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#CoronavirusSA: CX a key differentiator – 8 May 2020

Customer experience and retailer good governance will become a major factor in whether retailers live or die during this time in history; while leading US retailers file for bankruptcy protection.

Customer experience and retailer good governance will become a major factor in whether retailers live or die during this time in history; while leading US retailers file for bankruptcy protection. Retailing Africa launched its COVID-19 news tracker for the retailing eco-system in South Africa and Africa mid-March; and will be continuing to update our readers with relevant news for our brands and retailers each week of this pandemic.

FRIDAY, 8 May

Consumers on the lookout for good governance

Retailers must consider new customer priorities as COVID-19 accelerates digital transformation, Deloitte and BrandsEye reported. For South Africa’s grocery retailers, COVID-19 will drive significant changes in customer experience, supply chains, health and hygiene, and employee engagement, according to the Deloitte Consumer Sentiment in Grocery Retail report, produced in partnership with data firm, BrandsEye. The report collected 552,927 social media mentions, of which 123,914 pertained to COVID-19 in the period before (9 – 26 March) and during (27 March – 30 April) the national lockdown. Just over 77,680 mentions were processed by BrandsEye’s Crowd of human verifiers for sentiment analysis. Consumer sentiment and priorities have shifted over time. Sentiment towards retailers has worsened over time from -8.3% to -13.3%. Prior to lockdown, concerns centred around in-store health and safety measures. After these measures were adopted, they were welcomed, but once the lockdown began, consumers shifted concerns towards pricing and paid close attention to how retailers were treating their staff. Those retailers which implemented relief and other measures to protect staff saw higher levels of positive sentiment.

BrandsEye CEO Nic Ray noted that, “There has been a heightened sense of consumer awareness about retailers’ conduct in the market. This trend presents a new reputational risk that demands retailers keep their finger on the pulse of consumer sentiments. Consumers feel empowered to voice their concerns online and are taking note about which organisations are adopting new CSI initiatives, implementing measures to protect staff health and income, and which executives have taken pay cuts. The growth in online conversation, particularly as people spend more time on digital channels, also presents an opportunity for retailers to boost service on these channels and alleviate the increased demands their agents face in-store and at call centres.”

According to Rodger George, consumer services leader, Deloitte Africa, “Retailers should take advantage of new learnt behaviour through the COVID-19 crisis. Lessons learnt through the transformation of supply chains, the creation of stronger links between physical and online channels, staying true to brand purpose and focusing fanatically on customer loyalty, are some of the key factors that must be hardwired into the upgraded DNA of the new retail organisation. Tough economic times make it difficult for retailers to offer a unique customer experience but it’s simply not worth it to trade this and customer loyalty off for short-term financial gains.”

In uncertain times CX is a key differentiator. Customers responded favourably to in-store experiences that ensured social distancing and safety measures for both staff and customers. The retailers that delivered effective online sales also generated positive feedback.

THURSDAY, 7 May

Neiman Marcus files for bankruptcy

Luxury retailer Neiman Marcus, founded in 1907, has filed for Chapter 11 bankruptcy in the United States to allow it to restructure and alleviate debt, becoming the first major department store in the US to do so following on the economic devastation as a result of the coronavirus pandemic. Only six months ago, the CEO, Geoffroy van Raemdonck – only a year at the helm himself – hired a new team of executives to support the company’s transformation into a “retail theatre” of experience at some of its 43 stores. The New York Times reported that in a letter to customers, Van Raemdonck emphasised that the business was not liquidating and that it planned to reopen stores once it was safe to do so: This is simply a process that allows our company to alleviate debt, access additional capital to run the business during these challenging times, and emerge a stronger company with the ability to better serve you and continue our transformation over the long term.”

WEDNESDAY, 6 May

PUMA reopens offline and online

PUMA has re-opened stores around South Africa with winter essentials and footwear for sale, while PUMA’s ecommerce store is open for purchase and delivery of items marked Winter Gear. “Our bricks and mortar stores have re-opened and will have all winter gear for sale, including footwear. We are observing all protocols to make customers feel safe when shopping in our stores,” said Brett Bellinger, PUMA SA marketing director. “The ecommerce store is open for purchase and delivery of winter gear items for those who want to maintain social distancing during this time. We are running regular promotions on items in-store and on our ecommerce site.” Safety precautions in-store include hand sanitizer available at entrances, staff wearing masks and other protective wear, while customers are encouraged to pay with card or other contactless payments to avoid contact with cash.

BAT withdraws legal challenge

BAT tobacco dropped its threat to go to court if Government did not reverse its decision to ban the sale of cigarettes under Level 4 #lockdownSA; contradicting an earlier announcement by President Cyril Ramaphosa. Instead, BAT said it would enter into discussions with Government around the matter. Clearly there is much horse-trading and deals being made behind the scenes. Meanwhile the illegal trade of cigarettes is thriving, according to media reports.

