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Despite challenging global economic conditions, retail sales in South Africa rose 1.3 percent year-on-year in July.
Despite challenging global economic conditions, retail sales in South Africa rose 1.3 percent year-on-year in July.

The changing face of retail

RETAILER NEWS

By Cecil Ungerer, Chief Sales Officer of in-store advertising innovators Smart Media - Jan 14th, 11:34

Despite challenging global economic conditions, retail sales in South Africa rose 1.3 percent year-on-year in July. Even though this is in line with expectations, it is still a positive sign that consumers have been willing to spend amidst pressure to tighten budgets. 

And yet, anecdotal evidence from many retailers suggest that certain product categories are struggling. Traditional bricks-and-mortar retailers are having to adapt to a more diverse and engaging customer experience, satisfying the digital aspect of our daily lives for both research and convenience. On one hand the retail sector is showing promise, however, there are significant challenges in consumers committing during the ‘last mile’ of their purchase journey, particularly when it comes to non-essentials. The market has become ever more competitive and those with an edge are standing out to consumers.

Fortunately, technology is evolving at such a rapid rate that brands have access to a bevy of tools geared towards enhancing the in-store experience. Increased data gathering and direct feedback from consumers is assisting to reshape the brick and mortar experience and in-store media along with it. While traditional media at point-of-sale is still critically important, especially in remote areas that do not always have reliable internet connectivity for digital mediums, innovations are being piloted on an ongoing basis. Today’s consumer wants to have an integrated store journey that’s both informative and engaging where experience is tantamount.

This is especially the case when it comes to those retailers who have a large footprint capable of dealing with a diversity of markets and shop fittings. At a retail conference held in the US last year, one of the most significant trends identified was that of creating more personalised digital experiences for consumers. This is already occurring in the e-commerce space although South Africa has a way to go before becoming as sophisticated as retailers in the US and Europe.

Granted, First World markets have the luxury of creating a more consistent consumer experience across store environments, whereas in developing markets like South Africa there are challenges such as infrastructure to overcome. Irrespective, if they are to drive growth, local retailers must start embracing an omnichannel customer-centric approach to give customers a consistent, valuable experience cognisant of their unique needs.

We are seeing the shift happen from above-the-line (ATL) spend to in-store smarter media. Being visible at the retail store and the point-of-sale where significant customer footfall occurs must be a priority. If customers do not see a brand and get the opportunity to experience it for themselves, there is a greater chance that they will opt for a competitive product which is more visible.

International research shows that more than a third of consumers rank in-store browsing as their main product discovery tool. This is in stark contrast to five years ago when a quarter of shoppers said television ads were their main source of product discovery. So, even though digital (in the online sense) is important, brands must not ignore the opportunities provided by the retail setting.

In-store promotions form a key part of this. Yes, digital displays are great, but there is something to be said for the simplicity of ensuring branding is done at all relevant touch points of the customer journey. From co-branded store windows to security barrier sleeves, the process starts long before a customer walks into a store and is finalised at point-of-purchase.

Despite the branding opportunities available to retailers, the reality is that the industry is changing, and technology has made solutions more innovative to combat jaded customers who ignore marketing messages. A strategic approach incorporating a dynamic media mix is critical for brands wanting to reach their consumers, they need to partner with media companies who have customer engagement top of mind.

 

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