Castle Gate
LEARNING TO LIVE
TOGETHER IN HARMONY The future of retail lies in a blend of online and physical spaces to cater for South African consumers’ needs. By TREVOR CRIGHTON
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outh Africa’s “mall culture’” in suburban areas is strong: people support their local malls and have an affinity with them. While millions of South Africans were introduced to online retail during lockdowns, we’re still a nation that likes to touch and feel before we buy – which is why online retail “only” accounts for a 2.8 per cent (R30.2-billion) slice of the R1.05-trillion retail pie for 2020. “I truly believe that online and physical retail are going to have to learn to live together, integrating seamlessly for customers to get the best of both worlds,” says Liberty 2 Degrees CEO Amelia Beattie. “It’s the phenomenon of ‘no-line’ shopping, dominated by neither online nor traditional retail. Personalisation is also becoming more important - if we get that right, customers will be able to choose whether they want to look at something online and order it, or prefer walking into a store to touch, feel and carry out what they’ve bought, because that defines the experience. Choice is important”. Atterbury CEO Armand Boshoff says that South African shoppers’ passion for instant gratification means that they want their groceries when they want them, rather than waiting even 60 minutes. “It’s impossible for a retailer to cover deliveries in large urban areas quickly from a central distribution warehouse,” he says. “What we’re seeing is that retailers are using their physical stores to fulfil orders more quickly – the retail space is becoming a
distribution centre, which anchors the physical space within a retail centre.”
OBSTACLES AND ALTERNATIVES Boshoff says there are two major stumbling blocks to online shopping in South Africa – logistics and reaching people in rural areas or informal settlements with hard-to-find addresses. “Our logistics infrastructure is not on the same level as in the US, UK and Europe. There is some way to go before that matures. It’s hard to tell someone that they need to be at home for an entire day to take delivery, rather than assigning them a time so they can plan,” he says. “Then, 80 per cent of the South African population lives in rural areas and informal settlements that don’t have street addresses to facilitate online deliveries to their doors. Until our logistics infrastructure is on par with the first world and we solve the address problem, I think that mass adoption of online shopping will take a long time.” Beattie concurs, saying that even though online retail has grown from one to two per cent of the total retail market in the last three years, that’s still 100 per cent growth; and the trajectory is upwards. “We have to think about how we accommodate that. The analogy I always use is that you can go to Sandton city, or we can bring Sandton City to your couch. We have to adapt so that we don’t just focus on looking for tenants to fill the space. We’re constantly thinking of the
“The most important message to the market is that if you have good quality retail opportunities with enough feet coming through the door and spending, vacancies will remain low.” – Amelia Beattie, Liberyy 2 Degrees Richmond Corner
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other things that could draw people to retail environments.” She cites the example of car dealerships that operate at regular hours during the week when people have to work, and then close early on Saturday and largely don’t open on Sunday. “By bringing things like car showrooms into the retail environment, with the same trading hours as other stores, and using our huge car parks as spaces for people to test drive them, we can make it easier for them to buy vehicles,” she says. “We’re doing things like providing storage facilities for customers to drop their shopping off safely before stopping off for something to eat or doing more shopping - and then returning to collect before heading to the parking. We’re also adding more ‘click & collect’ services - all to make it easier for customers to shop the way they want to”. Boshoff says that its vital for retail developers and landlords to continue to ensure that consumer needs and demands are met in the retail environment. “What makes shopping centres successful is that people come to an anchor tenant for their groceries, then stay and have a coffee or a meal and then browse other stores,” he says. “What may happen is that we’ll see people shopping for basics and ordering bulky items that are hard to move around the centre online, but they’ll still stay and enjoy the vibe and options provided by a mall.” “There’s a strong sense of ‘belonging’ in the retail environment – look at how communities stood together in the face of looting in July to protect their malls,” says Beattie. “People support the centre because they were born close by, have always shopped there and have an affinity with and loyalty to brands – that kind of customer loyalty in that environment is difficult to replicate online. “It’s about providing quality environments and it’s encouraging that we’re seeing people wanting to open new stores because they have confidence in those environments. The most important message to the market is that if you have good quality retail opportunities with enough feet coming through the door and spending, vacancies will remain low. If the fundamentals are not in place, vacancies will go up and retailers will have to consolidate in the places they believe will give them the best chance of success - a change from the days of opening stores everywhere to get a bigger footprint and focusing instead on where to open for the best impact.”
COMMERCIAL PROPERTY
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2021/08/24 10:01 AM
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Sandton City Protea
