Gys Kappers, WyseTalk

The prevalence of mobile and its use as a self-service channel is causing an upsurge in local e-commerce.

Only 11% of South African consumers choose self-service channels over traditional channels, according to a white paper from Merchants (Self-Service: a South African Perspective) published earlier this year. The white paper suggests it’s not due to lack of technology, but due to lack of supply and demand.

However, a study by World Wide Worx (Internet Matters: The Quiet Engine of the South African Economy) says e-commerce is gaining traction locally. The research company predicts the Internet economy will grow to 2.5% of SA’s GDP in 2016. This doesn’t sound like much, but according to the study, online retail revenue in SA reached R2 636 billion in 2011.

On a broader level, according to HP’s PPS retail account manager, Kevin Kitchin, new technologies are emerging and being adopted by consumers, which means customers expect to shop at any time, from anywhere, and in any way that suits their own requirements. “That said, brick-and-mortar stores still account for more than 80% of revenue; and here the major technology developments are versatile point-of-sale systems that deliver fast, effective customer service while enabling retailers and business owners to better manage their operations,” he says.

Yaron Assabi, CEO and founder of Digital Solutions Group, says according to MasterCard’s Worldwide Online Shopping Survey, conducted in 2012, there has been a steady increase in the number of South Africans shopping online, from 53% in 2010 to 58%.

“Retail in SA is experiencing this shift due to the ever-changing expectations of more digitally-empowered consumers. The mobile phone specifi cally is changing the retail experience in SA, from my observations. Brands are starting to enter into uncharted territory, investing in mobile and dealing with challenges around the marketing effort required to achieve mass consumer adoption,” he explains.

According to Bevan Ducasse, CEO of wiGroup, retail is a hotly contested space and the environment in which retailers operate is fast changing, the majority of that change being driven by development and adoption of new technology. “The Internet and the explosive uptake of the mobile phone, for example, mean consumers now have instant access to information, which puts them increasingly in the driving seat,” he explains. “Mobile payments are another signifi cant area in which technology is changing the retail experience. Consumers increasingly expect to be able to pay using their mobile phone. The Internet and mobile are just two examples of how technology is affecting the retail experience, from consideration right the way through to purchase and delivery.”

Gys Kappers, CEO of WyseTalk, believes technology is playing a large role in the retail space globally and across SA – as many are hoping the integration of new technology solutions will not only streamline processes, but bring them closer to the consumer than ever before. ”The current generation of shoppers are smart, knowledgeable, demanding and very selective. It’s a mobile ‘always on’ technology-driven world and consumers are using this to drive self-checkouts on their smartphones, interact with friends in real-time as they make purchases, and receive discounts and personalised pricing as they shop. As a result, retailers have to continuously challenge themselves to discover better, more efficient and cost-effective ways to meet customer needs and surpass expectations,” he says.

According to Hendrik Bredenkamp, MD of Skydirect, technology is enabling customers to have a better retail experience and retailers have improved the efficiencies of their supply chains.

“Retailers have used technology to ensure they maintain optimum stock levels, which means customers can fi nd what they’re looking for,” he says.

Roy Alves, business development manager at Axis Communications, believes technology has had an impact on the local retail experience by delivering services such as meaningful customer-counting data that can ultimately provide retailers with the ability to better understand their conversion ratios of sales to customers, and how to improve this with smarter and informed decisions utilising accurate data in real-time.

Ian Steyn, executive of products and services at Innervation, says retailers are using technology to quickly gauge customer behavioural trends in order to better serve and connect with customers.

SELF-SERVICE & MOBILE

“As consumers become more tech savvy, there is a shift not only from the traditional bricks and mortar to m-commerce, but also from product-centred merchandising to customer-centric ones, where customers are demanding real-time access and service,” says Kappers. “This provides a large opportunity for retailers to explore self-service channels, offer a more streamlined value process and improve customer experience and retention.”

Roy Alves, Axis Communications

According to Kitchin, the new generation of so-called “omni-channel” shoppers expect choice, convenience and speed using any sales channel they desire, including in-store, kiosk, e-commerce, m-commerce, and f-commerce – but they also spend 15% to 30% more than single-channel shoppers.”

He states mobile technology in particular delivers a platform for 24/7 interaction with customers at home, in transit, at the mall, at particular stores or displays, and at the point of sale.

Alves points out, according to a recent Cisco study, one-third of global consumers use multiple channels when shopping. “The survey shows 23% of consumers recently made in-store purchases based on research they did online, and 11% of shoppers purchased online after seeing it in a retail store.” He believes incorporating self-service channels is essential for companies that wish to stay competitive.

Assabi believes self-service channels are defi nitely cost-effective in the long term, and investment into these systems can ensure convenient service is offered to customers anytime, anywhere. ”Mobile-based loyalty programmes and cards, for instance, have huge potential in SA and provide a service that consumers can really relate to and enjoy the benefits of. By providing enhanced service to loyal customers, business can issue loyalty cards, coupons, promotional material, and payment options straight to customers’ phones, resulting in an improved brand experience for the customer,” he explains.

