Advertise with fastmoving.co.za
 
 

Companies that remain structured in silos, viewing data, web shopping and marketing as add-ons, will falter.
Companies that remain structured in silos, viewing data, web shopping and marketing as add-ons, will falter.

Retailers feel the heat as e-commerce siphons off sales

RETAILER NEWS

By Isana Cordier - Apr 11th, 09:47

The start of 2019 has been bleak for most SA retailers, raising questions about the future of the sector. 

It is uncertain whether there will be an improvement later in the year or whether this is the beginning of a permanent shift in consumer behaviour that the sector could be ignoring at its peril.

If the current economic conditions can be viewed as a dark cloud blocking out the consumer, what then lies beneath? Has this cloud been masking a huge shift in consumer behaviour in the retail space? Andrew Jennings, retail expert and author of Almost Is Not Good Enough, recently said that change in retail has never been this fast, and it will never be this slow again.

The question then is how to understand this new world in which the consumer moves, a world in which the boundaries are no longer constrained by physical location, payment mechanisms or brand loyalty — in which choice, speed, convenience, health, environmental impact, individualism and personalisation seem to have crept up on us overnight and shaken organisational structures to their roots.

If organisations remain structured in silos, viewing data, e-commerce and marketing as add-ons to sales, they have a problem. The current consumer seems oblivious to channels and moves seamlessly from one to the next in the process of gathering information, making decisions and ultimately executing a purchase. The question is, how can retailers grab the attention of their target customers and remain relevant in future?

Linah Maigurira, Google industry manager for retail and e-commerce, says Google is going to great lengths to understand consumer behaviour. Through multiple Google platforms, they are able to interpret consumer intent, how they behave and move through various platforms from an original search to the sale.

Google Shopping, for example, is primarily built to empower consumers throughout their shopping journey and is a powerful tool for retailers as well. Retailers are able to understand how consumers respond to their product inventory, which in turn will empower them to match their offering to consumers’ needs.

Absa has also recognised its capability to use card-acquiring data to perform data analytics and understand consumer spending behaviour. An analysis of this data for Black Friday in November 2018 resulted in interesting insights on consumer spending patterns.

For instance, “card present” continues to be the preferred method of payment, although online spend has significantly increased in recent years. Noticeably, Absa customers’ spend from one specific online retailer has more than doubled. Google SA has also reported a strong spike in searches relating to Black Friday deals compared to the previous year.

Opening stores at midnight

The data reveals that the top category contribution to overall spend on Black Friday, from issuing and acceptance sources, remains groceries with more than 50% of total spend. It can also be seen that the Black Friday frenzy has now spread across SA as spend has increased in outlying provinces, after being focused mainly in Gauteng and Western Cape in previous years.

Some of the “wackier” Black Friday trends involved opening stores at midnight. One retailer that opted to pursue this strategy recorded its highest turnover at 1 am, while others that attempted this strategy eroded their overall turnover on Black Friday compared with the prior year. This indicates that this is not a one-size-fits-all game.

What is becoming clearer from all the data points is that no retailer can assume natural attraction by brand loyalty and product offerings alone. Reaching out to the consumer through familiar marketing channels such as audio and visual has become less impactful.

To remain relevant and attractive in the fast-paced shopping universe, knowing your consumers is even more important to retention and growth strategies than before. Consumers are indeed still spending, just not in the manner they used to, and some of this spending has nothing to do with the current economic conditions.

Leveraging data analytical insights can lift the dark cloud masking consumer behaviour and allow retailers to adapt their strategies accordingly and remain relevant to the ever-changing consumer.Business Live 

Related News

Checkers brings world-class retail to Constantia with new flagship store
27/11/2019 - 13:01
Checkers has opened the doors to its state-of-the-art 2 330 m² flagship supermarket at the Constantia Emporium as the retailer continues to take innovation to new heights.

Woolworths carves out market share in SA
27/11/2019 - 10:11
In Australia, David Jones's sales declined 2.1%, with the company saying a store refurbishment contributed to the decline.

Push and pull strategies work together to keep consumers coming back for more
26/11/2019 - 10:20
The retail sector is under increasing pressure as consumers have shrinking disposable income in a strained economy. Maintaining share of wallet is critical. Relying solely on a push route to market strategy from manufacturers into retailers is not enough to get consumers buying products. A pull strategy needs to coexist with the push to drive brand consumption. Integrating these strategies requires intelligent and insightful decision-making. This, in turn, requires data generated through smart technology which provides line of sight across the value chain from manufacturer to distribution, retailer to the consumer.

Exclusive leases must fall: Commission cracks whip on Shoprite, Pick n pay, Spar, Woolies
26/11/2019 - 09:57
The Competition Commission Inquiry into Grocery Retail, published on Monday, called for an end to the exclusive leases negotiated by national retail chains in all shopping malls across the country in a bid to open up access to markets for smaller players.

Today’s customers are loyal to speed and convenience, not brands
25/11/2019 - 11:15
Consumer expectations are rapidly shifting as technologies such as mobile, geolocation, social media and increasingly, Internet of Things devices and wearables, connect people to a world of easily accessible information and convenient services. With the ability to browse, compare and order with a few swipes and taps, consumers are becoming trained to value convenience and service above nearly anything else.