THE AFRICA BAZAAR MAGAZINE
June 2015
Last year, when Growthpoint Mall in South Africa, a part of South Africa’s largest property company, Growthpoint Porperties, partnered with Onxy ventures and Shiro Quest (Pty) Ltd to create a new mobile app “Growthpoint Mall App” targeted at its mall visitors, they knew they were up to something major that could change the way shoppers in Africa connect and engage in a value sharing relationship with their favorite malls, stores, and brands.
The app, a personal shopper/ reward card and digital wallet that links all stores, and brands within Growthpoint shopping malls across South Africa enables customers to access and share information about their favorite stores and brands, and has a real appeal for the convenience-loving African emerging middle class.
Retail shopping in Africa is at a crossroads.
Although in-store retail shopping is still the single largest mode of shopping on the continent, e-commerce is gaining in on it, and taking a huge chunk of the pie, thanks in part to the availability and the widespread use of the internet and smartphones across urban cities in Africa, which make shopping easier, faster, and always available whenever the consumer needs to shop.
According to a recent report, mobile shopping on the continent, even though it is still in its infancy and lags behind developed continents, accounts for a significant portion of retail shopping. Much like how mobile-payment services like M-Pesa revolutionized the banking industry on the continent, analysts say this can be taken as a reflection of the direction the retail industry is headed in Africa.
The inherent appeal of this soon-to-take-off trend lies in its convenience: Saving consumers time and effort by condensing what would have been multiple errands to different stores into one quick and easy activity.
As competition heats up between brick and mortar, and online retail stores, brick and mortar stores are not sitting idle either, but are finding new ways to lure customers to their stores.
On their part, they are beefing up on technology upgrades, investing in new innovative technology such as mobile apps and vigorously encouraging customers to leverage relevant mobile technology to personalize their in-store shopping experience.
The ultimate goal here, experts say, is to leverage technology with consumers’ sensory experience- for example, most people still like to feel, touch, and inspect before buying an item of clothing – to enhance physical in-store experience.
As technology continues to permeate all or most aspects of our daily lives, advancements in mobile technology have completely redefined customers’ expectations of services, convenience, choice, and quality of experience, especially among young consumers, millennials who prefer to conduct the majority of their activities online.
To keep up with the trend and the new demographic, about 40 percent of companies in [Africa] are investing in mobile technology upgrades and consider it a key part of their business strategy, according to a 2014 Accenture Mobility report.
Store of the Future
Retailers and mall owners are not the only ones trying to cater to this new shopping trend. Some of Africa’s major mobile providers also see this as an opportunity to expand their services and attract new subscribers.
For example, MTN, one of Africa’s biggest mobile providers and e-commerce platforms, has partnered with PriceCheck, a price comparison mobile technology platform, to bring a personalized retail shopping experience directly to its customers through its PriceCheck MTN app.
MTN mobile subscribers can use PriceCheck mobile app to check for product information, do comparison pricing of products from different stores on their mobile phone before going to the store or use the mobile app while they are in the store by scanning the product’s barcode to read the review, search and compare flight prices, get quotes as well as share product information with friends and family.
The app, which is also targeted at the urban-emerging middle class in Africa is now available to MTN customers in South Africa and Nigeria.
Experts say that with the ubiquitous use of smartphones on the continent for almost all online searches, most buying decisions now start on the phone with customers researching a product online before buying it online or going to the store to purchase the product.
The app not only helps time-constrained professionals, shoppers, and the African emerging middle class, but it also gives MTN an advantage over its competitors.
The PriceCheck MTN app also emphasizes a new shift in retail shopping and a growing demand on the continent for a more personalized shopping experience, something that other businesses should pay closer attention to in what is quickly becoming a competitive market.
Overcoming Hurdles
While it is clear that e-commerce on the continent is not going away anytime soon. It is equally clear that it shares some similar challenges as traditional brick-and-mortar stores do, which it will have to overcome to stay competitive.
For example, online shopping is characterized by exploration, discovery and learning about new products, but it is also cursory, time-constrained and superficial. Traditional retail shopping on the other hand is characterized in many ways by giving a meaningful face-to-face, personal interaction within the store, but it can also be time-consuming and overwhelming.
Analysts say adoption of seamlessly integrated systems, including logistics, data and technology will be absolutely critical for the retail industry to maintain its relevance.
A look at the usage of mobile payment technology on the continent, which has been widely adopted due to necessity and convenience provides some answers on how the retail industry can leverage technology to drive economic growth.
Ask your average person how much he or she enjoys shopping, and you may get an eye roll. Yet, ask that same person how much he or she enjoys bargain shopping, and this time you most likely would get a smile. Analysts say that’s because no one likes to squander money. If customers know they can find a bargain at a particular store – and they are given options to either buy it online or in store, they are more likely to return to that store again.
A Game Changer
For the retail industry in Africa to remain competitive, experts say it has to overcome some of its drudgery by giving consumers options and by augmenting its bargain selections for consumers on daily or weekly bargain-hunting shopping.
Since customers’ perceptions of a store often change depending on the shopping experience, experts say the key here is to deliver on a customized shopping experience.
No one really likes to wait in line when purchasing an item in a store or encounter technical issues when trying to shop online. Avoiding any logistics delays or technical inconvenience that could hamper the efficacy of service will be key to fully integrate the new retail shopping concept into the African culture the same way that mobile payment technology has been widely adopted on the continent to drive economic growth.
Experts also say adopting cloud-based technologies to leverage data would create a great opportunity for retailers to gain insight into their customers’ needs in addition to using it to communicate with them on their smartphones.
Addressing and removing trade barriers such as the electricity crisis across the continent and regional trade barriers such as hefty tariffs would help speed up Africa’s future growth path in this consumer-facing sector.
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