According to Steyn, convenience and relevance are the key pillars to a successful investment in any self-service solution. “Trends indicate that more and more high LSM consumers are using mobile price checking; opting in for location-based promotions and comparisons, but often will make the final purchases in the store. “Companies must implement relevant self-service channels to support their brand objectives targeted at the right customer segments. Companies which embark on new self-service solutions must ensure they are targeted at the right customers, and most importantly, with the right value proposition,” he explains.

SELF-SERVICE CHECKOUT

Bredenkamp says various retailers in SA are currently investigating self-service checkout technologies. “Radio frequency identification (RFID) tags have proven too costly, since each tag costs upwards of R8, which makes it unviable to tag every product in stores,” he explains.

“Another system rumoured to be in the works basically has customers pass product barcodes through scanners by themselves, at special checkouts, available to select customers through loyalty programmes and with random checks to ensure honesty. It does, however, still require supervisors be on hand to deal with any bar code-reading errors or irregularities, so it is not ideal,” he explains.

Hendrik Bredenkamp, Skydirect

Another system that promises great efficiencies, he says, is not so much self-checkout, but rather, cashless transactions. Customers will use near-field communication (NFC) technology in their smartphones to instantly pay for their goods without the need for cards, card readers, links to payment processing gateways by retailers and signature and PIN-code verifications. It promises greater security and efficiency for customers and retailers alike.

According to Ducasse, low touch or low involvement purchasing can effectively be moved to self-service channels. “As technology develops and consumers become more used to self-service options, more complex purchasing can be moved to these channels. The key is ensuring the process is kept straightforward and that help and guidance are available. A poorly implemented self-service channel will negatively impact a business and drive away customers,” he says.

THE CONSUMER VOICE

According to Kitchin, the voice of the customer carries more weight these days than ever before. “Social media enables customers to exert greater infl uence on the brands and services offered to them. To improve the shopping experience, retailers are demanding reliable, flexible and versatile point of sale systems that allow many options for store environments, and are able to resist tough conditions that include splashes, smoke and dust.”

Assabi says social media platforms have changed how consumers research, shop and make purchasing decisions. “With this, consumers are increasingly using the social platform as a community to share their knowledge and shopping experiences. By encouraging loyal customers to engage with the brand through their channel of choice, retailers can build on providing greater customer experiences, resulting in improved brand loyalty and overall return on investment.”

With the rise of mobile devices and the increase in access, more and more consumers are going online, and as a result, retailers are increasingly adding an online presence to their traditional set-up to capture this market, according to Kappers. “What’s more, many are also looking at mobile payments and mobile money options – as the demand increases. Ultimately, the change in consumer behaviour is driving retailers to explore new ways of doing business, new ways of streamlining operations and new ways of gathering consumer information in real-time to drive additional revenue streams – which, in essence, sees them turning to technology to assist,” he says.

Local consumers, like consumers around the globe, are price-conscious, explains Kappers. “They want to know how much products cost before they arrive at the tills, and if they’re getting the advertised deal they read, watched or heard about in the broadsheets, on TV or on the radio,” he says.

He also believes local consumers appreciate the benefits of visiting a store where they can peruse products on shelves, as indicated by the latest figures on Internet shopping in the country, which although up, are still relatively low compared with the total number of shoppers.

RETAIL TRENDS

Furthermore, Kappers identifies the biggest trends in the retail space to be the drive towards self-checkout, self-help and online shopping, which has driven new apps like Pricecheck.

“Self-checkout has been a publicised concept for decades now, but the technology to enable it has been too costly and risky in the past. New solutions and the ubiquity of consumerportable computing power are beginning to make future solutions viable, although no concrete solutions exist today,” he explains.

“At a corporate level, we’re seeing a growing focus on the use of big data to deliver a more complete picture of customer behaviour,” explains Kitchin. “On the shop floor, modern point of sale technology is allowing retailers to take the cash register to the consumer, as it were, with mobile devices that open up new ways for retailers to engage with customers.”

Ducasse believes the mobile phone, while it is not a retail technology trend itself, is changing the way retail operates. “An interesting example is the posters in subways in Asia, with images of grocery and household products with associated QR codes, enabling commuters to use their mobiles to do their grocery shopping on the station, or train, on the way home; a poster effectively replacing a convenience store. There are many other examples that demonstrate just how big an impact the mobile phone is having on retail. In today’s world, every moment is mobile,” he says.

The most noticeable trend is the innovation of apps and digital loyalty programmes that can be used on tablets and smartphones, Assabi says. “This will force retailers to keep prices competitive and Web sites active – to compete with all the other retailers which are adopting various mobile retail solutions on similar platforms. The end result will be large investments and interest into retail technology solutions where developers will become instrumental in assisting and guiding retailers’ digital solutions to retain customers in an increasingly competitive environment,” he explains.

According to Alves, it’s all about the customer. “The biggest retail trend is optimising social business for your company. Social media presence is key. Your customers are most likely hearing about your product from Twitter or any other social media platform, and you as a retailer need to be aware of these conversations. Leading retailers will address customer concerns proactively in a number of communication channels, and then aggregate this customer feedback data to make the changes they need to their global operations,” he concludes.