Tag: retail

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.”

By Suman Bhattacharyya for Digiday 

As a growing number of people go to Amazon to buy office supplies, Office Depot is trying to find another use for its nearly 1 400 physical stores. One it’s testing: Transforming them into co-working spaces.

The company is testing the concept through a Los Gatos, California-based “Workonomy Hub” it opened in August. Inside it, a 5 000 square-foot co-working space includes open “hot desks”, closed offices, a lounge with a Starbucks kiosk, and an online-order pickup and shipping area. It’s an effort to repurpose empty store space as a co-working and business-service hub — and a place businesses can learn about and take advantage of consulting services that cover marketing, business development and staffing.

“The traditional retail model is highly focused on convenience, and making one sale today; we have that as a component of our business, but we want that longer-term relationship with the customer,” said Kevin Moffitt, chief retail officer at Office Depot.”[Small-business] customers are already coming to us for marketing services, print services and tech services, and for us, it’s a natural adjacency to the products and services we already offer.”

The repurposing of vacant retail space for service and co-working offerings is a trend across the industry. Malls are opening up unused space to shared workspace providers and startup incubation programs. Meanwhile, traditional retailers are redesigning store spaces as service hubs. For example, Staples last year partnered with co-working startup Workbar to roll out co-working spaces with happy hours and slick modern designs.

The trend is also going another way, with industry heavyweights like WeWork adding ancillary services to support small businesses, including, most recently, ad agency-style marketing services.

Office Depot, which has seen services as a portion of its Business Services Division revenue grow 28 percent year over year, sees co-working spaces as a customer acquisition channel for its services offerings. It’s using its connections with community groups, along with its capacities to advise businesses on both strategy, as well as tech, as differentiators against businesses wholly dedicated to co-working.

“Our approach is that it’s everything you need under a single roof with support from dedicated specialists and associates,” Moffitt said.

Office Depot declined to comment on whether the Los Gatos Workonomy Hub is profitable, but the company said it’s considering other markets in which co-working spaces would meet demand. The company’s CEO Gerry Smith, however, recently told investors early results from the co-working space are encouraging, driving higher sales for services and products compared to the average store.

To help meet the demand for service offerings, Moffitt said Office Depot has access to thousands of trained service staff the company inherited from its CompuCom acquisition last year. Despite the fact that consulting staff can be expensive, he said Office Depot is making a longer-term play for customer loyalty, which can be underpinned through connections made at co-working hubs.

To industry watchers, Office Depot’s foray into co-working is illustrative of the growing demand for shared office spaces as gig economy workers seek flexible workspace in crowded, expensive metropolitan areas. Charlie Robinson, svp for the U.S. at Servcorp, a global provider for shared office space, said for shared workspace providers, the landlord model isn’t enough of a longer-term strategy for sustainability.

“You don’t want to only be in the rent arbitrage game — over 50 percent of our revenues come from other services,” he said.

By Mark Bergen and Jennifer Surane for Bloomberg / Fin24 

For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the US. That insight came thanks in part to a stockpile of Mastercard transactions that Google paid for.

But most of the two billion Mastercard holders aren’t aware of this behind-the-scenes tracking. That’s because the companies never told the public about the arrangement.

Google and Mastercard brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly.

The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant’s strategy to fortify its primary business against onslaughts from Amazon.com and others.

But the deal, which has not been previously reported, could raise broader privacy concerns about how much consumer data technology companies like Google quietly absorb.

“People don’t expect what they buy physically in a store to be linked to what they are buying online,” said Christine Bannan, counsel with the advocacy group Electronic Privacy Information Center (EPIC).

“There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.”

Google paid Mastercard millions of dollars for the data, according to two people who worked on the deal, and the companies discussed sharing a portion of the ad revenue, according to one of the people. The people asked not to be identified discussing private matters.

A spokesperson for Google said there was no revenue sharing agreement with its partners.

A Google spokesperson declined to comment on the partnership with Mastercard but addressed the ads tool. “Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the company said in a statement.

“We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.” The company said people can opt out of ad tracking using Google’s “Web and App Activity” online console.

Inside Google, multiple people raised objections that the service did not have a more obvious way for cardholders to opt out of the tracking, one of the people said.

Seth Eisen, a Mastercard spokesperson, also declined to comment specifically on Google. But he said Mastercard shares transaction trends with merchants and their service providers to help them measure “the effectiveness of their advertising campaigns.” The information, which includes sales volumes and average size of the purchase, is shared only with permission of the merchants, Eisen added. “No individual transaction or personal data is provided,” he said in a statement.

