SA loves shopping, but enough for retailers?
South Africa is a country that loves shopping, but the big question is whether the retail industry has run out of steam, according to Rohit Talwar, futurist and strategic adviser of FastFuture.
Based in the UK, he advises global companies, industries and governments on how to survive, thrive, spot and manage emerging risks and develop innovative growth strategies.
“It is important for SA retailers to think about the next five to twenty years,” he said at the 19th congress of the SA Council of Shopping Centres (SACSC) taking place in Durban this week.
“The future is exciting on the one hand, because of lots of opportunities, but there are also challenges because of existential risks.”
His research showed that one of the big potentials in the SA retail industry could lie in townships.
“But then the SA retail industry would have to develop a new thinking about serving those township markets. For instance, a big mall might not work so well in a township,” said Talwar.
“Retailers basically have a choice between two routes. Either they must play by the existing rules of the game or they must create a new game. The SA economy is under pressure and that creates huge uncertainty.”
That is why, in his view, organisations should have some early warning system regarding trends and risks.
“Retailers will have to look at potential opportunities and decide if they want to choose to be the first to go in and be pioneers and run the risk, or wait and follow later,” he explained.
One trend he has noted overseas is for retailers to use alternative ways to obtain revenue. Some retailers use auction models, for instance, during quieter times in their shops.
Customer service is also becoming more and more important in the retail world.
Another trend he has seen oversees is for malls to create a “mall within a mall”. He gave the example of a mall he visited where there was a section of about 20 shops all aimed at men. This was situated in one area within a larger mall.
The growth of specialised malls and the use of themes by malls are other trends in luring customers. He has even seen some retailers and mall owners starting to invest in potential future tenants in their malls.
“The challenge is how retailers and shopping malls are preparing for the future rather than just staying in a mere response mode,” said Talwar.
* Carin Smith is a guest of the SACSC at its congress.