Tag: retail

By Londiwe Buthelezi for Fin24

Even though the ongoing nationwide lockdown has sent many of its tenants’ operations on a tailspin, property giant Redefine says South Africa’s retail sector is showing a better recovery trajectory than markets like China where shoppers continue to stay away from shopping malls.

The owner of shopping centres such as the Centurion Mall and the East Rand Mall told journalists during the presentation of its interim results on Monday that while it expects demand for retail space to change as the coronavirus (Covid-19) and lockdown changed people’s way of doing things, South Africans are still showing love for malls.

Redefine Financial Director, Leon Kok said looking at photographs of the group’s shopping centres and malls taken over the past long weekend, they resembled a “normal weekend” with people visiting in droves, but still keeping the required level of social distancing.

Shoppers flock back to malls

“I can’t believe the numbers of people that were going to shopping centres… Surprisingly, I would say that in our centres, between 40% and 70% of the centres’ [shops] were open,” he said, but acknowledged that since restaurants and gyms will remain closed for the foreseeable future, this will affect foot traffic.

Richard Cheesman, senior analyst at Protea Capital Management said most people’s observation of shopping centre activity over the past weekend would probably correlate with what Redefine reported. But in the medium-term, as the current economic situation dampens consumer spending, Covid-19 will weigh on the local real estate industry as many other commentators have predicted.

“You would expect an initial bounce back after the lockdown. This may moderate going forward. Some areas are still not open such as entertainment and sit-down restaurants. Eventually the market should stabilise at a below average level,” he said.

Stanlib’s Head of Listed Property Funds, Keillen Ndlovu, said what set South Africa apart from other markets is that South Africans love to shop.
“We are a shopping nation and the malls opened (for Level 4 lockdown trading) at the beginning of the month after most people have just been paid. Most of all, we have low levels of online shopping at about 2% of total retail sales. So, people have to go out and shop,” he said.

In comparison, online shopping in China now accounts for over 30% of total retail sales compared to South Africa’s 2%, and even if people wanted to shop more online in the country, delivery of many items has not been allowed during the lockdown, he added.

But rental income will still be low

South African’s willingness to go out shopping again will be a welcome relief to landlords, as it could help convince their retail tenants to keep their rented space. However, Redefine said it still expects to grant more rental concessions to tenants or that some tenants will not make it at all.

The group’s Chief Operating Officer, David Rice, said rental discussions were taking place between Redefine and many of its tenants, as some were not happy about paying rates and taxes. Rice said the group also expects the vacancy rate in its office portfolio, which climbed to 12.3% in the six months to February, to continue rising.

Ndlovu said unfortunately property companies are going into these negotiations with tenants in a “tenants’ market”.

“Landlords have to do the best they can to nurse ailing tenants. It costs more to lose a tenant than to retain one, even at a lower rent. There’s no demand for vacant space at the moment. Even if there was, there’s an opportunity cost of missed rentals when the property is vacant,” he said.

Last week, the recently formed Property Industry Group announced the availability of industry-wide assistance and relief packages for all retail tenants during South Africa’s 35 days of lockdown.

While this will provide a much-needed stopgap for many tenants concerned about their operational viability post-lockdown, the announcement puts pressure on the various unlisted property groups, many which are not part of the Property Industry Group and were not consulted on the proposed packages, says Soria Hay, head of Corporate Finance at Bravura.

The Property Industry Group consists of the sector’s three biggest players, namely the South African Reit Association (SA REIT), the SA Property Owners Association (SAPOA) and the South African Council of Shopping Centres (SACSC), and is the mouthpiece for the South African commercial real estate sector.

The intention of the assistance and relief package initiative is to preserve the jobs of retailers, suppliers and service providers, with a qualifying criteria for tenants to ensure that no staff retrenchments are made during the relief period. Assistance and relief is to be at the discretion of the landlord, but the package stipulates the minimum that qualifying retailers can expect.

