarkets. Pep Stores also has a presence in Zimbabwe, through the Power Sales clothing chain.

Tongaat Hewlett is investing R145-million to restore its sugar estates in the south and east of the country. The estates have long been a centre of controversy, with the Zimbabwe government seeking to resettle thousands of small-scale farmers on the company’s Hippo Valley estates.

Zimbabwean rights groups have welcomed the international pressure that forced Nestlé to stop buying milk from a dairy farm run by Grace Mugabe. Yet, few would publicly back a campaign to pressure other multinational companies to withdraw from Zimbabwe.

Mugabe would use any such pressure to justify his repeated claims that Western sanctions are to blame for Zimbabwe’s economic collapse.

Although he has managed to convince his regional peers that Western measures against himself and his associates are the cause of the economic crisis, a senior United States diplomat in Harare this week restated the Western position that action against Mugabe’s rule has been specifically targeted.

Trade between Zimbabwe and the US has in fact doubled since the measures came into effect in 2003, according to James Garry, second secretary for economic affairs at the US embassy in Harare. Legislation bars US representatives in international financial institutions from authorising lending to Zimbabwe. But Garry insists these laws have never been used.

“While US sanctions may have harmed the business interests of some individuals, there is no evidence that they have had any negative macroeconomic impact on Zimbabwe,” said Garry.