Covid-19 has shifted the world into the next normal, with new consumer behaviour emerging in response to the changing dynamics of the pandemic. To keep up, South African retailers should embrace a multi-dimensional retail approach that connects the dots between digital and in-store experiences.
In this market, a one-dimensional approach may not be enough to ensure growth and profitability for a retailer, says Sumay Dippenaar, General Manager Marketing of Capital Connect - South Africa’s Retail Business Funder of the Year 2021*. To stay in and win the fast-changing retail game, business owners need to be agile and adapt to shoppers’ appetite for new, memorable, entertaining and multi-dimensional retail experiences.
E-commerce in retail
Dippenaar says the accelerated growth of e-commerce during the lockdown is one factor that has changed the face of the retail industry for good. According to recent statistics°, South Africa’s e-commerce market is currently estimated at just under R200 billion and is expected to grow to R400 billion by 2025 – this means retailers with no digital or e-commerce approach risk losing out.
“As we can see from the proliferation of delivery scooters since the start of the pandemic, many consumers have now become accustomed to the convenience of online ordering and fast home delivery,” says Dippenaar. “At the same time, after spending a lot of time in their homes over the past two years, consumers are now looking for retail destinations that can provide them with convenience of basic goods and services, entertainment, and a memorable shopping experience.”
The customer journey is changing
Dippenaar points out that customer journeys are becoming more complex, since consumers don’t necessarily start and finish their journey in one channel. Retailers should aim to offer a true omni-channel shopping environment that offers consumers flexibility, choice, and a consistent experience, irrespective of the channel they use. Ultimately, omni-channel trade is the future of retail.
“Consumer behaviour is evolving as smartphones become our shopping companions in-store and at home,” says Dippenaar. “Some consumers prefer to shop online and collect their groceries in-store. Others, however, like to browse online, visit the physical store to experience the product, but still opt for an online purchase due to price differences for online and in-store purchases. Retailers that can accommodate these diverse shopping preferences will indeed win the most business.”
Destination shopping is key
“Another trend we can expect to accelerate in the months to come is the blurring of lines between retail and other industries. Whether it’s restaurant chain products available in retail shops, or hardware retail stores selling services such as home installation, DIY workshops or cooking classes in-store. It’s these forward-thinking business owners who will find new revenue streams and ways to add value for the shopper,” Dippenaar says.
“To attract shoppers to physical stores, retailers need to offer multisensory, in-person experiences that can’t be duplicated online,” says Steven Heilbron, CEO of the Connect Group of companies. “They should let customers see, smell, taste, touch and feel products, and get up close and personal with them.”
Heilbron says these forward-thinking retailers are, in fact, investing today to position themselves for the post-pandemic world - the next normal. Today, the funds retailers require to pursue growth opportunities are accessible from innovative fintech providers, like Capital Connect, for example. Retailers can access short-term, unsecured business funding up to R5 million in just 24 hours, with attractive daily repayment terms. This hassle-free business funding is made easily accessible to retailers, allowing them to simply apply on an app and get the funds in their bank account the next day.
“We are moving towards a world of multi-dimensional retail, where retailers compete not only on product range, price, location and channel, but also on experience,” says Heilbron. “Retailers that embrace multiple channels and invest in new revenue streams will see an increase in wallet share, as well as a boost in sales and profits.”
*Fintech Awards 2021 South Africa (Wealth & Finance, AI Global Media Ltd) - Capital Connect is recognised as South Africa’s Retail Business Funder of the Year in the 2021 Fintech Awards -providing retailers with quick access to business funding in just 24 hours, allowing retail merchants to capitalise on business opportunities.