“We do not provide insights that track, serve up ads to, or even measure ad effectiveness relating to, individual consumers.”

Last year, when Google announced the service, called “Store Sales Measurement,” the company just said it had access to “approximately 70%” of US credit and debit cards through partners, without naming them.

More possible deals

That 70% could mean that the company has deals with other credit card companies, totalling 70% of the people who use credit and debit cards. Or it could mean that the company has deals with companies that include all card users, and 70% of those are logged into Google accounts like Gmail when they click on a Google search ad.

Google has approached other payment companies about the program, according to two people familiar with the conversations, but it is not clear if they finalised similar deals. The people asked to not be identified because they were not authorised to speak about the matter.

Google confirmed that the service only applies to people who are logged in to one of its accounts and have not opted out of ad tracking. Purchases made on Mastercard-branded cards accounted for around a quarter of US volumes last year, according to the Nilson Report, a financial research firm.

Through this test programme, Google can anonymously match these existing user profiles to purchases made in physical stores. The result is powerful: Google knows that people clicked on ads and can now tell advertisers that this activity led to actual store sales.

Google is testing the data service with a “small group” of advertisers in the US, according to a spokesperson. With it, marketers see aggregate sales figures and estimates of how many they can attribute to Google ads – but they don’t see a shoppers’ personal information, how much they spend or what exactly they buy.

The tests are only available for retailers, not the companies that make the items sold inside stores, the spokesperson said. The service only applies to its search and shopping ads, she said.

For Google, the Mastercard deal fits into a broad effort to net more retail spending. Advertisers spend lavishly on Google to glean valuable insight into the link between digital ads a website visit or an online purchase.

It’s harder to tell how ads influence offline behaviour. That’s a particular frustration for companies marketing items like apparel or home goods, which people will often research online but walk into actual stores to buy.

That gap created a demand for Google to find ways for its biggest customers to gauge offline sales, and then connect them to the promotions they run on Google.

“Google needs to tie that activity back to a click,” said Joseph McConellogue, head of online retail for the ad agency Reprise Digital. “Most advertisers are champing at the bit for this kind of integration.”

Initially, Google devised its own solution, a mobile payments service first called Google Wallet. Part of the original goal was to tie clicks on ads to purchases in physical stores, according to someone who worked on the product.

But adoption never took off, so Google began looking for allies. A spokesperson said its payments service was never used for ads measurement.

So Google added more …

Since 2014, Google has flagged for advertisers when someone who clicked an ad visits a physical store, using the Location History feature in Google Maps. Still, the advertiser didn’t know if the shopper made a purchase. So, Google added more. A tool, introduced the following year, let advertisers upload email addresses of customers they’ve collected into Google’s ad-buying system, which then encrypted them.

Additionally, Google layered on inputs from third-party data brokers, such as Experian and Acxiom, which draw in demographic and financial information for marketers.

But those tactics didn’t always translate to more ad spending. Retail outlets weren’t able to connect the emails easily to their ads. And the information they received from data brokers about sales was imprecise or too late.

Marketing executives didn’t adopt these location tools en masse, said Christina Malcolm, director at the digital ad agency iProspect. “It didn’t give them what they needed to go back to their bosses and tell them, ‘We’re hitting our numbers,’” she said.

Then Google brought in card data. In May 2017, the company introduced “Store Sales Measurement.” It had two components. The first lets companies with personal information on consumers, like encrypted email addresses, upload those into Google’s system and synchronise ad buys with offline sales. The second injects card data.

It works like this: a person searches for “red lipstick” on Google, clicks on an ad, surfs the web but doesn’t buy anything. Later, she walks into a store and buys red lipstick with her Mastercard.

The advertiser who ran the ad is fed a report from Google, listing the sale along with other transactions in a column that reads “Offline Revenue” – only if the web surfer is logged into a Google account online and made the purchase within 30 days of clicking the ad. The advertisers are given a bulk report with the percentage of shoppers who clicked or viewed an ad then made a relevant purchase.

Most powerful tool

It’s not an exact match, but it’s the most powerful tool Google, the world’s largest ad seller, has offered for shopping in the real world. Marketers once had a patchwork of consumer data in their hands to triangulate who saw their ads and who was prompted to spend. Now they had far more clarity.

Google’s ad chief, Sridhar Ramaswamy, introduced the product in a blog post, writing that advertisers using it would have “no time-consuming setup or costly integrations.” Missing from the blog post was the arrangement with Mastercard.

