Neels van Tonder

Technology trends are in the hands of consumers

The economic downturn, although a negative occurrence by many standards, had tremendously positive outcomes on the traditionally powerless customer. Changing business models and flexible service-level agreements in business began to emerge, giving the customer more choice, and this has fully extended into the retail industry, where technology trends are now completely in the hands of the smart consumer.

According to Neels van Tonder, CTO of Argility: “In retail, the change in technology is not driven by technologists, but by the consumer-side.” He believes that determining what will satisfy customers and then achieving it is a key challenge in the new digital order. “When it comes to the traditional brick-and-mortar shop, consumers are well-informed, and they arrive with different expectations than in the past.”

Van Tonder attributes this shift in mindset to the contribution of online as a means to access information. “Consumers now have access to a much wider pool of knowledge, and this results in a dramatic change in expectations. Consumers these days walk into a shop and demand to be understood.”

It used to be, says Van Tonder, the retailer used to determine the shopping experience – from what was available, to where it was available and at what price. “The new dynamic consumer wants choice and retailers these days have no choice but to comply. Competition requires adaptation to new, standardised technologies on the part of the retailer,” he says.

Lisa Fretwell

Gerhard Dumont, IBM South Africa retail sector lead, discusses a “new loyalty”, where retailers are loyal to their consumers and not the other way round. IBM Institute of Business Value’s Annual Consumer Study points to this.

“Retail has become all about trust building,” he says. “And this trust is driven by the product and its relationship to the consumer.”

Unfortunately, he says, there is a lack of loyalty building seen on a local front. “Local consumers are willing to share information, but only if there is a perceived value. Retailers need to ask themselves how can this be translated into a meaningful relationship. Offers should be contextual and relevant and South African retailers are not doing great in this area.”

“The ability to offer the consumer a seamless experience is very important,” says Van Tonder. “Part of the new consumer’s growing expectations is receiving the same level of service and consistency, no matter how or where they shop.”

WHAT THE CUSTOMER WANTS

According to Lisa Fretwell, senior director of Cisco Internet Business Solutions Group, one area where many retailers fall short is in not integrating their physical and e-commerce divisions. “Operationally, these areas need to work closer together. It is imperative that they are integrated. Some retailers have invested for future already in this manner and these are the ones that maintain competitive advantage.”

According to Van Tonder, myriad systems make the shopping experience cumbersome, and make it lose value.

Garth Meier, sales director: retail for Software AG South Africa, states: “Retailers need to have real-time information available at any given time; information about the consumer that has just logged on; information about the whereabouts of the stock that is being viewed; and the method of payment that the consumer prefers. Systems provide this information and the challenge remains to make it a real-time view.”

He believes access to internal systems is a challenge as we move towards the information demand era; retailers cannot afford to be providing archaic information and access to the products they sell. “Being able to deploy these information pieces to any platform and any device is a challenge, technology can now solve this issue for them,” he says.

According to Rian van der Merwe, head of Product at Kalahari.com: “Customers are becoming more and more demanding, and there is so much less room for error. This is ultimately a good thing though. It means the companies that are going to succeed are the ones that deliver superior customer experience at all costs. The ones who only pay lip service to ‘customer centricity’ will fall by the wayside.”

THE EXPERIENCE

Fretwell believes the most successful retailers are those that can create experiences for the consumer.

“Behaviour is now cross-channel,” she says. “If you can capture consumers and drive them across channel, you will be on your way to a successful relationship with your consumer.”

According to Van Tonder: “Technology is the enabler in the changing retail environment, where agility is crucial. It must facilitate multiple rather than just traditional cross-channel shopping. Consumer expectations for a consistent shopping experience, across channels, are extremely hard to meet in traditional solutions.”

He believes delivery of solutions, on-premise or in the cloud, must be consistent. The focus must be on a single view of the customer that includes interactions with the retailer; as well as a single view of the supplier/retailer, from the customer’s perspective – irrespective of the shopping channel or device.”

Van der Merwe says: “Analytics is only one side of the coin – the other essential pieces are customer interviews and usability testing to understand how and why these issues are happening. Only then can you start to improve the experience.”

“In the recent past,” says Fretwell, “the biggest purchasing decision influencer was family… now biggest influencer is digital content.” She says according to recent surveys done by Cisco, 70% of people are now turning to digital first.

According to Meier: “In this day and age, if it is not available on a mobile device, it gets little to no attention from the general buying public. This certainly is the case with regards to the 13- to 21-year age group, where the most effective marketing is done on social media platforms. Retailers have to move quickly to ensure that product lists and – most importantly – pricing and location are detailed on all mobi sites.”

He says retailers are forced to provide a platform that enables potential customers to view and purchase from their mobile devices. With the modern day ability of a smartphone device, you are almost able to purchase anything over the Internet, provided the information is available to make an immediate decision. “With the introduction of slate PCs and tablets, the ability to now investigate the product or service is strengthened, and again the availability of information is crucial,” he says.

According to Van der Merwe: “People are now able to give feedback about products and services on their own terms and without the involvement of brands. Since they always have their phones with them, every shopping experience – whether it be online or offline – is an opportunity either to impress or to upset, and customers will end up telling their large social networks about their experiences.”

LOCAL OUTLOOK AND THE FUTURE

Van der Merwe continues: “Where developed nations like the US and UK are smartphone-dominated, in Africa we have a much larger skew towards feature phones. This means we have to provide mobile experiences that work down to the dumbest of devices, because that’s the only way many people will ever access the Internet. In June 2011, we ran a mobile survey, and of the 6 200 who responded, over 51% of connected South Africans said they access the Internet on their mobile every day and they have the intent to transact. In fact, 26% said they had already made a purchase and a further 53% were considering it.”

Fretwell says it is true that in SA, where about a third of the population moved into the middle-class already, modern retailing is advancing quickly, but the environment simply does not allow for rapid deployment of advanced in-store, or mobile technologies, due to broadband penetration and smartphone penetration. “There are pockets of innovation, particularly from small retailers experimenting with digital media, for example, while the larger retailers like Pick n Pay and Woolworths are focusing on core retail and cost-effective operations, as their counterparts in the USA and UK have done. This is starting to change with specialty retailers taking up the lead with innovative, in-store digital media and video analytics, for example. We would expect to see this pace of change increase as the retail market becomes more competitive. There are indeed opportunities for SA-based retailers to be fast followers, and incorporate the most successful in-store and multichannel innovations that are most likely to succeed, considering SA’s economic, societal and infrastructure set-up.”

According to Dumont, South African retailers are three to four years away. “Not because they don’t understand analytics, but rather that their priorities are still fixed on store expansion typical in a developing market,” he says.