How retailers can keep their businesses relevant

While consumers wield their power in a golden age of choice, powered by the mobile phone and the global bazaar just a click way, retailers face technological upheavals that leave them constantly having to reinvent themselves. In emerging economies like South Africa, retailers are faced with slowing economies, drought, higher unemployment and the need to engage with their customers on broader societal issues such as inequality and sustainability. Retail and consumer CEOs are more connected than ever to their end customers.

This digital age necessitates that management adapt in how they interact with their customers and various stakeholders to build trust and engage more broadly on the positive impact they have on the communities in which they operate.

In PwC’s 2017 Total Retail survey – our most comprehensive to date, with more than 24,000 online shoppers around the world surveyed – we’ve found several areas of opportunities for retailers, even as the retail business model faces significant threats from a changing world.

According to Anton Hugo, retail and consumer leader for PwC Africa: “Competition remains fierce and focusing on cutting costs and organic growth alone is not enough. Retailers need to be innovative and invest in new markets, products and technologies that will give them the advantage over their competitors and allow them to connect with their customers.” In the online space, new entrants don’t require stores or warehouses; they can be based around the corner or on the other side of the planet. And pure-play online layers are popping up in every product category.

In this year’s study, we have added several new areas of research to explore how retailers can invest to stay ahead of the competition. The result is 10 investments that retailers can consider to keep their business relevant. These include investing in:

Their mobile websites

A higher percentage of our global respondents say they are shopping more frequently with their smartphone than with a tablet. For example, among weekly shoppers, more people are shopping with their mobile than with a tablet, 11% to 9%. The purchase journey for many consumers now includes the mobile phone as a triple threat: research tool, shopping device, and payment method. According to the survey results, more than half of South African respondents (56%) say they had paid for purchases using their mobile/smartphone; 57% had “researched products”, and 52% had “compared prices with competitors”. While the PC is still slight ahead with weekly shoppers at 16%, the gap is clearly closing and we anticipate that in a couple of short years the mobile device will become the preferred method of online shopping.

Invest in talent

The physical store isn’t in danger of disappearing any time soon. At the same time, the digital experience is important to consumers. Retailers need to consider both dynamics in their search for talent. For five consecutive years, our survey has shown that a significant percentage of global consumers shop in-store at least once a week. This year, the survey results indicate how important certain attributes are in relation to the in-store shopping experience. According to the survey findings, 78% of respondents (South Africa: 90%) stated that “sales associates with a deep knowledge of the product range” was the most important factor.

Another important factor for the in-store shopping experience, according to the respondents, is the “ability to check other store or online stock quickly” (Global: 68%; South Africa: 82%). Furthermore, the findings highlight the importance of staff and an indication that training store associates is well worth the investment. But store associates are just part of the talent story for retail investment as some retailers today don’t even have a significant physical store footprint.

Invest in big data

One of the top issues for retailers today is parlaying the enormous amount of customer data they generate into actionable insights. In a recent PwC/SAP retailer study, 39% of retailers say that creating value out of reams of consumer data is their biggest challenge. Huge gaps still exist today in the data retailers possess and their ability to glean insight from it. More than a third of retailers are struggling to implement a strategy to provide a single view of the customer.

Invest in the story – not traditional advertising

Increasingly, more of the global population isn’t attracted to traditional advertising – they want authentic information they can find at their fingertips – what are their friends doing, which brands are hot on social media, what is trending with their favourite influencers.

Consumers regularly use ‘traditional’ social networks such as Facebook and Twitter to find inspiration for their purchases (Global 39%; South Africa: 46%). The survey results show that consumers use social media as part of their shopping experience to read reviews, comments and feedback (Global: 32; South Africa: 56%). Social media also continues to be a major source of inspiration for the discovery of new brands and products (Global: 32%; South Africa: 55%).

Invest in more secure platforms

On the one hand, technology provides a lot of new, exciting opportunities for shoppers but, on the other, it also increases the risk for all kinds of cyber breaches, including data hacking. The survey results confirm that about two thirds of shoppers are concerned with having their personal information hacked while using their mobile phone. In some countries, this concern is greater than in other countries. For example, in South Africa, the Philippines, Singapore, Malaysia and Thailand around 80% of respondents are concerned, while in Belgium, France and Japan only over half are wary of cell phone hacking.

The take-away for retailers is that providing secure platforms for any touch point with customers is a must, Hugo says. Given the scale of the potential risk, secure technology and data systems need to be a C-level concern, and the focus should be on enhanced security systems, maintenance and updates.

Invest in keeping already loyal customers

We know from previous Total Retail surveys that almost all online shoppers belong to retailer loyalty programmes. But what else can retailers do to retain customers? More than 60% of survey participants say they like to shop based on brand loyalty rather than trying something new, with the top three countries being Japan at 83%, the US at 71%, and France at 71%. Reinforcing this loyalty by investing in uniquely appealing brand features – such as customised offers and special access to deals – could pay big dividends.

Invest in showrooms, not the entire store network

While the store is not going away anytime soon, its purpose is evolving. There is compelling evidence that people want the physical experience of trying things, but aren’t that happy with aspects of the in-store customer experience. According to this year’s survey, 68% of consumers want the ability to check other store or online stock quickly; and 59% want an inviting ambience.

Our research also shows that various product categories fare differently in terms of whether people prefer to purchase them online or in-store. Categories like books, music and games show a clear preference for online purchasing. However, for some product categories, such as furniture and homeware, consumers want to go to a store and look at and try the products.

Invest in the authenticity of branded goods

Authenticity of branded goods is a huge issue for retailers, particularly for products made and sold in developing markets or whose supply chains wind through developing markets. A large number of respondents are concerned that luxury products such as jewellery, apparel, and cosmetics sold online are not genuine – and therefore they don’t purchase these items online. The vast majority of respondents also prefer to buy luxury products from sites that sell multiple brands, presumably because these websites are broader, more well-known, and thus likely to be subject to more rigorous standards.

Becoming a healthcare provider

The levels of trust that consumers appear to have in receiving healthcare services from non-traditional providers was quite stunning. Fully 44% of our respondents would consider getting a minor ailment diagnosis at a retail store or pharmacy, 30% would have an echocardiogram at home via their smartphone, and 25% would consider getting an MRS, ultrasound or X-ray at a retail store or pharmacy.

In another finding with healthcare implications, 47% of our global sample say they own or intend to own a wearable device.

This article was originally published by PwC.