The package is to be made available for the periods of April and May 2020 and will provide basic assistance and relief as well as interest-free deferment recovery periods for SMMEs and tenants providing non-essential services. Relief can consist of rental reductions (between 35% to 100% for the first month and between 25% and 50% rental reduction for the second) or rental deferments.

The Property Industry Group acknowledges that the relief package comes at a high cost for the industry. Group spokesperson, Estienne de Klerk says that it is time for bigger and stronger companies to step up and form a buffer to protect smaller retailers so that the sector can collectively come out stronger.

Unlisted property groups and independent shopping centres are not part of the Property Industry Group collective. As such these industry players were not included in the consultation process that took place when obtaining buy-in for the proposed package. Yet the relief initiative undoubtedly sets an industry precedent which could see independent landlords and property groups challenged to provide similar relief to their own tenants.

Although the listed property sector has not been immune to the challenges experienced by the retail sector preceding lockdown (in fact it was named as the worst-performing asset class of 2019) there is arguably better liquidity and wiggle room here in which to provide tenant assistance than within their unlisted counterparts. Just recently leading REIT, Redefine Properties, which owns more than 300 retail properties across the country, said that it was in a position of strong liquidity with which to face off the lockdown, with access to R2.8 billion in committed undrawn credit facilities. This is certainly not the case for several thousand medium and small retail operations in South Africa.

Prior to lockdown, retailers were already experiencing the negative COVID-19 impacts. For example, in the short “stay at home” period leading up to the original 21-day lockdown, struggling retail group Edcon was hit with a 45% income loss and a reduction of about R400m in sales from flagship stores Edgars and Jet chains. The group anticipates a further R800m loss in sales over the lockdown period and a question mark remains over whether the group will be able to pick up operations once the lockdown is over. The ripple effect if Edcon folds will be felt throughout the sector – listed and unlisted.

The Property Industry Group has only stipulated the relief package for April and May, and it will be a different ball game should timeframes become longer. For the unlisted sector – and their tenants – with less concerted relief efforts available, the playing field may grow more uneven.

Forever 21 has filed for bankruptcy

By Cortney Moore for FOX Business

Forever 21 is about to start aging.

The iconic youth-focused fashion retailer announced to its customers on Monday that it indeed is filing for bankruptcy despite its attempts to quash rumors about the business development in a newsletter 10 days prior. Under the U.S. Bankruptcy Code’s chapter 11, Forever 21 will remain open while it “takes positive steps to reorganize the business.”

Up to 178 stores will close throughout the U.S.—which is sure to hurt thousands of employees who rely on the retailer for a source of income. Operations are also said to halt in 40 countries.

Forever 21 sent out a newsletter to customers on Sept. 20, telling them not to believe the “misinformed” bankruptcy rumors.

For some devoted shoppers, the announcement comes as a shock. However, a number of brick and mortar stores have struggled to keep money flowing with the rise of ecommerce juggernauts like Amazon providing the convenience of speedy shipping.

Fashion outlets that have shuttered a part of their business or have gone out of business completely include other notable mall staples like Payless, Kohl’s, Dressbarn, Topshop, Ralph Lauren, Lord & Taylor and more.

Forever 21, which was founded by Korean-born American husband and wife Do Won and Jin Sook Chang in 1981, grew to amass a network of over 800 stores while becoming multi-billion dollar company. Despite this, the trendy fashion chain that covertly imprints bible verses regarding everlasting life on its shopping bags, couldn’t be spared from what some have dubbed the “retail apocalypse.”

Here are five reasons that may have contributed to Forever 21’s downfall.

1. Rapid expansion

In Forever 21’s “About Us” section of their website, it acknowledged that it was the fifth largest specialty retailer in the U.S. and was aiming to “become an $8 billion company by 2017 and open 600 stores in the next three years.” However, just like with any other business that aggressively expands, there is sure to be a whole lot of debt that comes with it.

