Retail is reinventing itself

by Dave Nemeth. Mall exhibition spaces are one of the most exciting retail developments this year, as the retailing sector reinvents itself for a Covid-cautious world. Time stands still for no one, and six months into 2021 we take a look at what has changed, or hasn’t, within the retail landscape in South Africa. We are officially seeing the third wave of the dreaded COVID-19 virus and mass vaccination rollouts still seem to be a long way off. Covid will remain with us for some time to come, so, it is unlikely that trading conditions are going to get much easier.

One positive factor is that the rand is at its highest level in several years. While this is fantastic news for retailers which rely on imports, getting stock into stores remains a challenge. Due to the slowdown of global economies, there is an international shortage of shipping containers which continues to play havoc with retailers’ supply chains. Lockdowns created a massive slowdown in getting containers back to China and other key manufacturing regions, and it is uncertain as to when the situation will revert t to some form of normality. There is a lot of talk locally about improving the sourcing of local products, but this is also marred by the increase in load shedding that is as unpredictable as the weather.

CNA was in the news again. It was reported on June 8 that the 125-year-old business had been placed in business rescue. All reports state that the poor sales and the inability to pay landlords, as well as their suppliers, is mostly due to the pandemic. There seem to be a host of other negative factors which have plagued the business, including an outdated stock assortment as well as infighting amongst shareholders. CNA has around 160 stores. PNA, on the other hand, have been quite aggressive, and it was announced in October 2020 that the chain would continue increasing its footprint by taking the number of its stores to a total of 95. I am not convinced that the current CNA scenario will be attractive to investors and I can’t foresee its survival in any shape or form, which is a sad reality for this iconic brand.

New store concepts

One of the retail highlights was the opening of We are EGG in Cavendish, Cape Town. This is a completely new and forward thinking retail experience and the brainchild of Paul Simon, who created YDE, and Arie Fabian. The concept makes it appealing for new and up and coming brands to afford physical retail space, and the entire concept is backed up with some innovative technology. They have a fresh approach and a unique business model which does not tie tenants into long term leases. This is something which is much needed but could also backfire under such tough trading conditions. The strength will lie in the fact that the business is pliable and changes will be able to be implemented speedily. This is something with which other larger retail groups have battled over the years. I really do think this new business model is a step in the right direction and look forward to more national rollouts.

The pet market seems to be on the radar as a key retail category, and we are seeing an increase in pet stores, especially in shopping malls. Shoprite has clearly been following this trend and announced on May 11 that they were launching their own stand-alone pet stores, as they opened the doors of their first Petshop Science store in Fairbridge mall in Cape Town. West Pack have also expanded into this market with their Petzone stores and they already have over 30 outlets.

TFG, which recently bought the JET chain from the Edcon Group, has announced that they will be relaunching Jet Home to compete with Pep Home and Mr Price Home. The plan is to open the Jet Home stores as stand alone stores rather than having an assortment of homeware in existing stores, which is the route which has been taken by Woolworths over the years. However, Woolworths are also not sitting still and have just launched their very first stand-alone bottle store. This is something which most of the larger retail brands have been doing for years. The WCellar stores will have an in-store Sommelier to assist consumers, with the aim being to create a new experience for those with a more sophisticated palette, whilst helping those who just want to expand their knowledge, and experience new selections of wine. The first store opened in Bryanston, adjoining the Woolworths Food Market situated at the Nicolway Shopping Centre.

Mall exhibition spaces

Shopping centres, which are still struggling, are desperately searching for ways to attract back much needed footfall, in order to make the various locations a viable proposition for tenants. Sandton City is experimenting with an exciting space which can be used to host a variety of events, markets, launches and even exhibitions. This is an exceptionally clever move, with the exhibition industry still prohibited from trading. It is only logical to explore this concept within a retail space where the restrictions on footfall are not as prohibitive. On the fun side of things, Sandton City have also launched a drive-in cinema, utilising the upper parking lot, thereby creating a new stream of revenue. This is not a completely new concept, and only time will tell how viable the model proves to be. Regardless of this, it is exciting to see new initiatives being tested.

Digital retail innovations are also happening, and Grohe South Africa has just launched their fully immersive 3D digital showroom, following on the success of the Cobra digital showroom, which launched late last year. Both brands fall under the Lixil group and are certainly leading the way forward in innovative digital retail technologies. Although the retail landscape does appear to be showing some signs of innovation and new directions, the momentum will have to be maintained if brands want to survive in these unchartered waters.

Main image credit: Sandton City.

Retailing Africa’s retail analyst and columnist, Dave Nemeth is the founder of Trend Forward; and a design thinker, innovator, business re-designer, trend analyst, keynote speaker and writer.

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