Cellphone revolution to change way SA shops

Cellphone revolution to change way SA shops

FMCG SUPPLIER NEWS

Fin24 - Feb 7th, 09:21

The retail environment in SA will see big changes within the next year or so, experts say. The cellphone will be at the centre of the revolution.  

The way we go about making our purchasing decisions will be different and how these goods make it to the store will determine which retailer, ultimately, wins, says Adrian Bertschinger, MD for retail and consumer services at Accenture SA .

"The cellphone will change the face of retailing in SA," he says. Customers will in 12-18 months be able to whip out their cellphones and compare prices, see where stock and sizes are available and make a purchasing decision, he says.

"Peer reviews will be important too ; the apps (applications) on phones will enable you to see what other customers have said about certain products by just scanning a barcode.

"Centralised distribution centres are very important for any retail business to run well and we have seen more and more retailers using them. However, many are still not efficiently run. It will become more of a science than an art," he says.

"In future, all buying and procuring will be automat ed, as once a computer knows what sells in what store it will be able to order more for that store in the colour needed and in the quantity needed ," he says.

There will be less inventory on shelves and it will take the guess work out of procurement, Mr Bertschinger says.

The Foschini Group already has a similar system which it uses to "trade in-season" and is able to make goods to send to stores before they run out.

Mobile payments are not far away, Mr Bertschinger says.

"The plastic credit card may disappear altogether," he says. Self-checkout is already doing very well in the US, although locally it is a bit different, as labour is cheaper."

Derek Engelbrecht, director and sector leader for retail and consumer products at Ernst & Young, agrees cellphones will help revolutionise how we shop.

"An iPhone app already allows you to go into a store and scan the barcode and compare it to the Amazon price," he says.

Mr Engelbrecht says the near-field communication concept will also become popular.

"Basically you will be able , in future, to bump your cellphone against a terminal and your account will be debited for any goods you have purchased. Your phone will become a digital wallet of sorts," he says.

Another trend to look out for is the pop-up shop, Mr Engelbrecht says.

"This occurs when the retailer fills a container with goods and takes the product to the consumer. Sportswear brands will take goods to a football match, for example."

There are limitations to this format, however, he warns, and not every retailer can make use of the format. "A food retailer would not be able to do that," says Mr Engelbrecht.

But even more important is the element of crowd-sourcing, he says. "More and more will research on the internet and Facebook, or ask their Twitter followers, and make purchasing decisions based on the feedback. No longer will we go into a store and wait for a salesman to tell us about a product."

Green retailing will move from a nice-to-have to a must- have, some analysts say.

While the loyalty card will still be the definitive way to find out what a customer wants, what he or she has bought will also help retailers to predict what customer may want in the future. Pick n Pay has recently launched its loyalty card, which has cost it R200m, but will bring rewards, analysts say.

Woolworths has said it keeps reaping the benefits from its loyalty card, and recently launched a Facebook app to interact with customers.