The company also revealed that the average size of a Forever 21 store is 38,000 square feet while the largest is 162,000 square feet. A market study that observed the average rent paid by square foot in the U.S. for industrial space found that businesses classified under “special purpose” paid $6.50 per square foot. If that figure holds true for today’s standards, a 38,000-square-foot Forever 21 would cost about $247,000 for rent alone. Similarly, a 162,000-square-foot location would cost an astounding $1,053,000.

2. Bad publicity
According to a report by the social media analysis website Sprout Social, nine out of ten customers will stop purchasing from brands that lack transparency. These findings are a detriment to Forever 21 since the company has been embroiled in back-to-back lawsuits for trademark and copyright infringement for years.

Whether from big household name designers to small indie brands, Forever 21 has made a knockoff version for customer purchase. Gucci, Adidas and Puma are just a few big dogs that have attempted a courtroom battle with Forever 21. Pop singer Ariana Grande has filed a $10 million lawsuit of her own over the value brand “stealing her” image and likeness.

3. Fast fashion and the competition
Forever 21 might be known for their quick-turning duplications, but they are not alone in the fast fashion world. Competitors such as H&M and Zara have vied for the same consumer base that wants trendy clothing at an affordable or low-cost price point. Popular London-based ecommerce brands like ASOS and Pretty Little Thing have also taken a swipe at profits with their lucrative celebrity collaborations.

The Instagram famous Los Angeles-based brand Fashion Nova has also given Forever 21 a run for its money with shameless knockoff business strategy that churns out replicated designs in less than 24 hours.

4. Shifting consumers
Conversely, there is a buying base that opposes everything fast fashion stands for. These shoppers are generally concerned for the environment, whether it be through minimizing fabric waste or not supporting an industry that has brought on harsh working conditions. This desire for sustainable fair trade has allowed the secondhand clothing market to grow to an estimated $28 billion worldwide, according to a consumer survey from analytics aggregator Statista.

The call for body positivity in the fashion industry has also impacted Forever 21 despite the store having a dedicated plus size and curvy sections in U.S. stores. Outside the small pickings these departments have, Forever 21 highlights its ultra-thin models more frequently—which may have alienated its full-figured base that is said to have a buying power of about $46.4-billion according to business management consultants at Coresight Research.

Forever 21’s shipping of free diet bars over the summer also didn’t help the brand’s image.

5. Unfocused inventory
Although majority of Forever 21 stores offer various selections, the brand appears to have extended its reach too far. With its other lines like XXI Forever, For Love 21 and Heritage 1981, the retail store has carried a mixed bag of styles that are both overwhelming and in conflict with shoppers’ inner Marie Kondo call for minimalism.

The store has also dabbled in creating a home décor, tech accessory and cosmetics line that is cheap in price but lacking in durability. Forever 21’s sister brand, Riley Rose, which sells third-party beauty products never took off the way the company hoped. Even top beauty retailer Ulta is struggling with a shifting market that prizes skincare over makeup.

A January report in Business of Fashion said Forever 21 had its sights on doubling the number of Riley Rose stores. That doesn’t appear to be happening while the business reorganises its strategy under bankruptcy.

The role of mobile technology in retail

By Sandra Wrobel-Konior for Business2Community 

Technology is changing the way most industries do business, and retail is no exception to the ever-evolving advancements. Although some are afraid technology may be hurting the retail industry by moving everything online.

If you take a more in-depth look into the situation, you’ll see that tech is actually helping retail stores to grow and expand their expertise. There’s a number of new technology systems that are being implemented, and are worth consideration to remain a top competitor in the heavily competitive retail market.

Connecting with your shopper
According to a study conducted by CMO, 54 percent of retailers put customer experience in the number one slot on their priority list.

Beacon technology made its presence felt in the retail industry in 2017 for this reason. They are small devices placed at the front of the store and throughout to allow interaction with customers as soon as they walk through the door. They connect and send a signal to a customer’s Bluetooth capable device, and send highly accurate, relevant information and in-store offers in real-time to create a greater personal shopping experience for the customer.

