At TomorrowToday whatever we talk about is done so within the context of how the world is changing. There has been much written about this within the TomorrowToday stable. About how technology, institutional change, demographic change, the economy and social value system change is impacting the world of work. No industry, like no country, is immune to this change. Whether you work in professional services, banking, insurance, manufacturing, even agriculture your businesses as you knew them are under threat. What I am always interested in is how this impacts people. Whether that means your employees or your clients, customers, guests or even patients. In this article I am going to focus on the retail industry; and particularly how mobile and other internet based marketing and buying might impact a) the in-store approach and b) I would like to consider why people would even consider to continue to go in-store, when on-line is often cheaper and more convenient.
The majority of retailers who have shop floors, show rooms and real-life, experiential stores are expected to go on-line (if they have not already) in the very near future. As internet-based retailing is set to expand, there is an expectation that in-store shopping shall become less and less commonplace in all retail environments all over the world. The popularity of on-line shopping is growing exponentially everywhere and South Africa and Africa are no exception. Africa is an important market for South African retailers to consider, as this is the great-untapped market on our doorstep. All South Africa’s biggest grocery retailers are investigating and already moving into Africa. Shoprite, for example opened a store in Kinshasa in the Demographic Republic of Congo, Pick ‘n Pay has stores in Mozambique and Mauritius, Spar is in Zimbabwe and Woolworths has outlined plans to double the number of its stores on the continent to 104 over the next three years.
Initially South African consumers possibly had concerns about the safety of on-line shopping, not wanting to part with their credit card details in cyber space. But as more trust is built, because security violations are the exception rather than the rule, the convenience of on-line shopping prevails. There are an ever-increasing number of people shopping on-line in South Africa and other parts of sub-Saharan Africa, as the Internet is becoming increasingly accessible in the South African and African markets from a cost and availability perspective. According to the International Telecommunication Union, e-commerce activities have increased dramatically particularly in South Africa, Nigeria and Kenya. In South Africa, 51% of people with Internet access shop on-line. Inside the three African countries mentioned above, the number of people with mobile phone subscriptions has now topped 87 million. It would be unwise for any retailer to not engage with their customers on-line, both from a product purchase point of view, from a product offering point of view and from a customer satisfaction point of view. Using the internet and the extraordinary tools it provides, which allows us to communicate globally, quickly, conveniently and transparently, must be a given for retailers especially, who want to maintain relationships with their globally spread consumers.
The bottom line is, on-line shopping is not only massively convenient because you can do it at any time of the day or night, but you do not have to deal with long lines at the pay till; and crowds of people in shopping malls, as well as the lack of parking. When you buy on-line, you generally have the goods delivered to somewhere convenient to you (maybe even your front door), it usually takes less time than expected; shipping is getting cheaper (or in some cases is free); and for most retailers, the return policies are good, reliable and fast. There is also an increasingly wide variety of product offerings on-line, from books, music, clothes; and cosmetics to groceries, cars and even houses as well as furniture. There is also a growing second hand trade, where used products in good condition can by ‘recycled’, which popular amongst environmentally-minded people and those whose budgets don’t always stretch as far as brand new.
There are other less obvious (at the moment) global, social, economic and demographic trends that are influencing on-line shopping, which are only supported by the technological tools afforded to us in the 21st century. As the world tips from being primarily rural to being primarily urban; and thus as mega cities grow up, there simply will not be space or time for us all to shop in stores. As the world’s workforce tipped from being primarily female in terms of numbers, female dominance in retail spending will increasingly become a trend to watch since they are expected to add about a billion world-wide spenders in the coming years (and yes, women do spend differently to men). Generation Y are growing up and entering the workplace; and so now not only will they continue to influence their Boomer parents spending patterns, but increasingly they will have their own money to use. They are a complicated and interesting consumer, what we call the ‘ethical consumer’ where they care less about what you sell and more about who you are; and they can because they are buying in a world where both local and international competition for all products and services is the norm and they have the tools to know a lot about your brand. Choice is what largely defines this generation, who are powerful not only because of their numbers, but also because of them being the ‘digital native’ generation. If all their friends live inside their computers, which they do, it stands to reason that their favorite shops will too. The big thing to note about Generation Y is their need to be connected. They will want to be part of whatever global trend is happening and passing with lightening speed, the trend that defines their social identity, a trend that is stylish but can be consumed relatively cost-effectively. The retailers’ lesson in understanding Generation Y is: never make any assumptions about them or think you understand them, always ask before you decide.
But one of the real benefits of on-line shopping is that it gives consumers unprecedented power when it comes to product knowledge and the ability to talk about their likes and dislikes regarding a retailers’ service. There is huge consumer-muscle in what is called the shift from ‘word of mouth’ to ‘world of mouth’ commentary about your brand. No longer can smart-talking sales people con one into purchasing a product one knows nothing about. No longer can big brands spin consumers stories about who they are, or what their manufacturing, employment or import policies are. Consumers have information about both products and services like never before, as well as ethics, environmental policies and customer satisfaction, which they can access on-line.
But none of these observations about the trends and benefits of on-line shopping is to suggest that the store, the high street, the strip mall, the shopping mall, the market place is dead. Despite the fact there is an increasing number of on-line retailers who have used the Internet to ‘cut out the middle man’, like carfind.co.za in South Africa; and amazon.com and zappos.com out of the United States of America, for some consumers, going and test-driving a real live car, or having a cup of coffee and reading a book inside a bookstore or going and trying on shoes in a shoe shop, is an experience they will never want to replace. The experience is tactile, the interactions inside the store are important and the sense of connectedness is essential for some. In fact, Forrester Research, conducted in the United States, showed that whilst on-line purchasing is on the increase (primarily for small-ticket items), retailers that predicted most growth over the next year would be those with both an on-line and off-line (store) presence. However, what is interesting is that in terms of customer satisfaction, there was just over 80% satisfaction amongst those who only purchased on line, whilst that consumer satisfaction dropped to just over 60% satisfaction for those who researched on-line and then went to a store to purchase goods. It is obvious then, that for most retailers, their website is very important, but so is the training they offer those representing their brand in store.
Some lessons for retailers:
- Retailers must have an on-line and off-line presence, to accommodate varying shopping styles, focuses, affordability and accessibility (especially in South Africa and Africa).
- Retailers must ensure that their on-line presence is easy to access, uses words efficiently so that their presence remains high in Google’s list if priority sites; and that the retail site provides for two-way dialogue between themselves and their consumers.
- Retailers must ask themselves why consumers would want an in-store experience?
The last point is an important one to consider, especially in South Africa. What would entice me, the consumer, to go in to your store, whether it was to buy electronic goods or food (and a note for big grocery retailers, there is an ever-increasing trend for people to purchase food on-line from ethical food growers and organic producers)? Especially true for larger ticket items but true for even small ticket items, there are so many stores to choose from, why would I choose your brand?
The answer lies in your employees and how well they connect with me the consumer in whatever way suits me, the consumer. Not just by being efficient or even friendly, but by truly understanding my needs. All employees who represent your brand therefore need to learn how to solution sell, and all employers should be aware that in order to create a culture of loyal employees who love promoting your brand need to belong to an internal community within your organization, no matter how large it is.