Technology has entrenched itself into virtually every industry, and retail is no different. A recent report from Forrester lists the top four retail tech trends as; personalising the shopping experience, investing in omnichannel, leveraging predictive analytics and enhancing the in-store experience through digitalisation. These trends are highly focused on improving existing retail operations rather than overhauling retail through innovation.
In South Africa, digital efforts by retailers continue to be hampered by the high costs of bandwidth. However, South African retailers are still investing in these tech trends to reshape their offering; improve operations, reduce costs and expand their reach.
Collaboration and partnerships
The lines between different retail segments are blurring, as retailers step out of their traditional offerings to bring customers new, value-added and unexpected services and products.
Through strategic partnerships, local retailers have expanded their offering to include financial services, municipal account payments, coffee shops, entertainment ticketing, gift vouchers for services like Showmax and Uber, multiple payment options such as cryptocurrency, and innovative delivery options for both in-store and online shoppers, such as delivery pods located at your nearest petrol station.
Retailers have also partnered with online platforms offering multiple products to extend their reach, either in lieu of or as an extension of their own online portal.
These additional services and products are making it easier for shoppers to spend more time in their stores, minimising the need to make multiple stops with an “everything under one roof” policy. At the same time, some of these partnerships allow retailers to leverage the benefits of technology without necessarily making an investment of their own.
Improving the in-store experience
Despite the rise in e-commerce, South African retail is still heavily dependent on foot traffic and having a brick-and-mortar presence. Retailers are turning to data mining and analytics, and artificial intelligence (AI), to gauge their market and predict their consumers’ spending habits and browsing preferences. Using this data, they can proactively target individual audiences, customising and shaping their offering specifically towards individuals. This vastly increases the possibility of customers spending with their store/brand, while also engendering loyalty.
In terms of operational streamlining, technology is providing a platform for retailers to gain more accurate insights into stock movement and levels, enabling them to more efficiently move slower moving products with strategic campaigns in a smaller space of time.
Retailers are exploring sensor data and real-time analytics to quickly decipher which product lines are selling out and which need a push at any given time. Adding in AI, they can promote slower moving stock to customers at the check-out point with almost immediate effect, saving costs on storage, lost profits in stale stock and logistics spent to move unsold stock.
Predictive buying patterns also enable retailers to stock their stores based on regional demographics and demand better than they have before, minimising the risk of stale product.
Retailers can look at things like self-service checkouts to streamline the payment process provided that the cost of bandwidth becomes more affordable. An “honesty till” requires some sort of camera verification or confirmation to minimise the risk of theft, and the camera quality, real-time alerts and back-end analytics are heavily reliant on high-speed connectivity.
Technology in unexpected areas
We are seeing unexpected technological advancement in the manufacturing sector, where traditional manufacturers are overcoming economic decline by expanding into the retail space and connecting more directly with consumers themselves.
For example, car manufacturers are leveraging applications and other online platforms to engage directly with customers, allowing them to customise their purchase at the manufacturing point. In the construction space, tile and fittings manufacturers are providing customers with technology centres where they can use an application to plot their living space and get a virtual impression of the final product, so customers no longer need to take a selection of samples home with them to choose from.
Technology is also making itself felt in underlying areas of retail, improving efficiency and reducing costs. Brick and mortar stores are very dependent on expensive utilities, such as cooling, electricity and light. Smart devices can be deployed to measure and monitor use, automatically adjusting based on occupancy or peak times, helping to reduce costs.
Ultimately, local retailers are turning to technology and digitalisation more to drive foot traffic, increase in-store customer engagement, move stock quicker, appeal to the younger, new generation of shoppers, and improve on their overall customer experience, rather than becoming entirely disruptive.
Retail is still retail. It’s just getting better.