A study done by Swirl states that 70% of shoppers who received beacon-related content on their phones agreed it increased their likelihood of making a purchase, showing impressive sales results for companies. These small devices are similar to online shopping apps, which allow customers to digitally connect to in-store deals conveniently from their mobile device to plan their shopping experience around real-time in-store offers as they shop.

The online consumer is looking for a great deal just as much as the in-store consumer, and it’s important to provide both with a superior experience.

Retailers also often turn to online checkout tools to help streamline the online shopping experience for consumers. With online shopping becoming the main avenue for all forms of shopping, it’s important for merchants to have a safe and secure checkout system for their online customers.

Modern systems create an efficient transaction process done entirely on the product page. It is hassle-free and user-friendly (recognising various languages), and does not push customers to a third-party site or payment service.

This approach also makes it convenient for consumers to order right from their mobile devices and provides a higher level of security; an important feature in the digital age.

Sensing your customer
74 percent of firms want their operations to be data-driven, but seldom follow through, with only 29 percent applying analytics to their internal processes. If implemented properly, consumer analytics tools could improve this statistic. They prove to be a major asset for merchants to track customer behaviours and better understand relevant trends.

These tools use a sensor that recognises and tracks the number of customers that come into a store, and narrows that data by month, week, or day to give a short-term insight into foot-traffic.

Other kinds of technology within the realm of these complex tools include the ability to track online orders to measure which items are in demand, and which items can be eliminated from the stores’ stock costs. By 2021, 85 percent of retailers plan to use intelligent automation like this to further improve their supply chain plan and eliminate increased costs.

Keeping it together with tech-driven organisational tools
The Internet of Things (IoT) has created an important opportunity for retailers to integrate a major type of technology into their operational strategy. All smart devices are connected thanks to the IoT, so the integration of the online retail shopping experience is a viable strategy for companies to capitalise on a broad connection to consumers.

For example, the IoT enables a shopper to scan or search for a product to be connected to the detailed information provided by the merchant about that product. The consumer then has access to relevant reviews and feedback for the specific product to help make more informed buying decisions.

In the long run, this helps increase sales and consumer retention, by providing shoppers with helpful services and information, thereby improving their buying experience.

Tech-driven internal organisational tools also make an impact on customer experience by starting at the source and improving internal retailer functions. Resource planning cloud systems that automate manual tasks help companies zero in on the strategic initiatives that propel the business forward. They also organise financial operations and leverage real-time consumer-related data for insights that improve decision-making and performance management.

Having strong internal operations rely heavily on tech-driven tools to meet customer demands and remain future-proof, especially in the modern digital age.

Takeaways
Depending on the type of store you operate, different technological tools may be more worthwhile than others. What matters is establishing a brand that customers can connect with.

In this day and age of social media and the internet, simple tech-driven strategies can help consumers to feel connected to a brand online, prolonging company success.

Below is a summary of what we covered and how technology plays a role in retail:

  • Customer experience should always be a top priority in the retail space.
  • Technology-driven tools improve buyer experience and increase efficiency.
  • Technological advancements in retail are lucrative to future growth in the digital age.
  • Internal operations need to be streamlined in order to reflect positively on customer experience.
  • The utilization of consumer data can have a major impact on a company’s success.
  • Consumer data-driven strategies rely on tech tools to ensure relevance and accuracy before the implementation of new strategies.

By Josh Hall for Prolific London

Retail sales rose by just 0.3 per cent in July, their lowest level since records began.

The figure was down significantly on the 1.6 per cent increase seen in the same month in 2018, and follows what was also the worst June on record.

The survey, conducted by the British Retail Consortium and KPMG, are based on responses from retailers making up an estimated 40 per cent of all British retail sales. Their records began in 1995.

According to the Consortium, “the combination of slow wage growth and Brexit uncertainty” are to blame for the collapse.

But the group also said that last year’s figures had been inflated by the World Cup.

