By Nomzamo Radebe, CEO of Excellerate JHI
There can be no doubt that digital processes and technology will underpin future retail, but what does this really mean for local brands and companies? Arguably, the first step towards future-proofing retail is to understand what the customer of the future looks like.
Today, with endless information at their fingertips, consumers are well informed, demanding, and in a rush. And while many ‘gurus’ have foretold the death of the brick and mortar store, consumers continue to go to malls for both shopping and entertainment. Essentially, retailers and property development partners have to balance out contradictory messages and trends: are they preparing for a digitally driven environment with e-commerce at the centre? Or must retailers find a way to merge hyper-connected, digital habits with physical shopping experiences?
Seamlessly connected, 24/7
As of 2017, there were 3.4 billion global Internet users, which equates to 46% of the population, according to Euromonitor. By 2022, that figure will reach 58%. Along with more people becoming connected, more ‘things’ will become connected – with devices of all kinds constantly generating and sharing data. Yes, this is the Internet of Things (IoT), which will become fundamental to individual lives and purchasing habits. In homes, connected fridges will automatically send notifications when certain things are running low – and may even send a grocery list directly to the owner’s device.
For retailers, the rise of the Internet of Things and overall hyper connectivity means that consumers will be very specific in what they are looking for – and will demand that the retail experience deliver on their needs both seamlessly and instantaneously. Retailers will have to harness technology, including IoT, to create a ‘friction-free’ environment. For instance, the use of chatbots can make sure that when consumers are online they receive immediate and data-driven feedback or help.
Embracing cash-free living
With the enormous popularity of cash-free or cashless services such as Uber and Lyft, even credit and debit cards are beginning to look obsolete. Already, some analysts are forecasting the shift towards an entirely cashless society – and consumers are increasingly demonstrating their keenness to ditch cash. In South Africa, many are already leaving their wallets at home as smartphones become the new [digital] wallet. According to a study by PayPal, 85% of respondents used their mobile phones to make a purchase in 2017, and 46% said being able to shop on their mobile phones has made them buy more. Tellingly, the majority of South Africans would rather leave home without their wallets than leave home without their beloved device.
Conscious living, conscious shopping
With dramatic climate change now firmly on the global agenda, consumers are becoming increasingly aware of their environmental impact – which includes their shopping habits. According to research firm J. Walter Thompson Intelligence, ‘consumers expect brands to be sustainable and are willing to pay more to support those that are.’ In a 2018 study titled New Sustainability, the firm stated that 89% of those surveyed ‘care personally’ about protecting the planet; 92% said they are trying to live more sustainably, while 83% would always pick the brand that has a better record of sustainability.
With digital transformation now becoming a global business imperative, local retailers will have to ensure that their digital strategies closely reflect the evolving needs – and values – of their customers.