Ka-ching: retailers poised to cash in on SA's changing shopping habits

Retailers that more effectively integrate the customer experience from brick-and-mortar with online are best placed to secure a bigger slice of the festive season consumer spending pie this year.

That’s one of the key lessons from a study of South African shoppers by Deloitte South Africa.

“Convenience‚ sales and bargain hunting‚ product comparison‚ price comparison and product information research are the main factors driving online engagement for consumers‚” said Dylan Piatti‚ a senior chief of staff for the global auditing and business advisory firm in South Africa.

He said online shopping is gaining popularity‚ thanks to the ease of access to product information‚ deal searching and 24-hour shopping practicality.

“While we do anticipate an upswing in local online sales‚ this contrasts with the extent of US levels where online channels are set to make holiday history‚” said Piatti‚ who specializes in African consumer and industrial products.

“Although online sales have increased year on year‚ it remains a smaller share of the market. Overall‚ we expect online retail sales to exceed 1% of total retail sales for 2016.”

While this figures may seem low‚ bricks-and-mortar it would be a mistake for retailers to discount the influence of the Web‚ Piatti cautioned.

He cited the company’s survey of South Africa shoppers which revealed that the customer experience was evolving into a true blend of digital and physical purchasing behaviour.

“30% of South African respondents indicated they were likely to engage in ‘showrooming’‚ where they visit a store to pick out an item‚ but then search for the best price and make the purchase online.”

He also identified another trend‚ “webrooming”‚ whereby shoppers first look at items online‚ visit a store to see them‚ and finally make the purchase in-store.

“Customers who view products online and go in store to make the purchase will be easily frustrated if products are not available‚ and more likely to switch to a similar supplier nearby.”

They may also opt not buy at all‚ or purchase a different item. Either way their trust in the retailer will have been negatively impacted.

“If online retailers leverage effective strategies to respond to showrooming behaviour – for example where consumers can actively seek out bargains‚ buy them on sale and use their loyalty points to do so – they could capture a larger proportion of sales from… and grow online shopping trust in the consumer.

“Retailers that more effectively integrate the customer experience from brick-and-mortar with online‚ may secure a larger portion of consumers’ share of wallet this festive season.”

Piatti said companies such as Spree‚ Zando‚ Takealot‚ Superbalist and Yuppiechef were in a strong position to take advantage of this increased online engagement.

“The challenge will be to continue to meet consumer expectations in the busy December period‚ especially with product availability‚ efficient delivery and return systems‚ well communicated promotions and sales‚ and high levels of customer service.

“It will also be interesting to see if there are any after effects in sales from the Black Friday and Cyber Monday hangover‚” Piatti said. - TMG Digtial