KPMG head of retail Paul Martin said: “Shoppers are notably disengaged overall. The pressure continues to build between online and physical offerings, costs continue to rise and the demands of consumers continue to grow.”

Meanwhile as we reported yesterday the UK service sector recorded a slight and unexpected growth during July.

The performance put it out of kilter with other UK sectors, in which the outlook remains gloomy.

Online shopping has become increasingly popular amongst South African consumers. Convenience, competitive pricing, and a wide choice of products make online purchasing a no-brainer for tech-savvy shoppers, but retailers need to stay ahead of the curve when it comes to standing out against the competition.

Over the past year, a couple of popular South African retailers’ pricing has come under scrutiny where products were advertised as discounted from inflated list prices to give customers the perception of a bigger saving. In both cases, the advertising was ruled to be misleading. While unscrupulous practices like this may get consumers all riled up, the benefit of these kinds of cases being brought to the fore is that consumers have become more discerning when it comes to finding a bargain online.

Comparison tools and aggregator sites take the hard work out of shopping around and comparing prices. According to PriceCheck Founder, Kevin Tucker, comparison tools are just as important to retailers as they are to consumers. “Retailers are able to monitor price changes, price drops, promotions from competitors to allow them to stay relevant.” With more than two million visits each month, PriceCheck is South Africa’s number one product discovery and comparison platform.

Online purchasing behaviour indicates that consumers tend to go for trust over price point, particularly in the case of lesser known and international retailers. Consumers would rather pay a little bit extra at a reputable retailer than find a great bargain only to have to wait longer for delivery time, experience delays, or deal with poor customer service and a sketchy returns policy.

For this reason, comparison tools have become an invaluable tool for discerning shoppers, helping customers make informed decisions about their online purchases. Consumers love a good bargain, especially in tough economic times, and daily deals, sales and discounts create a sense of urgency and encourage impulse purchase behaviour. By listing retailers that offer a benefit to consumers, especially those that don’t have the financial backing of the big players in the e-commerce space, comparison tools add value to consumers while at the same time sending the listed retailers good quality traffic and qualified leads.

While building trust with consumers goes beyond fair and competitive product pricing, retailers need to consider the customer journey from start to finish. Tucker advises retailers to invest in online support through live chats or chatbots. “Real-time support can go a long way with consumers.”

He believes that providing as much information for the consumer to review is essential for retailers to maintain their credibility. “Delivery and returns policies, shop reviews, and payment methods all need to be clearly indicated to manage expectations and ensure that consumers are able to make the best buying decision possible.” he says.

By Deborah Williams for Retail Insight 

June 2019 UK retail sales have been the worst on record, with a 1.3% total basis decline, according to a report by the British Retail Consortium (BRC). June UK retail sales saw a 2.3% increase in 2018.

Covering the five weeks from 26 May to 29 June 2019, the report found that the decline brings the three month average into a decline of 0.1% and the 12 month average to an increase of 0.6%, the lowest since its records began in December 1995.

BRC chief executive Helen Dickinson OBE said: “June sales could not compete with last year’s scorching weather and World Cup, leading to the worst June on record. Sales of TVs, garden furniture and BBQs were all down, with fewer impulse purchases being made. Overall, the picture is bleak. Rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.

“Businesses and the public desperately need clarity on Britain’s future relationship with the EU. The continued risk of a No Deal Brexit is harming consumer confidence and forcing retailers to spend hundreds of millions of pounds putting in place mitigations – this represents time and resources that would be better spent improving customer experience and prices. It is vital that the next Prime Minister can find a solution that avoids a No Deal Brexit on 31st October, just before the busy Black Friday and Christmas periods.”

On a like-for-like basis, June UK retail sales decreased by 1.6% from June 2018. This is lower than the three month and 12 month averages of -0.4% and -0.1% respectively. The report stated that this represents the worst 12 month average since April 2012.

