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Key Tech Trends That Will Affect The South African Retail Landscape

Key Tech Trends That Will Affect The South African Retail Landscape

12 October 2016

As published in the POPAI What’s in-store Magazine

-By Itumeleng Mokgadinyane, Strategist at Y&R’s Labstore South Africa

South Africans famously love both their shopping malls and their phones. Even in a bricks and mortar world, there is no doubt that technology is changing shopper behaviour – but what should marketers be paying attention to as the end of 2016 draws near? Here are four technology-led trends that will undoubtedly influence the retail landscape in the foreseeable future.

1. Mobile Geo-targeting

Mobile geo-targeting is the next big opportunity for bricks and mortar stores in the quest to adapt to evolving consumer needs and behaviours in the retail environment. Geolocation involves identifying the real-world geographical location of an object through GPS tracking or built-in data transmitting abilities of a smart device. Shopping malls and public spaces that offer free Wi-Fi services determine device location by wireless hotspot identifiers. A mobile geolocation identifier then locates a device’s position and reports it to ad servers. Once these geolocators have identified a device location, retailers and brands can utilise information to prompt relevant consumers who are in the right needs state, based on their own location. Tailoring specific offerings to shoppers in the vicinity of the stores will allow brands to maximise their relevance, increasing footfall and basket size.

Waze, a community-based traffic and navigation app, has successfully embraced brands on their platform where location is used as a point of promotion and awareness. This undoubtedly heightens brand and product relevancy for consumers regarding proximity – giving a whole new meaning to convenience.

2. Web Vs App

Another trend of particular relevance to retailers and brands is wonderfully captured and articulated by Internet entrepreneur, Chris Dixon, in his article The Internet Economy. He writes: “The mobile web is arguably in decline: users are spending more time on mobile devices, and more time in apps instead of web browsers.”

The recent PWC 2016 Total Retail global survey supports Dixon’s sentiment. The study surveyed approximately 23 000 online shoppers (including South Africans) about issues ranging from mobile shopping, to social media influence and innovation in retail. In this survey, 34% of shoppers agreed with the statement “My mobile phone will become my main tool through which to purchase items.”

It’s hardly surprising that many retailers and consumer brands have invested heavily in their digital ecosystems and development of mobile apps to take advantage of this trend. It also offers benefits like secure transaction facilities, measurable consumer purchase and shopping behaviour, and freedom from constraints of regular operation hours.

With that being said, however, South Africa is a market only just getting to grips with its digital possibilities. Tim Barret, Euromonitor’s Retailing Analyst, suggests that mobile commerce may be the future, but that it is too early for app-only strategies.

3. Social Media In The Path To Purchase

By now, social media has become a comfortable inclusion in the marketing mix for South African marketers – from building relationships through brand communities, to using influencers to help spread the word and to foster credibility. Brands also use social media to raise awareness around special offers, much as they would by using conventional ATL channels like radio and TV. Innovation in the application and use of social platforms in the field of shopper marketing is quickly becoming a valuable tool in cutting through the existing social clutter. Brands need to be heroic and brave in order to learn to stay ahead of the curve on every platform or emerging network. The underlying trend here is that social media is moving towards video, and that brands need to be agile in responding to this megatrend, regardless of the amount of users on a platform at that particular moment in time.

4. Interactive Television

New functionalities are turning televisions from passive, one-way devices into interactive tools capable of going online, accessing social media sites and interacting with content in real-time. These smart TVs are retailing at reasonable prices in South Africa, and many households have taken up the new technology. The smart sets complement home entertainment systems and digital set top boxes. According to AMPS 2015B, more than half a million individuals are accessing the Internet from home using ADSL, which further suggests that local homes are becoming increasingly connected.

The next big opportunity will be how brands and agencies leverage connected smart TVs and how we facilitate interaction with content. Imagine the possibilities if local consumers are able to click, view or buy products on-screen while watching their favourite content, which would be delivered straight to their doors.

The local South African retail landscape is unique in the sense that audiences are incredibly diverse and require different needs to be fulfilled depending on where on the consumer segment spectrum they sit. Pressured economic times also pose a challenge, as it forces retailers to be agile and to continuously seek innovation through their offerings and technologies to meet evolving consumer realities and demands. Identifying the right technology and driving tech innovation will afford retailers areas of growth within markets they many have not traditionally traded in. The future is fast approaching – let’s be equipped with the tools and trends to maximise a connected South Africa.