South African shoppers still prefer physical stores despite significant growth in online shopping, a PwC survey released on Tuesday showed.Compared to developed markets, the online shopping segment in SA is small and largely focused on the nonfood market.

However, since the country’s population is so young, the adoption of a more socially connected, digital retailing space where customers not only purchase products but also receive a memorable experience, is imperative for retailers looking to maintain or gain a competitive advantage over competitors, said PwC SA’s retail and consumer head John Wilkinson.

The survey, based on 19,000 respondents globally, of which about 1,000 were from SA, found that the physical store remains the retail touch point with the highest frequency, driving retailers to transform in-store experiences with differentiated storefronts that turn stores into ultimate shopping destinations.

Only 14% of South African online shoppers say they shop online weekly or more frequently. Preserving the strength of the traditional store, 53% of local survey respondents say they have browsed for products at a store but decided to purchase them online, while 73% say they have browsed online but decided to purchase products in-store.

"For the past several years, the story around retail stores was ‘showrooming’, in which stores were places to display items for online purchase," Mr Wilkinson said.

"However, this year’s survey results show that the online shop has also become a showroom where shoppers research and compare prices for later, in-store purchases," he said.

Mr Price, whose core market comprises 16- to 24-year-olds, is seeing online traffic significantly driving offline sales, and its market share has grown significantly since it launched its online store.

The spending capacity of older consumers is also strong in emerging economies.

"Interestingly, most of our customers under age 24 are just browsers. The vast amount of transactions are people above that age group, they’re the ones with the money. So the data tells us that the younger generation is made up of browsers and the older generations are transacting," the fast fashion retailer said.

Similarly, Italtile’s web platform is gaining traction, with customers getting quotes on the website and then going into the store for the actual sale.

According to CFO Brandon Wood, shoppers were also doing product research in-store and then ordering through its CTM brand’s online shop.

In the PwC survey, titled Total Retail: Retailers and the Age of Disruption, 64% of respondents noted the ability to see, touch and try on the merchandise before buying as the main reason for purchasing in-store after having browsed products online, while having the item immediately, and avoiding delivery charges were other key reasons.

The majority of South African online shoppers would be willing to pay extra for same-day delivery.

As consumers continue to develop their own approach to researching and purchasing products, both online and in-store, the environment for retailers has never been more complex. Achieving "total retail" to meet the needs of consumers requires retailers to think beyond channels.

According to PwC, retailers are faced with "waves of disruption". One of these is the evolution of the store which is continually adapting into something sleeker, more customised, and increasingly attuned to individual shoppers’ expectations of what the in-store experience should be.

Unilever-owned Magnum, launched pop-up café’s in markets like New York, Paris and Istanbul last year. The Magnum Pleasure store allows customers to create signature ice creams by choosing their own flavours and toppings. In SA, sales at the group’s Rosebank, Johannesburg outlet have risen by 12% weekly and revenue amounted to R40,000 per day. Despite long queues and the ice cream being priced at a premium of R40, the store’s success has proved that it is not only about the product but the customer experience.

The PwC survey cites mobile technology as another wave of disruption. Although a very small piece of the pie in terms of overall retail sales, it is increasingly a critical factor in setting the stage for a purchase.

Signs that social media interactions are driving consumers to buy products and services are also becoming clearer.

Nike engages the runner community through its Nike+ platform, an application for runners, that promotes interaction with other users and the company through features such as a running blog, mapping and sharing of runs and training with a running coach.

Demographic shifts are also altering retailers’ terrain.

Digital natives — the 18-24 age cohort that is the first group of adults to have grown up with the internet — are differentiating shopping behaviour.

"Global aging patterns show retailers can count on a large segment of global consumers who have a long track record of spending and intend to spend into the foreseeable future. At the same time, India and the nations of Africa continue to get younger, a polar opposite demographic disruption, but also one with positive ramifications for global retailers and consumer goods companies," said PwC.

Consultancy firm EY said earlier this year that redesigning an "omnichannel" supply chain had to be a priority for consumer goods companies and retailers if they were to remain relevant to both the consumer and their shareholders. Omnichannel is meant to engage customers and encourage a sale, whether a consumer is in a retailer’s store or using a tablet computer, phone or personal computer.