In-store sales of non-food items declined 4.3% on a total basis and 4.1% on a like-for-like basis, over the three months to June. This decline is lower than the 12 month total average decline of 2.8%.

Non-food UK retail sales declined by 2.1% on a total basis and 2% on a like-for-like basis, over the three-months to June. This is also lower than the 12 month total average decrease of 0.8%. The BRC said that this is the worst quarterly decline since February 2009.

KPMG UK head of retail Paul Martin says: “There are few places retailers can hide from the difficult trading conditions that have been hitting the industry for some time. June’s retail performance did little to ease that, with like-for-like sales falling 1.6% compared to last year.

“On the high street, consumers were eager to pull up a pew for the summer’s sporting events, with added interest in the furniture category. Otherwise, consumers largely turned a blind eye to offers in the physical retail space.”

Non-food online sales increased 4% in June 2019, against an increase of 8.5% in June 2018. The three month and 12 month average growths were 3.3% and 5% respectively. Non-food online penetration rate increased to 30.7% last month, from 28.5% in June 2018.

Martin adds: “With 4% online growth, shoppers were thankfully more engaged in this channel, making the most of the added convenience and continued aggressive pricing. Fashion performed particularly well thanks to end-of-season sales and upcoming holidays.

“Pressure on retailers continues to mount and is seemingly coming from all angles: economic, geo-political, environmental and behavioural. Consumer spend is only likely to fall further as things stand, and cost efficiency remains vital. The focus for most in the industry will be preservation and adaptation in order to see them through these tough times.”

Food sales experiences ‘above total average growth’ for June 2019 UK retail sales
Over the three months to June, food sales increased 2.4% on a total basis and 1.5% on a like-for-like basis – an increase above the 12 month total average growth of 2.2%.

IGD CEO Susan Barratt said: “A late start to the summer weather in June compared unfavourably with consistently drier and warmer conditions in 2018, so while year-on-year growth in food and grocery sales last month was small, it is still encouraging.

“If the recent pick up in temperatures is sustained, there’s hope for stronger figures in July. Shoppers feel slightly more positive at the moment, with the percentage expecting to become worse off financially in the year ahead falling from 32% in February to 27% today.”

By Alistair Anderson for BusinessLive

Edcon is a large employer, with 40,000 staff, while its operations also affect numerous suppliers and 100,000 workers indirectly.

Edcon has been battling to save jobs following some poor strategic decisions and mounting competition from newer retailers who have eaten into its market share over the past decade. In the past few weeks, it managed to sign a rental savings deal with a fifth of its landlords so that CEO Grant Pattison could implement a turnaround plan. This plan includes selling or closing underperforming businesses and flattening management structures.

Read more here: https://www.businesslive.co.za/bd/companies/retail-and-consumer/2019-04-14-how-edcons-survival-will-avert-retail-apocalypse/

By Lisa Du and Ayaka Maki for Bloomberg/Fin24

It’s watching, and knows a crime is about to take place before it happens.

Vaak, a Japanese startup, has developed artificial intelligence software that hunts for potential shoplifters, using footage from security cameras for fidgeting, restlessness and other potentially suspicious body language.

While AI is usually envisioned as a smart personal assistant or self-driving car, it turns out the technology is pretty good at spotting nefarious behaviour. Like a scene out of the movie “Minority Report,” algorithms analyse security-camera footage and alert staff about potential thieves via a smartphone app.

The goal is prevention; if the target is approached and asked if they need help, there’s a good chance the theft never happens.

Vaak made headlines last year when it helped to nab a shoplifter at a convenience store in Yokohama. Vaak had set up its software in the shop as a test case, which picked up on previously undetected shoplifting activity. The perpetrator was arrested a few days later.

“I thought then, ‘Ah, at last!’” said Vaak founder Ryo Tanaka, 30. “We took an important step closer to a society where crime can be prevented with AI.”

Shoplifting cost the global retail industry about $34bn in lost sales in 2017 – the biggest source of shrinkage, according to a report from Tyco Retail Solutions. While that amounts to approximately 2% of revenue, it can make a huge difference in an industry known for razor-thin margins.