Early signs indicate that the deal has been a boon for Google. The new feature also plugs transaction data into advertiser systems as soon as they occur, fixing the lag that existed previously and letting Google slot in better-performing ads.

Malcolm said her agency has tested the card measurement tool with a major advertiser, which she declined to name. Beforehand, the company received $5.70 in revenue for every dollar spent on marketing in the ad campaign with Google, according to an iProspect analysis. With the new transaction feature, the return nearly doubled to $10.60.

“That’s really powerful,” Malcolm said. “And it was a really good way to invest more in Google, frankly.”

But some privacy critics derided the tool as opaque. EPIC submitted a complaint about the sales measuring tack to the US Federal Trade Commission last year. A report in August that Facebook Inc. was talking with banks about accessing information for consumer service products sparked similar criticism. For years, Facebook and Google have worked to link their massive troves of user behaviour with consumer financial data.

And financial companies have plotted ways to tap into the bounty of digital advertising. The Google tie-up isn’t Mastercard’s only stab at minting the data it collects from customers. The company has built out its data and analytics capabilities in recent years through its consulting arm, Mastercard Advisors, and gives advertisers and merchants the ability to forecast consumer behaviour based on cardholder data.

Ad buyers that work with Google insist that the company is careful to maintain the walls between transaction information and web behaviour, keeping any info flowing to retailers and marketers anonymous. “Google is really strict about that,” said Malcolm.

Before launching the product, Google developed a novel encryption method, according to Jules Polonetsky, head of the Future Privacy Forum, who was briefed by Google on the product. He explained that the system ensures that neither Google nor its payments partners have access to the data that each collect.

“They’re sharing data that has been so transformed that, if put in the public, no party could do anything with it,” Polonetsky said. “It doesn’t create a privacy risk.”

Future Privacy Forum, a non-profit, receives funding from 160 companies including Google.

Google’s ad business, which hit $95.4bn in 2017 sales, has maintained an astounding growth rate of about 20% a year. But investors have worried how long that can last. Many major advertisers are starting to funnel more spending to rival Amazon, the company that hosts far more, and more granular, data on online shopping.

In response, Google has continued to push deeper into offline measurements. The company, like Facebook and Twitter, has explored the use of “beacons,” Bluetooth devices that track when shoppers enter stores.

Some ad agencies have actively talked to Google about even more ways to better size up offline behaviours. They have discussed adding features into the ads system such as what time of day people buy items and how much they spend, said John Malysiak, who runs search marketing for the Omnicom agency OMD USA.

“We’re trying to go deeper with Google,” he said. “We’d like to understand more.” Google declined to comment on the discussions.

How shopping is changing in a digital world

Shopping: love it or loathe it, a wave of innovation is heading this way – and it promises to make a visit to your local mall a far more productive and pleasant experience.

Deloitte is at the forefront of this trend with the creation of a Connected Retail Experience at its Deloitte Greenhouse innovation hub in Cape Town.

Shorter queues at checkout, a much better selection of goods, personalised, relevant special offers and the ability to have out-of-stock items delivered to your door within 24 hours. These are just a sample of the innovations coming to the South African retail sector that promise to make your shopping experience a whole lot more enjoyable and engaging.

That’s according to Corniel van Niekerk, senior manager at Deloitte, the professional services firm which is emerging as one of the key players bringing what’s known as ‘Connected Retail’ to South Africa.

“It’s an exciting time for consumers and retailers alike. Connected Retail technologies will not only make for a vastly improved shopping experience for customers, but retailers and suppliers who embrace and implement them effectively will see a significant boost to their bottom line. In this sense it’s a genuine win-win situation,” says Corniel.

So how could such a Connected Retail experience play out for you as a shopper? It may begin well before a visit to the store with an email, instant message or app notification about a product you’re actually interested in, rather than annoying spam about stuff with no relevance to you.

You may, for example, have a dinner party coming up at the weekend and get a discount voucher on a hard-to-find ingredient for that recipe you bookmarked in the store’s smartphone app last week which has now come into season and just arrived at the store.

Once you go to the store, the personalised experience continues. After you put the ingredients for that recipe into your basket and approach the wine section, you get a notification alerting you to a Pinot Noir that’s not only on promotion but will pair perfectly with the wild mushroom risotto you’ve planning to serve your guests.

