'Death of the store' exaggerated - retail expert
It turns out the concept of “the death of the store” was exaggerated, James House of MasterCard Advisors told Fin24 on Tuesday at the World Retail Congress Africa.
“Ten years ago people said the internet is killing stores, but now we see a mix of both is needed,” he explained.
“There must be a ‘blurring’ between the use of a physical store as part of interaction with customers and the online experience. The question is how to use the best of both.”
Globally, only 10% of transactions are done online, for instance.
The news that Amazon.com will be opening a physical store, is a testament of the "blurring lines", said Steve Sadove, former chair of the National Retail Federation and former chair of the National Retail Federation and former chair of Saks Incorporated.
He added that in order to play in this new emerging retail space, one needs to use technology in the best way.
The use of so-called big data is another trend, but Sadove cautioned that the extraction of value is often missing in terms of what retailers derive from it.
"It is very important to understand the customer in terms of what the data mean so that retailers can have a 360 degree view of the customer," said Sadove.
"The retail revolution in my view will be the ability to localise things for customers. Retailers and their suppliers are increasingly working together to obtain a deeper understanding of what customers want."
House told Fin24 that customers are now more in charge than ever and the challenge for retailers are how to reflect their different needs.
As for malls, he said they still have a role to play, but it has become more about offering a leisure experience to consumers. There is also a trend towards smaller, "authentic" retailers, he said.
At the congress MasterCard also discussed the findings of a social media study it has done among consumers in South Africa, Kenya and Nigeria.
Of the posts reviewed, 86% were about innovative payment methods, while 84% of those were about digital wallets.
According to MasterCard, this indicates how interested consumers in sub-Sahara Africa are in innovative and convenient methods of payment.
The study provides retailers with stronger insight into what drives consumer conversation regarding shopping and retail, and so greater understanding of their audience.
Key findings from the study indicate that consumers are vocal about their expectations of both tangible and intangible benefits from their retail experiences.
Researchers generated the findings by examining 5 700 Facebook, Instagram, Twitter and forum posts between October 2014 and September 2015.
When it came to digital shopping platforms, tweets on MasterPass dominated with 93% of the digital shopping platform volume.
“By examining engagement on social media platforms, we can offer retailers almost real-time insight into consumer opinion of new payment innovations,” said Mark Elliott, division president of MasterCard, South Africa.
“This study makes it clear that sub-Saharan African consumers demand new and more convenient ways to pay. It also shows that payments are at the heart of the shopping experience, causing frustration when not accepted and improving consumer engagement when payments are fast and easy.”