Retail news. Semester 1 of 2014 table of contents

Challenge: engaging consumers across all channels. By: Steve Jones. 2 Apr 2013

The key challenge for businesses in 2013 will be how to develop and execute strategies that allow for meaningful and seamless cross-channel consumer engagement. In an 'always open, buy almost anything at any time, delivered (or collected) anywhere' market, local businesses are going to have to work hard to understand and deliver on the needs of their customers. This requires a movement away from the tendency in today's highly competitive market for businesses to look for growth by adding new products to their mix, adding more stores to their network or by spending more money on advertising campaigns.

The trouble is that these efforts are relatively 'easy' to execute and are often done in isolation, resulting in short-term growth spikes that do little to create value. It is much harder to re-evaluate the total brand offering and make meaningful changes that lead to sustainable and profitable growth.

Developing relationships

Retail in South Africa is experiencing a radical shift: the industry is evaluating and coming to terms with new channels because of the ever-changing expectations of more digitally empowered and global thinking consumers. The opportunity to develop more meaningful and loyal relationships with consumers can only be achieved with strategies that focus on designing better experiences and services accordingly, instead of the usual product, store or campaign-based activities.

When we learn the real meaning and value of life-long customer relationships, whether in store or online, we soon come to realise that the job of the organisation (and everyone in it) is not only to sell product, but also to appreciate how the customer journey and the store environment influence the transaction and the experience.

With as many as 8 million brands in the market, the transaction is now much more than the exchange of money for product. The factors of time, cost and anxiety need to be written into the equation to determine proper assessment of the experience. In restaurant terms, the food, the service and the ambience are the difference between a good, bad or amazing experience.

People strategies needed

When we understand this, the store is no longer just a place to purchase product, but rather becomes the product, and should be seen as an experience delivery centre. The measures of success will no longer be the traditional monthly foot traffic and sales, but be replaced by what percentage of customers made a purchase on any particular day.

A good marketing strategy, however, is not enough - and more often than not the missing piece is people, not technology. People strategies are needed to pull off a good experience: intelligent, trained, empowered people are the glue that holds the entire experience together. There is a real danger in this digital age to want to 'mechanise' the system. I have not yet met a device that can outplay a spirited, helpful and attentive store assistant or manager.

Edcon still struggling to grow market share. By: Zeenat Moorad. 28 Nov 2012

Edcon‚ the unlisted owner of clothing chains Edgars and Jet‚ on Tuesday said retail sales increased marginally by 2.4% to R5.5bn in the second quarter of financial year 2013‚ as it continued to trudge along and step up efficiencies in order to arrest market share declines to rivals.

The company‚ which also owns CNA‚ Red Square and Boardmans‚ made a loss of R592m in the three months to 29 September‚ from a loss of R1.18bn a year earlier.

Jürgen Schreiber‚ CEO of Edcon‚ said the quarter under review was a challenging one.

"But we are on the right track‚ which is the important thing. There's still a way for us to go; it's not a fixing from one corner to another‚" he said.

Revenue was at R5.8bn from R5.7bn in the same quarter last year. Trading profit slipped to R139m from R194m.

Simon Anderssen‚ equity analyst at Kagiso Asset Management‚ said Edcon's 2.4% year-on-year retail sales increase in the second quarter‚ showed that the group continued to lose market share to its listed competitors.

"Same-store sales growth of 0.8% highlights that the group is not yet seeing meaningful benefits from its strategic interventions‚" he said.

Local players such as Truworths‚ Woolworths and The Foschini Group have streamlined their fashion supply chain in the face of heightened competition as global players such as Zara and others expand in SA.

Edcon's Edgars division grew total retail sales by 4.9%‚ but on a like-for-like basis there was a 2.4% reduction in retail sales.

"We took a pretty tough stance on the winter markdowns. We really wanted to go for a good hard clearance strategy‚" Schreiber said.

The company is pushing hard to fix its Edgars business by revamping stores‚ and beefing up its merchandising as it turns its attention to "quick response" modern fashion. It is also adding more international brands to attract footfall.

The company entered into a partnership with local group The House of Busby and Britain's Arcadia Group to bring Topshop‚ known for its cheap‚ chic apparel to SA.

Edcon's discount division‚ which includes Jet and Legit‚ grew same store retail sales by 4.9%.

Abri du Plessis‚ CEO and chief analyst at Gryphon Asset Management‚ described Edcon's results as "disappointing".

"They're struggling to get it right. They have a huge debt load but that should not be affecting the way they're trading‚" he said.

Edcon‚ which was once known as the retail jewel of SA‚ has significantly underperformed its peers since its highly leveraged private equity buyout in 2007 by Bain Capital.

Five years on‚ the company is still saddled with debt: as at September 29‚ its debt was at R23.4bn‚ compared with R24.5bn on March 31.

It is expected that the R10bn injected since Absa took over Edcon's store card book in June will allow it to reduce debt.