Another innovation called ‘endless aisles’ will allow you to buy items currently out of stock or not usually stocked at the store, like a garment or shoes in a less common size or colour, and have it delivered to your home within a day or two.

And leaving with your purchases promises to be a more streamlined affair thanks to technology that lets stores better monitor customer flows and allocate staff to till points more quickly when demand increases – one element of the Connected Workforce which will empower and incentivise staff with technologies like gamification.

Self-service checkouts – which are currently being trialled by a major retailer at one of its Cape Town stores – promise, if properly implemented, to make for another quicker and easier checkout option for customers.

“The coming Connected Retail revolution will combine the best aspects of the online and bricks and mortar shopping experience, making for happier, more loyal customers who spend more at the store,” says Corniel.

But for this to happen will require looking beyond the Connected Customer, Connected Store and Connected Workforce, and bringing a series of technologies and innovations to the entire retail value chain.

The Connected Supplier will use embedded sensors and advanced analytics to prevent unscheduled asset downtime, increase labour productivity and synchronise or integrate activities, while the Connected Supply Chain will employ advanced computational techniques to forecast disruptions, reduce shortages, optimise warehouse collection and delivery slots and pro-actively manage advanced chains to reduce waste and theft.

Digitalisation and the store of the future have been topics of discussion in various forums, but at Deloitte, we believe it’s now time to make the concept real for the clients in our market and link business value to practical solutions,” says Corniel.

To this end, the firm recently strengthened its South African retail team with the addition of a number of individuals with extensive expertise in the international and domestic retail sectors.

It has also established a physical Connected Retail Experience at its Deloitte Greenhouse innovation hub in Cape Town. This immersive, interactive experience allows visitors to gain practical, tangible insights into every aspect of the Connected Retail ecosystem, sampling proven solutions alongside brand new technology relevant to each of the touch points: consumer, store, workforce, supplier and supply chain.

“It’s part of Deloitte’s new focus on ‘show not tell’ and we’re confident it will give our retail sector clients a significant advantage over their competitors as they position themselves to avoid the pitfalls and capitalise on the enormous opportunities offered by the Connected Retail wave,” concludes Corniel.

Source: Supermarket & Retailer 

It’s no secret that South African shoppers are beset by a storm of rising prices and it seems their shopping baskets are definitely feeling the pain with the average consumer now hyper aware of what they’re purchasing.

As a result, the latest Nielsen Shoppergraphics Report – which looks at shifts in consumer purchasing behaviour within 4 000 representative households across the country on a quarterly basis – reveals local consumers have dropped products from an unprecedented three grocery categories from their shopping basket; namely Household/Cleaning Goods, Beverages and Toiletries.

Nielsen CPG client service director Kelly Arnold comments; “It’s no secret that South African consumers are experiencing a severe wallet squeeze thanks to a raft of rising costs including spiralling petrol and electricity prices, the implementation of sugar tax and a VAT increase to 15%. The effect that this has had on consumer behaviour is profound and we’re now clearly seeing shoppers jumping out of some categories and consolidating their spend.

“As the household basket has become more expensive, we have also seen consumers limiting the number of trips, to 60 trips a year on average, and the top up shop that used to be twice or three times a week has dropped to once every two weeks, with spend per trip now averaging at R210.”

Overall the volume of sales has grown by 2.8%, with the monetary value of sales growing at about 6.3%.

“That said, we’re simply not seeing massive growth with consumers shopping less and spending slightly less; although there are instances of upgrading to larger pack sizes which may be a contributory factor to the small levels of growth.

“Interestingly, the repertoire or number of stores that consumers visit has increased to 4.9 retailers a year. This is as extremely price conscious consumers seek out deals, and are more prepared to shop around.”

What’s in and what’s out?
Drilling down to category performance, Arnold reports that consumers now purchase around 68 categories per year. “We have seen a move towards consumers spending more on dry groceries and perishables with staples remaining stable. The highest amount of spend is happening in frozen chicken and ready to eat cereals, sugar and UHT milk (a long-term trend) and canned meat. The latter might be because of the Listeriosis crisis earlier this year which compelled many consumers to switch from cold meats.

Looking at the specific categories that have experienced the biggest declines Household/Cleaning Goods which are no longer seen as a necessity have dropped by 6% and Beverages by 6%, with Carbonated Soft Drinks (CSDs) experiencing particularly negative performance.

“In this regard, contributing factors may well be the shift in volumes from 500ml to 450 ml size bottle within some of the top brands as well as an influx of other brands carving out a market share for themselves and now spreading their national footprint,” explains Arnold.

