Transformation of SA’s Retail Industry

Jacques du Rand 2021-04-23

One thing that finally made progress during the South African lockdown during the Covid-19 pandemic, was the retail industry.

For years the industry was trying to get South Africans to adopt online shopping and digitally transform the space. Sadly these years were spent kicking a brick wall for the most part as eCommerce stayed below 2% of overall retail trade contribution up to as recently as 2019.

It took having to be locked up in our homes for people to finally make a concerted effort to shop online, and now that they have, it is finally booming.

Retail Before

Retailers primary focus was to get the best mall location for the highest footprint and didn't put as much effort into promoting their stores or wares online. They relied heavily on the mall attracting that for them.

Retail Transformed

As South Africans couldn't leave their homes for the first few stages of the lockdown period, retailers seriously needed to look at a better strategy to still draw their customers and not run at a complete loss. Rent was expensive and no sales were being made. They were forced to look at creative ways of embracing eCommerce and online advertising methods to reach their usual customers.

They now had to find ways of engaging with a customer base that didn't want to (or couldn't for the most part) go into a store, that wanted to shop online, and that wanted the convenience of door-to-door delivery.

A sure-fire way to be catapulted into digital transformation for sure.

The End Result

According to the Retail Industry Report 2020: The South African online market grew by approximately 40% during COVID-19 lockdown.

As South African shoppers we have many more options available to us now. The stores that did this well will continue to see growth from the online shopping sector especially while 80% of South Africans are still awaiting the vaccine.

We also saw more collaborations as smaller stores and coffee shops had to find ways of reaching a wider audience - and I must admit, even I have been exposed to some great shops (although all mostly food related) that I would not have seen before.

"Nielsen reported that "between March to August 2020, 35 percent of modern trade and convenience stores accounted for 80 percent of spend, increasing by a massive 26 percent, on 2019, indicating greater fragmentation of stores now accounted for the majority of sales in South Africa."

We have already mentioned all the great online food shopping resources as well, and every day more are being added outside of the larger retailers as well.

These larger online grocery shops like PicknPay, Woolworths and Checkers (60Sixty) were also a big hit during lockdown and continue to be a massive convenience. The one major chain store that is still lacking any kind of online ordering system is however SPAR.

Those Whom We'd Like To Applaud For A Job Well Done

  1. Takealot - went from strength to strength. They also expanded their product range to cater to items that people were struggling to get. Smaller, and niche retailers were also able to partner with Takealot to get more visibility on their products too.
  2. Clicks Pharmacy - for offering users the option to receive scripts via delivery.
  3. Netflorist - who added food delivery to their usual flowery offering.
  4. Rentoza - who let business (and non commercial trade) rent out their unused appliances. A great innovation for those with retail, or office space where appliances were not doing anything during lockdown due to being closed.

The future looks bright for better service delivery. And, we hope that retailers also bring some of their online learnings in-store, such as:

  • Adding pre-order options to out-of-stock products directly from the shelves via apps,
  • Keeping Qs shorter by offering pre-purchase through apps and collection in-store,
  • And possibly even, self-service check-out stations.

At least you don't have to queue for the best fibre deals in South Africa. ;)