Q&A: The winning formula for retailers – WTSA report

Shopping via retail apps is rising in South Africa, expediting ecommerce growth, says Parusha Partab, group strategy director at Wunderman Thompson South Africa.

The future of retail is steadfastly being shaped by digital, as shoppers envision a future where nearly two-thirds (64%) of their shopping will be online in the next 10 years. As the landscape shifts, successful businesses consciously adapt to the new era of digital technologies and economies, according to the extensive Future Shopper Report 2023 by Wunderman Thompson, which surveyed over 31,000 consumers worldwide, online shopping continues its dominance, accounting for 58% of all spending today.

In South Africa, the survey findings are equally illuminating, with nearly 90% of respondents indicating their increased comfort with various digital technologies, including utilising apps to their full advantage, attending video-conferencing meetings, and seeking information on websites. This significant digital adoption aligns seamlessly with the growth of e-commerce in the region, says Parusha Partab, group strategy director at Wunderman Thompson South Africa.

What are some of the key consumer shifts observed in South Africa?

Prior to the Covid pandemic, South Africans were gradually embracing online shopping for essential commodities, groceries, fashion items, and ever-increasingly for financial transactions. However, the lockdown measures expedited this process exponentially, with profound implications for businesses, branders, and marketers. Working from home (WFH) may also be impacting purchase behaviours, with 71% of South African respondents saying they have shopped more online due to WFH, and 76% stating they have discovered new brands and retailers due to WFH. Nevertheless, the e-commerce strategy in South Africa is influenced by traditional shopping habits. The convenience of browsing in shopping hubs and shopping malls, comparing goods and prices in physical stores, has shaped consumer behaviour. Recognising this, successful brands and marketers embrace omnichannel strategies to align with South Africans’ blended online and brick-and-mortar shopping preferences. Perhaps predictably, 40% of consumers still prefer to browse physical stores for inspiration and comparison, but online adoption and behaviours are undeniably on the rise. Approximately one-third of shoppers now seek inspiration from retail store apps, while marketplace online sites such as Takealot, Amazon, and Makro capture the attention of nearly 50% of consumers.

How are retailers capitalising on these shifts?

In this shifting landscape, retailers that offer a seamless shopping experience, delivering a comparable or superior shopping basket with greater cost-effectiveness and speed, have become favoured by customers. They have set a new standard of service excellence, making South African shoppers aware that exceptional service should be an expectation across all their favourite brands. Of course, the empowered South African shopper now demands better prices, free delivery, and fast and convenient experiences from online marketplaces. Moreover, marketplaces that have proven themselves with a track record of offering “cheaper, faster, better” options have gained the trust of 70% of respondents. Additionally, consumer purchase decisions are increasingly influenced by recommendations, highlighting the importance of integrated communication strategies and relevant social and digital support for e-commerce platforms. The power of social media platforms, particularly live shopping events on platforms like Instagram and TikTok, has significantly accelerated online shopping behaviour.

What is the main takeout from the research for the SA market?

As distribution and supply chain strategies are reimagined to accommodate the new marketplace, investments in appropriate technologies become crucial, marketing models must evolve to compete effectively, making e-commerce and digital communication strategies pivotal to success. To thrive in today’s omnichannel retail landscape, brands, marketplaces, social media platforms, search engines, and physical retailers must adopt a winning formula. This formula requires balancing the right price, delivering exceptional service, and providing a seamless shopping experience across every channel and device. Brands and marketers must embrace this digital revolution, incorporating e-commerce and digital communication strategies into their core practices.

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