Stocktake: Shoprite X redefines retailing
Retail innovation accelerates as retailers prepare for retail growth in the coming year as societies begin to normalise.Thursday, 02 Sep 2021
Retail innovation accelerates as retailers prepare for retail growth in the coming year as societies begin to normalise with access to vaccines; brands prepare for a return to in store shopping by frustrated consumers bored with being home all the time; and the world’s biggest retailers consider chartering their own container ships to speed up delivery ahead of Christmas.
New Shoprite digital business unit innovates
The Shoprite Group has launched its new, innovative digital business unit, ShopriteX which is combining data science, technology and innovation with its operational strength to provide increasingly enhanced customer experiences. Incubated over the past year, ShopriteX aims to create more personalised shopping experiences for customers. ShopriteX already delivered two industry-leading innnovations – Xtra Savings, South Africa’s fastest-growing rewards programme with 20 million members to date; and Checkers Sixty60, the first on-demand 60-minute supermarket grocery delivery service in South Africa. “We are serious about being Africa’s most customer-centric retailer, and the launch of ShopriteX represents our investment in fit-for-the-future precision retail, which is increasingly digital and data-led,” says Pieter Engelbrecht, CEO of the Shoprite Group.
At the ShopriteX offices above the new Checkers Hyper Brackenfell flagship store next to the Group’s home office, the division’s 250-strong team, including data science, ecommerce and personalisation experts, is working side by side with Shoprite’s IT team (combined a team of over 1,000 people), to create and implement new innovations. The new offices are also home to the latest retail innovation, Checkers Rush, an automated, cashless “no queues, no checkout, no waiting” concept store, where employees can grab products and walk out. Using advanced AI camera technology to identify the products being taken off the shelves, Checkers Rush bills users’ bank cards upon exit. This is one of numerous digital innovations under development. “The next era of growth for us is about precision retailing. ShopriteX will use our rich customer data to supercharge a ‘s marter Shoprite’ and ultimately fuse the best of digital with our operational strength across the continent,” Engelbrecht said.
TV consumption becomes more fragmented
There are strong indications that analogue and DTT homes are supplementing their viewing with non-broadcast content as more streaming media channels become available to South Africans. The stay-at-home lockdown that the country has been under over the past 18 months has accelerated this trend as families seek more home entertainment. In the beginning of 2021, The Broadcast Research Council of South Africa (BRC) announced its intention to commission a more comprehensive TAMS (TV Audience Measurement Survey) audit due to rapid changes in the video viewing landscape, a rise in zero ratings, loadshedding and greater challenges faced by technicians servicing the TAMS panel due to COVID-19. While the audit is currently being conducted, the first interim report has already been received.
As the market moves more to digital services like DStv, OpenView, DTT (Digital Terrestrial Television), etc, the choice of channels increase to the consumer. This means less time spent watching the larger Free to Air (FTA) channels, resulting in more fragmented audiences. The decline in analogue homes has accelerated in the past couple of months and will continue as the government rolls out their plans to switch off analogue altogether. For instance, SABC has seen a decline in performance across all platforms. As the structure of the market has changed, the make-up of FTA channel viewing has evolved. Analogue only homes made up two thirds of SABC average monthly audiences in 2019. By May 2021 the platform contribution of analogue only dropped to 52%, with DStv, OpenView and DTT contributing more. Going forward, consideration is being given to moving the currency to minute-by-minute data as opposed to the current second by second data, as it will marginally stabilise the data at the most granular spot by spot level, whilst having no impact at a program and channel level. The consolidated final TAMS audit report will be accessible to the industry towards the beginning of October 2021.
Eastgate shopping centre focuses on luxury
Luxury retail is thriving at Eastgate Shopping Centre, with a host of expansions, new additions and designer destinations added to the tenant listing. The opening of luxury brand retailers’ Aeronautica Militare (lifestyle apparel), Ariana (luxury accessories), Armani Exchange (urban fashion) and Hydraulics (luxury brands), has led to the expansion of the luxury brand portfolio. Kelly Belman, Eastgate GM, commented, “Eastgate has a first-class reputation as a super-regional shopping centre, and it is a designer destination for a number of luxury retailers.” In addition to these brand offerings, there are a host of planned coveted tenants and luxury brands making their way to Eastgate Shopping Centre, in the next few months.
