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, has a real appeal for the convenience-loving African emerging middle class.

Retail shopping in Africa is at a crossroad.

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 chuck of the pie, thanks in part to the availability and the wide spread uses of internet and smartphone 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-Pasa 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 competitions heats-up between brick and mortal, and online retail stores, brick and mortal stores are not sitting idle either, but are finding new ways to lure customers to their stores.

On their parts, 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, inspect prior to 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 conducts 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 platform, 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 prior to 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 with the ubiquitous use of smartphones on the continent for almost all online search, 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 help time-constrained professionals, shoppers and African emerging-middle class, it 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 personalize 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 mortal stores do, which it will have to overcome to stay competitive.

For example, online shopping is characterized for 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 for 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 retail industry can leverage technology to drive economic growth.

Ask your average person how much he or she enjoys shopping, you may get an eye roll. Yet, ask that same person how much he or she enjoys bargain shopping, this time you most likely would get a smile. Analysts say that’s because no one like to squander money. If customers know they will find 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 changes depending on shopping experience, experts say the key here is to deliver on a customized shopping experience.

No one really like to wait on line when purchasing an item in store or encounter technical issues when trying to shop online. Avoiding any logistics delays or technical inconvenience that could hamper 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 of their customers’ needs in addition to using it to communicate with them on their smartphone.

Addressing and removing trade barriers such as electricity crisis across the continent and regional trade barriers such as hefty tariff would help speed up Africa’s future growth path in this consumer-facing sector.

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