TUESDAY, 5 May

J.Crew enters bankruptcy

American apparel retailer J.Crew Group became the first major US retailer to file for bankruptcy protection. The retailer already had a debt load of $1.7 billion, reported Risnews.com. With stores on temporary closure due to the pandemic, Forrester predicted that global retail sales will most likely decline by an average of 9.6% globally this year, which amounts to losses of $2.1 trillion. J.Crew Group has 181 J.Crew stores, 140 Madewell stores, and 170 factory stores, as well as its various branded online operations.

MONDAY, 4 May

Tobacco producers head to court

Government is not budging on the sale of cigarettes under Level 4 lockdown and both Minister in the Presidency Jackson Mthembu and Justice Minister Ronald Lamola have both said over the long weekend that this is not even a matter for mediation, but will face down the tobacco producers in court should they proceed with threatened legal action. Last week British American Tobacco (BAT) gave Government until 10am this morning, Monday May 4, to reverse the ban on the sale of tobacco products under Lockdown 4, or they would bring court action to have the ban overturned.

Consumer sentiment turned ugly last week after President Cyril Ramaphosa had announced that cigarette products would be for sale under Level 4 of lockdown; which was then contradicted by co-operative governance minister, Nkosazana Dlamini-Zuma last week, when announcing final regulations for Level 4.

Lockdown sales of illicit cigarette costing SA R36 million per day and it has been pointed out that SARS is losing billions due to the ban on tobacco and alcohol sales. Tobacco Association goes to court on Monday

Burger King delivers, Nando’s remains under lockdown

Burger King has announced that it will be opening select restaurants around the country to deliver its full menu locally as of Wednesday, 6 May 2020. This service will be launched in partnership with Mr D Food and Uber Eats. Ezelna Jones, group marketing executive at Burger King, says 33 Burger King restaurants in urban areas offering delivery services between the hours of 9am and 7pm. “In line with global hygiene best practice, we will be ensuring that all managers on duty conduct regular wellness checks, including temperature taking for each team member before every shift. To ensure good personal hygiene habits, all Burger King team members are now required to wash hands every 30 minutes at a minimum, as per coronavirus (COVID-19) spread prevention guidelines.” Additional safeguards, such as all Burger King restaurant managers using a unique COVID-19 Prevention Checklist and implementing associated contactless processes to ensure all team members continue to adhere to the new procedures, have also been introduced, explains Jones. “Unfortunately, due to the poor financial viability of only offering a home delivery service, coupled with the 8pm (Level 4) curfew, only a few Burger King restaurants will be open for deliveries at this time,” notes Jones, who says that the list of select restaurants available to offer home deliveries can be viewed on the company’s website and social media platforms.

It is for this reason that popular restaurant franchises like Nando’s and Spur will not reopen under Lockdown Level 4. Both said it did not make economic sense to reopen when drive-thru were closed for fast food collection and delivery only was an option under a strict curfew. Nando’s is only opening a small number of stores to enable their kitchens to serve food in disadvantaged communities.

Droppa Express launches

Droppa, the digital platform that provides transport delivery solutions has expanded its service offering with the launch of “Droppa Express” which offers express delivery for light-weight items within a 25 km radius in just 24 hours. The express service which caters for the delivery of goods such as food, parcels, books, stationery and other smaller items under 25kg is available in Pretoria, Johannesburg, Cape Town and Durban – at an affordable rate. Delivery bookings can be made through the company website or Droppa app which is available as a free download on Android and IOS platforms. “Droppa is continuously looking to enhance current service offerings or to introduce new ones that meet the requirements of our customer base across South Africa’s four major cities” says Khathu Mufamadi, Droppa CEO.

Earlier this month, the on-demand e-hailing app also announced that it is shifting the focus of their business model in response to the new COVID-19 lockdown imposed by the government. The company’s original operating model allows patrons and businesses to request a truck/ bakkie for all furniture removals and logistics, also operates in Cape Town, Johannesburg, Pretoria and Durban. Droppa now also offers its services to businesses rendering essential services such as retail stores, warehouses, fresh produce farms, medical suppliers and will be made available to members of the public who require essential goods delivered to them. In a similar way to Uber, Droppa does not own trucks but instead has driver-partners that have registered their vehicles.

 

FOR MORE:

#CoronavirusSA tracker: Level 4 brings small relief to retail – 30 April 2020.

#CoronavirusSA tracker: Further clarification on essential goods – 20 April 2020.

#CoronavirusSA tracker: Business pushes back – 13 April 2020.

#CoronavirusSA tracker: #Standingtogether – 7 April 2020.

#CoronavirusSA tracker: Shoprite & Pick n Pay win week: Spar’s brand fail – 27 March 2020.

#CoronavirusSA tracker: Fear and loathing in SA – 20 March 2020.

 

*Curated and edited by Retailing Africa Publisher & Editor, Louise Burgers. Keep the industry updated and send your announcements and news to: news@retailingafrica.com.

 

Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.

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