Stocktake: The soundtrack to our lives
It’s the end of a tuneful era as Musica closes the rest of its 59 retail outlets in malls across South Africa.Tuesday, 02 Feb 2021
Who has never browsed a mall without popping into a music store to check out new music or movies or box set specials? It was a rite of passage growing up, although in my day, it was still vinyl and mix tapes. And even in recent times, I never stopped buying music and movies for my children, especially older movies that weren’t readily available to view elsewhere. Although, of course, nowhere near what we used to spend on music in the olden days. With the closure of Musica, that era is gone for good, sadly.
The end of a retail era
The Clicks Group announcement that it was closing the rest of its Musica stores when the leases run out within the next four months, was sad, but not unexpected. Covid lockdowns only hastened the demise of such stores, as it did much of the media born in an analogue age. Digital and online streaming services for music and movies have killed both music and video stores. It was inevitable. In its trading update last week, Clicks announced that Musica stores would all close by 31 May 2021. The group stated in a SENS announcement that Musica has closed 19 stores since the start of the 2021 financial year and is currently trading from 59 outlets. “Acquired by Clicks Group in 1992, Musica has been the country’s leading music and entertainment retail brand for several decades. But, Musica has been operating in a declining market for several years owing to the structural shift globally to the digital consumption of music, movies and games from the traditional physical format. The inevitable demise of the brand has been accelerated by the COVID-19 pandemic which resulted in the rapid decline in foot traffic in destination malls where Musica stores are typically located. In the stores which have been closed since September 2020, the Musica staff have been absorbed into the groups expanding health and beauty store network. Management is committed to accommodating the remaining staff within the group where this is operationally feasible.”
Retailing Africa retail analyst and founder of Trend Forward, Dave Nemeth, said he can’t imagine going to a mall and not popping into a music store. “Musica quickly adapted to change and started selling vinyl and other seriously cool goodies in cool stores. Unfortunately the digital era has killed them and I’m seriously sad. Vinyl and all the other cool stuff was simply not enough for them to survive. Sadly, sometimes, retail dies because they are no longer relevant and there is nothing they can do. Big landlords must change their model so independent specialist record stores can feature.”
Amanda Reekie, ovatoyou founding director, said while Musica was part of our lives for an age and had a lot of nostalgia, she honestly couldn’t remember the last time she went into the store. “So, in many ways, Musica has done well to last this long, which is testament to the power of the brand and to some of our sentimentality about a time that is no more. In truth, people have been buying music differently for years now. Spotify launched in 2006 and Apple Music launched in 2015; and there are also a host of ways that you can listen to music on demand such as YouTube, so there really is an inevitability about this change. Although COVID-19 might have been what put the final nail in the coffin, the decline started happening a while ago.
“But you have to remember that Clicks overall retail and beauty sales rose by 8% and their group online sales jumped 173%, so Clicks knows too well the reality of how shopping and behaviours are shifting, which is why the closure makes sense for them. Fortunately, in this case, it looks as if many of the Musica staff will be absorbed into other stores within the Clicks group. But certainly, there will be a lot of excess retail space in the malls where their remaining 59 outlets are,” Reekie pointed out.
For the rest of the Clicks Group, turnover is up by 7.8% to R14.6 billion (2020: increase of 10.2%), due in part to increased demand for health and pharmacy products during the second Covid wave in South Africa. Total managed turnover, combining UPDs wholesale turnover and turnover managed on behalf of bulk distribution clients, increased by 18.1% (2020: 8.6%) as the business traded well and benefited from distribution contracts gained in the prior year. Clicks Group chief executive, Vikesh Ramsunder, said the business continued to show its resilience as the second wave of the Covid-19 pandemic gathered momentum across the country late in 2020 and into the new calendar year. There was good growth in front shop health sales as customers focused on preventative healthcare to boost their resistance levels with immunity-building vitamins and supplements. Online sales in Clicks continued their strong growth trajectory, increasing by 173% over the previous year as shoppers opted for the convenience of home delivery to reduce the risk of contracting COVID-19.
Designing a new world
For more than a decade, my year has started properly after the inspiring three-day Design Indaba, which annually features the best design, advertising and creative minds from around the world, reimagining new futures. This year, for the first time in its 25-year history, the world-renowed Think Tank takes a ‘Covid Sabbatical’ to gear up for 2022. Founder, Ravi Naidoo, says the team will use 2021 as a year to plan and execute a number of significant ‘Do Tank’ projects and launch its new Design Indaba Inside offering. “It makes no sense whatsoever to cut and paste a pre-Covid model onto a post-Covid world. So, we’re taking the time to do some healthy exploration to generate a future model that can continue to usher in a better world through creativity, which is the very premise of Design Indaba,” Naidoo explained.
Social distancing requirements combined with the physical limitations of Artscape Theatre Centre in Cape Town (Design Indaba’s venue for some years now) also mean that an event at the scale of the Design Indaba Conference and Festival is not feasible. While virtuality has provided some recourse for the events industry at large, it is not a viable option here due to the conference and festival concept and size. “We have a number of new long-term projects that we’d like to bring to fruition in 2021,” said Naidoo. “Many of them entail a lengthy process of council permissions and stakeholder consultations and we’ve already invested several hundred hours of our time. Once due process has been followed, we can’t wait to announce them to the public during the course of 2021.”
The Design Indaba team has also launched the new Design Indaba Inside offering, which creates capsule Design Indaba events within companies. Design Indaba Inside takes the form of tailored, stand-alone workshops that harness the power of the Design Indaba’s global network – a powerhouse of the world’s most revolutionary and progressive thinkers. The aim is to problem-solve specific issues that a company is dealing with and create bespoke solutions. “We’re here to aid businesses through the strategic advantages that we can bring to the table. We match specific Design Indaba Speakers’ expertise to the problem at hand, and then get that person or persons in the room with us, inside that company,” explained Naidoo. “Workshops are immersive, expansive and strategically curated to resolve business challenges. Sought-after design leaders are assembled to apply their creative minds to a business’s unique challenges, leading interactive insight sessions.”
In addition to Design Indaba Inside, Design Indaba’s regular offerings will continue. Both the Most Beautiful Object In South Africa competition and the Design Indaba Emerging Creatives programme will run in 2021, with entry dates to be announced in due course.
This week in numbers:
Rising food prices in South Africa mean that a basic food basket of essential items now costs more than the minimum wage. The January 2021 Household Affordability Index found that basic food items like sugar beans, rice, flour and bread have increased in price by between 31% and 68%. According to EWN News, a food basket for the average South African now costs around R4,051.20. The Index tracked food price data from 44 supermarkets and 30 butcheries between September last year and January this year in Johannesburg, Durban, Cape Town, Pietermaritzburg and Springbok. Economic Justice and Dignity Group programme director Mervyn Abrahams said: “A basket of 43 basic foods has now breached the level of a national minimum wage and we know that 60% of South Africans earn at that level because the national minimum wage would have been R3,321. So, food is much higher.”
QUOTE of the week:
“This technological evolution of ecommerce, digital and mobile wallets, mobility, cloud computing, artificial intelligence, Internet of Things, emergence of social media, real-time analytics and automated personalisation, has completely changed the way retail business is being conducted. With the current times, the retail outlets are now going digital by introducing virtual trial rooms, augmented reality, and the use of artificial intelligence. The idea is not just to optimise the in store experience, but also to offer a combination of aids that can help consumers to take the right purchase decision,” said Sizwe Dlamini, head of commercial at Idea Hive, on RetailingAfrica.com.
*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: email@example.com.
Louise Burgers 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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