Retailers need to think beyond multi-channel to achieve ‘Total Retail,’ according to PwC

Annual survey of online shoppers reveals eight consumer expectations reshaping the next retail business model

South African consumers are looking for a full slate of shopping options, according to a new report by PwC titled ‘Achieving Total Retail: Consumer Expectations Driving the Next Retail Business Model’.South Africans want convenient physical store locations, websites that enable them to find and purchase products, and easy-to-use mobile sites or apps - and retailers need to adapt in order to compete.

Consumers expect a consistent experience across all purchase channels

The majority of South African consumers still enjoy shopping at a physical store, citing immediate access to products and the ability to see, touch, feel and try the merchandise as the top benefits.  In-store, consumers want technology to help enhance the shopping experience.

“The physical store still offers consumers a tangible experience  which cannot be replaced,” says John Wilkinson, Retail & Consumer Industry Leader at PwC. “However, online channels enhance the shopping experience - ultimately, it doesn’t matter where or how consumers actually make their purchases.  They want technology that provides them with convenience, easy access to information and a transparent, real-time view of the retailer’s inventory.”

Online shopping is increasing rapidly

“The survey results clearly indicate that online shopping is catching on rapidly with South African consumers,” says Wilkinson.  Twenty-five percent of South African online shoppers made their first online purchase less than one year ago and 45% within the last two years.  Only 15 % of South African survey respondents indicated that they never bought products online and 40% purchase online at least monthly. 

More than half of South African survey respondents cited the ability to shop from home and to shop 24/7 as the main reasons for purchasing online, while 40% believe they can find better deals online than in-store.

About the survey

Based on a survey of more than 15,000 online shoppers across 15 countries, including South Africa, the study discloses eight consumer expectations that call upon retailers to create a Total Retail business model transformation:

  • A compelling brand story that promises a distinctive experience 

    Retailers should better establish a strong brand promise that solidifies a core of loyal customers. A high percentage of survey respondents were attracted to brands that tell a story in an engaging manner.  The majority of South African online shoppers (92%) say they shop at their favourite retailers/brands because they trust the brand.
  • Customised offers based on totally protected, personal preferences and information

    Online shoppers increasingly said they want personalisation based on their past purchases, and retailers are getting better at delivering it.  Big data and predictive analytics will help retailers use customer data to increase marketing and sales effectiveness through customising digital coupons, exclusive content, and social media promotions, among others.

    But retailers should better safeguard data, by either building their capabilities step-by-step or adding proper capabilities through acquisitions. Cyber security is still considered a major issue for online shoppers in some territories.  Of the countries surveyed, South African shoppers were most worried about the security of their personal data.  Of those South African online users who didn’t shop online, 61% cited personal data security concerns as the main reason for not shopping online.

    “This mistrust of online security could be rooted in the fact that South Africa had the highest percentage of new online shoppers in the survey. Retailers need to ensure that they provide efficient and secure technology that maximises a consistent and distinctive brand experience, while still maintaining trust amongst their customers,” adds Wilkinson.
  • An enhanced and consistent experience across all devices

    Among South African survey respondents who do not use their mobile phones or smartphones for shopping, 50% said they are worried about security and 49% said device screens are too small.  However, as mobile based broadband internet penetration in South Africa increases and mobile phones and apps get better, mobile shopping is likely to accelerate. To prepare for this expected increasing growth in internet penetration, the Total Retailer will need to have the technical agility to provide one seamless experience via PC, tablet, mobile phone, in app or web browser.
  • Transparency, real time, into a retailer’s inventory

    When asked which in-store technologies would make for a better shopping experience, 59% of South African survey respondents chose the ability to check other store or online stock quickly.  Consumers want actionable inventory information from retailers, pushing retailers to upgrade technology on their supply chain, on how products are tracked, warehoused and distributed. Consumers are also looking to use their mobile phones to pay for their shopping (38%) or sales associates who can take payment without going to the cash register (36%).
  • Favourite retailers are everywhere

    When we asked shoppers what they would do if their favourite retailer closes down its local store, 70% of South African respondents noted they would locate the next nearest physical store of the same retailer, while 49% said they would find an alternative retailer’s local store selling similar products.  Given the relative immaturity of the local multi-channel shopping market, only 35% of respondents indicated that they would start or increase ordering from the retailer’s website. Globally, this percentage is much higher, with, the majority of global survey respondents indicating they would turn to online shopping from their favourite retailer’s website before going to an alternative retailer’s local store.  Shoppers today assume retailers are everywhere and always connected, like themselves, and retailers need to look at store portfolio management more strategically.
  • To maximise the value of mobile shopping, both store apps and mobile sites must improve

    PwC’s survey finds shoppers do not have a strong preference regarding using an app or browser for mobile shopping. When asked how often they use an app and mobile browser for shopping, respondents indicated 18% and 19% weekly, respectively, with mobile browser faring slightly higher due to convenience (53% prefer a mobile browser because of convenience). Retailers should take note to ensure their mobile site is optimised, while also ramping up apps to improve the experience.
  • Two-way social media engagement

    Enthusiasm for social media by retailers and brands is driving consumers to engage, comment and even effect change. When asked what attracted them to a particular brand’s social media site, 49% of South African respondents noted attractive deals and promotions, 38% indicated the opportunity to participate in competitions and 36% are interested in new product offerings. Retailers should in return better listen to customers on social media, transforming commentary into actionable data for new ideas and improved experience.
  • “Brands” act like retailers, and we’ll treat them that way

    The area of overlap is growing between manufacturers (“brands”) and retailers.  A significant percentage of South African respondents (65%) have bought products directly from a brand’s website, with 43% of them noting that a lower price is the main reason they buy directly from a brand’s website.  A full product range, more choice and better stock availability are other reasons given by South African respondents.  Successful retailers today are partnering with brands/manufacturers to share consumer insights and collaborate on category management to drive more success for both.

    It is interesting to note that in South Africa, where food retail accounts for the majority of total retail sales, grocery is still the top product category that is currently not being bought online. Sixty-five percent of South African respondents have never shopped online for groceries, but interestingly, only 11% indicated that they are not interested at all in online grocery shopping.  South African online grocery shoppers are motivated by “free delivery” and “lower prices”, although the convenience of shopping from home at any time of day also plays an important role.

    “Consumers now view multichannel shopping as a given, and the costs and complexities of managing a multichannel model are too great and offer too few rewards to benefit the customer experience,” says Wilkinson. “Today’s non-stop shoppers have taken things into their own hands, becoming more tech-savvy than retailers.  Consumers have the tools at their fingertips to immerse themselves into the retail brand.  Our report finds that consumers have strict expectations that challenge today’s shopping experience and, in response, retailers should embrace what we at PwC are calling Total Retail.”

Contact us

Sanchia Temkin
Senior Manager, PwC South Africa
Tel: +27 (0)11 797 4470
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