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What Digital Transformation Means for the Future of Retail


Philippa Dods

Jan 8, 2020

Around the world, retailers face a difficult challenge.

Consumer habits and behaviours are changing dramatically, while traditional brick-and-mortar stores battle for survival in an increasingly digital world. Indeed, many onlookers are speculating whether there will, in fact, be a place for physical stores in five to ten years’ time as more consumers are turning to the convenience of e-commerce and online browsing.

Like almost every industry in 2019, the retail sector has to consider digital transformation. For retailers, this will mean shifting from an inventory-led ecosystem to what many have dubbed a more “experiential environment” – whereby shopping offers some kind of unique, engaging and very personalized retail customer experience. Moreover, retailers have to begin to consider emerging trends such as cashier-less checkout, live shopping, social commerce, and data-driven merchandising. 

person's finger on an ipad screen with a cup of coffee on the table

Top Tip: For more insights on digital disruption, watch this free, on-demand webinar on How Digital Transformation is Changing Our World with Accenture’s Digital Transformation Lead, Greg Cress. 

What Does This Mean for Africa?

Notably, African retailers and brands have an opportunity to leapfrog traditional approaches to retail – and to embrace key shifts at an early stage. The first step, however, requires an understanding of what the customer of the future looks like.

To start with, brainstorm what the customer of the future will look like by asking yourself these questions:

  • How will customers behave?
  • What values will they live by?
  • How will they look to integrate technology and wearable devices with physical shopping?
  • Will they expect dynamic and tangible experiences?
  • How much personal / human-to-human interfacing will they really need?

Only once retailers and brands have explored and understood what these needs will look like, can they intelligently and adequately plan, design and build. Arguably, looking ahead to what the customer of the future will look like is absolutely imperative to future sustainability and growth. Standing back and simply responding to customer demands, as they evolve, is a surefire way to be overtaken by more nimble and agile competitors. 

person's finger on an iphone with shopping aisle on the screen

With this in mind, we consider what the customer of the future will look like..

In Search of the Seamless

With the skyrocketing popularity of cash-free or cashless innovations such as Uber and Lyft, even credit and debit cards are beginning to look obsolete. Indeed, some market insiders are forecasting the evolution of an entirely cashless society – and consumers are increasingly demonstrating their keenness to abandon cash.

It’s not as far away as we think: Sweden is expected to become the world’s first cashless society by March 2023. Unsurprisingly, innovations around mobile and contactless payment methods have ballooned, with mobile transactions booming. 

In the United States, mobile payment transactions were valued at $49.3bn in 2017, but this figure was overshadowed in just a ten-month period by China, where they reached a whopping 81 trillion Yuan between January and October 2017. 

In South Africa, many are already leaving their bankcards at home as smartphones become the new [digital] wallet. According to a study by PayPal, 85% of respondents used their mobile phones to make a purchase in 2017, and 46% said being able to shop on their mobile phones has made them buy more. Tellingly, the majority of South Africans would rather leave home without their wallets than leave home without their mobile devices! 

Given the South African social media statistics and social media trends in Africa, the message for retailers is plain: the customer of the future will demand a mobile, friction-free, and almost invisible payment ecosystem.

person using their mobile phone to pay

Ultra-Connected, Highly Informed

According to agency We Are Social and Hootsuite’s Global Digital 2019 reports, internet users are growing by an average of more than one million new users every day. There are 5.11 billion unique mobile users in the world today, up by 100 million (2 percent) in the past year, notes We Are Social. Astoundingly, there are 4.39 billion internet users in 2019, an increase of 366 million (9 percent) compared to January 2018. It goes without saying that more internet users have massive ramifications for retailers in every market. The more connected people are, the more informed and tech savvy they become – which radically changes the nature of consumer expectations. 

Moreover, along with more people becoming connected, more ‘things’ will become connected – with devices of all kinds constantly generating and sharing data. This is the Internet of Things (IoT), which will become integral to individual lives and purchasing decisions. In homes, for example, connected fridges will automatically send notifications when certain basics are running low – and may even send a grocery list directly to the owner’s smartphone. Notably, the Ericsson Mobility Report forecasted that in 2018, mobile phones were surpassed in numbers by IoT devices, which includes connected cars, machines, meters, wearables, and other consumer electronics. 

For retailers, the rise of the Internet of Things and overall, 24/7 internet connectivity means that consumers will be very particular and focused in what they are looking for – and will demand that the retail experience deliver on their needs both seamlessly and instantly. Retailers will therefore have to harness technology, including IoT, to create a slick and ‘friction-free’ environment. 

For example, strategically placed sensors and connected beacons can inform shop assistants when inventories are running low, and the use of chatbots can ensure that when consumers are online they receive quick and data-driven feedback. Even a slight delay in response times could lead to eroded consumer loyalty and damaging feedback on social platforms. 

Indeed, as Facebook’s group director Martin Harbech commented to Wired UK, “companies will have to keep up with the standards set for customers by the top brand in the field. And the way to do so is to completely remove friction from the shopping experience – to become friction-obsessed.” 

lots of people on the street at night with lights on at a retailers

Top Tip: Read more on how Augmented Reality (AR) in particular, is drastically changing and improving Customer Experience

Embracing “Green Consumerism” 

With so much of the world’s attention being drawn to the grim predictions of climate change, consumers are becoming increasingly aware of their environmental impact – which includes their daily purchasing decisions. Arguably, this awareness and ‘earth consciousness’ will likely grow in intensity and fervour, making it increasingly important for retailers themselves to embrace sustainable and environmentally sound operational practices. 

According to research firm J. Walter Thompson Intelligence, ‘consumers expect brands to be sustainable and are willing to pay more to support those that are.’ In a 2018 study titled New Sustainability, the research team unveiled that 89% of those surveyed ‘care personally’ about protecting the planet; 92% said they are trying to live more sustainably, while 83% would always select the brand that has a better track record of sustainability. 

Notably, Millennials are at the forefront of the global ‘green consumerism’ movement, with research company GlobalWebIndex revealing that Millennials (aged 22-35) are more likely than any other generation to say that they would pay extra for eco-friendly or sustainable products. The market research company further notes that over 60% of Millennials have this inclination, compared to 55% of Gen X (aged 36-54) and just 46% of baby boomers (aged 55-64).

This shift, in itself, presents a clear opportunity for retailers and brands to connect with customers and build new relationships around the values of sustainability and green living. Indeed, as Peter Diamandis, executive chairman of the XPrize Foundation, has stated: “The world’s biggest problems are the world’s biggest business opportunities.”

With these three major trends in mind, retailers and brands can begin to incorporate new technology as well as new values into their product and service offerings. Only through constant innovation and a willingness to ‘disrupt from within’ can retailers ultimately survive – and thrive – in a rapidly changing consumer landscape. 

If you’re interested in learning more about how to thrive in the digital age, disrupt and transform with ease, cater for the customer of the future and take your business to the next level with media intelligence, reach out to the Meltwater Africa team today via the following form.

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