RETAIL

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

South Africa’s “mall culture’” in suburban areas is strong: people support their local malls and have an affi nity 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 defi nes the experience. Choice is important”.

Atterbury CEO Armand Boshoff says that South African shoppers’ passion for instant gratifi cation 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 fulfi l 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-fi nd 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 fi rst 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 fi ll the space. We’re constantly thinking of the 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 affi nity with and loyalty to brands – that kind of customer loyalty in that environment is diffi cult 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 confi dence 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.”

“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 Sandton City Protea

HOW SAFE AND SECURE ARE YOU?

“Ensuring safety and security at a retail space is about creating value – helping property owners set the right requirements and secure their assets,” says SAFE Asset Group CEO Erik Engstrand. “By ensuring that the space feels safe – and is safe – owners and managers can build loyalty among tenants, staff and customers because their destination is an attractive one when measured against a new idea of security and cleanliness standards.”

He says that while the retail mix remains important, requirements around making experiences more safe and enjoyable now occupy a greater prominent role in customer choice.

As part of their recovery from the violent looting that took place in July, many retail hubs have had to reinvest in rebuilding and refi tting their spaces. Engstrand says this is the ideal time for property owners to review their safety and security planning. “With the risk landscape that has emerged around the world in the last three to fi ve years, it’s become ever more important to implement new safety and security requirements for any destination,” he says. “Adding twenty guards or a hundred new cameras for the sake of it is pointless if they’re not managed properly. If an owner is going to spend hundreds of millions of Rand on refurbishment or rebuilding, it’s essential to set down proper requirements and processes for a new future with new risks.”

SAFE Asset Group VP for Africa Kobus Weyers says that the change has come about because landlords are starting to see the importance of being responsible for the whole building, rather than shifting responsibility to the managing agent. “Once the landlord understands that creating the right environment for shoppers is a responsibility that starts at construction and redevelopment, rather than simply daily management, we will see real change that benefi ts both tenants and customers, and then, ultimately, the landlords, themselves,” he says.

Changes in the application of retail spaces for the future also require new protocols to be put in place. “With malls looking to become spaces for leisure, adding libraries or healthcare centres, the requirements change,” says Weyers.

“Establishing a healthcare venue in the property requires new protocols for the safe storage and protection of drugs, as well as evacuating ill people as fast as possible.” He says that it’s essential to set a roadmap that’s accessible and understandable across the board to ensure that the requirements are understood and properly communicated so that they can be effectively implemented.

CHANGING SPACES

In a pandemic-affected retail world, is online set to do to brick and mortar what video did to the radio star? TREVOR CRIGHTON looks for answers

The World Wide

Worx Online Retail in South Africa 2021 study, revealed that online retail grew by 66 per cent in 2020 to R30.2-billion – doubling in the space of two years. Despite this mammoth growth, online still accounts for just 2.8 per cent of total retail in the country. It has, however, outpaced traditional retail in 2020, which saw a decline.

The study projects that online retail sales will gross R42-billion in 2021, accounting for around four per cent of total retail – signalling more signifi cant growth. FAST FACT

South African online retail success A Mastercard survey (2020) of 1 000 South African online consumers found that story Yuppiechef raised more than a 68 per cent of respondents were shopping more online since the onset of few eyebrows in 2017 when it opened the pandemic, with clothing (56 per cent) and groceries (54 per cent) showing brick-and-mortar retail stores alongside the most growth. its online presence at a time when many retailers were looking to move the other way. Yuppiechef head of marketing Lauren Seddon says that the “WE AIM TO MEET CUSTOMERS WHERE IT SUITS THEM BEST. HAVING A BALANCE OF STORES AND closure of brick-and-mortar stores for extended periods in 2020, coupled with customers’ caution about being in busy E-COMMERCE GIVES US MORE OPPORTUNITIES TO MEET CUSTOMERS’ NEEDS – EVEN MORE SO WHEN THOSE EXPERIENCES WORK TOGETHER SEAMLESSLY.” – LAUREN Seddon, YUPPIECHEF

public spaces, did impact their physical store environment. “However, they recovered well after the initial lockdown period. And, our online channel, by contrast, far outperformed our expectations,” she says. Seddon says that the company sees plenty of value in the future of omnichannel.

It aims to prioritise both channels equally and invest in the growth of both. “We want to keep increasing the ways in which a single customer journey

can intersect the online and store offerings, adding more convenience to a Yuppiechef shopping experience. We aim to meet customers where it suits them best. Having a balance of stores and e-commerce gives us more opportunities to meet customers’ Lauren Seddon needs – even more so when those experiences work together seamlessly. We strongly believe that our store experience can be better because of our online offering and our online experience can be better because of our stores,” she explains.