Shoprite launches instant EFT payments
Shoprite is the first South African retailer to launch an instant electronic funds transfer (EFT) service. The EFT service enables customers to instantly send vouchers to another person in just three simple steps. Senders only need to enter the recipient’s mobile number and the amount they wish to pay. There is no need to download an app in order to transfer funds. Shoprite, in partnership with Ozow, developed this new service in record time in response to the unrest in KwaZulu-Natal and Gauteng, as a safe and reliable way for customers to instantly send vouchers to others. Much like Shoprite’s Virtual Vouchers, launched shortly after South Africa’s first COVID-19 hard lockdown last year, recipients can also use the funds at any Shoprite, Checkers, or Usave store to buy groceries or other essentials. However, unlike Virtual Vouchers, recipients can use Shoprite’s instant EFT service without having to visit a physical store.
Global shipping delays are so bad and cargo costs have skyrocketed, to the extent that some major retailers like Walmart and Home Depot are chartering their own cargo ships to get product from overseas in time for the festive season, CNN reported. Brands such as Hasbro and adidas have already warned of stock shortages ahead of Christmas.
Amazon.com is apparently planning to open department stores, The Wall Street Journal reported. The newspaper, citing people familiar with the plans, reported that some of the first Amazon department stores are expected to be in California and Ohio. The locations will take up roughly 30,000 square feet. The move would mark Amazon’s latest experiment with physical retail stores. The department stores are expected to help Amazon sell more apparel and technology products.
Walmart said this week it would allow rival retailers to use its delivery service. America’s largest retailer said it will dispatch contract workers from its Spark delivery network, which was launched in 2018, to merchants’ stores to pick up items and then bring them to customers within a few hours. Over the past year, Walmart has doubled Spark’s coverage to more than 500 cities nationwide, providing access to more than 20 million households. Walmart said the delivery service, Walmart GoLocal, has already signed a number of deals with national and small business clients.
Shares in supermarket giant Sainsbury’s surged last week following reports that US private equity firm Apollo was considering a bid of more than £7bn for the chain. The supermarket’s stock jumped more than 15pc as the market responded to the report in UK The Sunday Times.
*Additional sources: Kantar, Total Retail Report, Wall Street Journal, CMO Council.
This week in numbers
Up to 78% of SMEs in retail across the Middle East and Africa are optimistic about future growth over the next 12 months; guided by potential for upskilling staff, digital payment acceptance and better data, according to the Mastercard MEA SME Confidence Index. SME confidence levels were highest among businesses in retail, ahead of other sectors, like food and beverage, entertainment, construction and manufacturing. Research identified key areas with the greatest potential for growth as: training and upskilling staff (55%), acceptance of digital payments (49%), better data and insights (49%), and easier access to finance (49%). This highlights the opportunities for small businesses that arise from both internal transformation as well as industry regulations and trends. The area where most retail businesses in the region say they now need support, is access to a wider range of financial services (55%). SMEs in this sector also want support managing or upskilling teams (49%) and effective regulatory support from government (48%).
QUOTE of the week:
“For years, marketers in the consumer-packaged goods (CPG) sector have counted on third-party cookies to define and segment their audiences, reach prospects and clients, target their offerings and communication, and measure their success. But in a trend, we describe as ‘data depreciation’, the utility and pervasiveness of third-party cookies is diminishing,” say Tom Corey and Erica Clerf, at Wunderman Thompson Data, on Retailing Africa this past week.
Main image credit: Shoprite.
*Stocktake is a weekly roundup of current FMCG retailing and brand news, curated and edited by Retailing Africa Publisher & Editor, Louise Burgers. Keep the industry updated and send your announcements and news to: firstname.lastname@example.org.
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