The opportunity is huge. Retailers are projected to invest $200bn in new technology this year, according to Gartner, as they become more open to embracing technology to meet consumer needs, as well as improve bottom lines.

“If we go into many retailers whether in the US or UK, there are very often going to be CCTV cameras or some form of cameras within the store operation,” said Thomas O’Connor, a retail analyst at Gartner. “That’s being leveraged by linking it to an analytics tool, which can then do the actual analysis in a more efficient and effective way.”

Because it involves security, retailers have asked AI-software suppliers such as Vaak and London-based Third Eye not to disclose their use of the anti-shoplifting systems. It’s safe to assume, however, that several big-name store chains in Japan have deployed the technology in some form or another.

READ: Amazon facial AI matched politicians with criminals in test
Vaak has met with or been approached by the biggest publicly traded convenience-store and drugstore chains in Japan, according to Tanaka.

Big retailers have already been adopting AI technology to help them do business. Apart from inventory management, delivery optimisation and other enterprise needs, AI algorithms run customer-support chatbots on websites. Image and video analysis is also being deployed, such as Amazon.com’s Echo Look, which gives users fashion advice.

“We’re still just discovering all the market potential,” Tanaka said. “We want to keep expanding the scope of the company.”

Founded in 2017, Vaak is currently testing in a few dozen stores in the Tokyo area. The company began selling a market-ready version of its shoplifting-detection software this month, and is aiming to be in 100 000 stores across Japan in three years. It has ¥50m ($450 000) in funding from SoftBank Group’s AI fund, and is in the middle of its series A round, seeking to raise ¥1bn.

What makes AI-based shoplifting detection a straightforward proposition is the fact that most of the hardware – security cameras – is usually already in place.

READ: Microsoft seeks to restrict abuse of its facial recognition AI
“Essentially this is using something that’s been underutilised for decades,” said Vera Merkatz, business development manager at Third Eye. Founded in 2016, the startup offers services similar to Vaak in the UK market, where it has a deal with a major grocery chain. Third Eye is looking to expand into Europe.

The ability to detect and analyse unusual human behaviour also has other applications. Vaak is developing a video-based self-checkout system, and wants to use the videos to collect information on how consumers interact with items in the store to help shops display products more effectively.

Beyond retail, Tanaka envisions using the video software in public spaces and train platforms to detect suspicious behavior or suicide jumpers. At Third Eye, Merkatz said she’s been approached by security management companies looking to leverage their AI technology.

“The potential is broad since it can be applied outside of shoplifting prevention and outside of retail — such as with manufacturing or other types of marketing,” said Hiroaki Ando, a retail consultant at Ernst & Young Advisory & Consulting in Tokyo.

Shoprite records gloomy Christmas sales

By Robert Laing for Business Live 

Shoprite’s share price fell as much as 5.7% to R175.32 after it warned shareholders its interim results would show flat sales.

Joining the queue of JSE-listed retailers reporting disappointing Christmas sales, Shoprite said its total group sales declined 0.3% in the December quarter, the second of its financial year.

The drop in sales in December quarter followed just 0.42% growth in the September quarter, which Shoprite blamed on teething glitches in a new Gauteng distribution centre and strikes.

Shoprite is scheduled to release its interim results on February 26.

“Liquor stores remain a standout performer with 20.09% sales growth for the period,” CEO Pieter Engelbrecht said in Tuesday’s operating update.

“The group’s core business, Supermarkets RSA, achieved 2.58% sales growth for the period. Persistently low internal food inflation in SA of only 0.2% for the period marks 18 months of near stagnant prices of basic foods in which the group has a larger market share,” Engelbrecht said.

“The core Shoprite middle income consumer base remains under pressure. This was evidenced in Christmas sales in categories such as back-to-school essentials, which outperformed traditional discretionary purchases such as toys for the first time.”

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