Established South African retailers need to adopt new strategies if they are to continue creating value for consumers in the age of rapid and dramatic changes in the retail landscape. These macroeconomic and technological trends, termed the Big Shift and detailed in our Retail Transformation report, have the potential to change the way that products are bought and sold.
With the Deloitte-sponsored Retail Congress Africa event happening in Cape Town on 3-4 November 2015, conversations amongst retailers will revolve around the theme of ‘Enabling retail entrepreneurs to accelerate growth in Africa’, and Big Shift trends may have a significant role to play in that growth.
Big Shift trends are reshaping the global business landscape:
- Consumers are gaining more power through greater access to digital information that is decoupled from the physical store.
- The technology revolution has also drastically lowered the barriers to entry for new, niche, smaller retailers to enter the market and resulted in increased competition for both traditional and non-traditional retailers, leaving many scale-based, efficiency-driven retailers struggling to create value in a world where consumers enjoy almost infinite variety and demand instant gratification.
- Increased access to market demand is transcending geographic proximity
- On-demand fulfilment is reducing the need for retailers to hold inventory
All in all, new technologies and customer relationships are opening up new ways of creating value.
In Africa, technology is playing the biggest role in reshaping the consumer landscape as its evolution is far quicker than the changes in public policy on the continent. These changes are taking place with a lagged effect in South Africa and the rest of the continent but they are still happening at an exponential rate. In South Africa we have gone from the personal computer, to e-mail, to the web, to cell phone, to smart phone, to apps, to mobile payments, to social media and to wearables in just over two decades. How will the retail landscape look in next five years if we project this change forward at an exponential rate?
Considering that a lot of retail activity in Africa still happens in the informal economy, coupled with the rapid adoption of mobile payment solutions on the continent, there is a high probability that the continent could leapfrog some of the formal retail evolution. This means the African retail landscape could be a relatively quick adopter of the trends currently happening around the world.
How to adapt? Be flexible, learn from global trends and be prepared: compete for the requirements of tomorrow and invest in the future.