An upswing in branded retail
The Shoppergraphics Report also revealed a shift towards modern branded retail outlets away from independent retail within the LSM 1-6 market.

“The growth in usage of branded retail chains by this market could be due to the fact that more retail chains have opened stores in previously under-served areas with large, traditionally modern trade retailers having invested in this sector in the last two years. We also know that branded retail offers more competitive pricing and is therefore seen as less expensive,” says Arnold.

In contrast, higher LSM groups are increasing their spend in independent retail. “The type of behaviour driving this trend is that higher LSM groups are going to branded retail for their big monthly shops and utilising independent retail outlets to do their more frequent top-up shopping. For example, ‘I’m on my way home to Soweto I stop at the taxi rank where there is a Spaza shop nearby, grab a couple of things as a top-up’, resulting in LSM 7-10 spending more there,” explains Arnold.

To counter these trying times, retailers need to ensure they have the right composition of goods for their shoppers, at the right price given that positive price perception is extremely important for future success.

Arnold stresses: “Retail data has also never been more important in order to move past tough times .”

Source: Supermarket & Retailer

If 2017 is anything to go by, Black Friday is quickly becoming one of the busiest South African shopping days and, like the US, marks the beginning of the Christmas shopping season.

This year, online retailers are preparing for even more hype, but are we getting ahead of ourselves? Let’s take a step back and review what we can learn from previous years:

1. Start early to reap rewards
As early as October 2017, the N1 in Gauteng bore the fruit of well-planned marketing campaigns with enticing billboards. Research shows that more than 50% of holiday shoppers start researching gift ideas in October or earlier. This tells us that we need to plan ahead, and by early November, you’ll need to kick off your campaign to ensure marketing ROI.

Not only does this give you more time to generate opportunity, but useful, published links will start building page SEO – crucial in the ever-competitive e-commerce sphere. Major retailers are pulling out all the stops from well-segmented email marketing to encouraging customers to add products to their carts ahead of the day. But, Black Friday does not only attract the big players but the smaller retailers too. In 2017, Nichemarket listed more than 500 participating stores from niche to e-commerce giants.

2. Integrate and personalise
Sure Black Friday has a certain, recognisable look, but marketing efforts have become more personalised. Think beyond the homepage and set up custom product landing pages. Integrate these with your social media platforms for wider reach. Remember to include your marketing material throughout for a consistent, familiar message. Entice consumers with a clear USP.

3. Set the clock to create urgency
It’s a one-day-only type of thing, so get in with the hype and add a countdown timer to your website. Like Takealot, you can offer exclusive discount newsletter sign-ups with early deal leaks to get your customers on board. If you decide to extend the frenzy to Cyber Monday, communicate this with your customers before-hand. In 2017, Superbalist did this well by gamifying their deals with locks. Not only did they keep their customers informed but engaged throughout the entire weekend.

4. Make the most of seasonal shoppers
Before Black Friday, you need to have your Christmas specials in place to benefit from the Black Friday hype that still lingers. Allow it to link with Black Friday and continue to drive sales after the big day as people continue to shop over the entire holiday season.

5. Involve the entire team for great customer experience
On Black Friday you’ll be very busy. Whilst it’s important to drive sales, involve the entire team to ensure that you don’t neglect your customers. Done right, Black Friday is a great brand awareness tool, but if your customer experience suffers, even the brand loyalists may stray afterwards. You may need to hire extra staff or work longer hours.

6. Consider an omnichannel approach
Customer satisfaction extends to shipping, so consider offering free delivery or perhaps an in-store collect option for those yearning immediate gratification on their spend. It is important to understand the interchange between physical and online stores – consumers prefer an omnichannel approach where they can research and shop both online and in-store.

7. Offer generous discounts
Leading up to Black Friday, Game launched its online store with generous discounts knowing that it would motivate new and on-the-fence consumers to purchase. In the US “Black Friday bargains were bigger, on average, last year“.

Small, negligible discounts just don’t match the hype and it certainly won’t attract the powerful (and savvy online shopping) millennial consumer market. Before your brand jumps on the BF bandwagon, it may be wise to assess whether it’s worth it? Some shops choose deliberately to opt out and so could you.

8. Accommodate mobile users
Make it easy for customers to shop online by optimising your mobile checkout process. Consider adding a one-click checkout option to streamline the process, and offering real-time online support for quality customer support.

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My Office News Ⓒ 2017 - Designed by A Collective


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