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1st February 2023

Shift to online driving retail transformation in South Africa

JOHANNESBURG, South Africa, November 16, 2022/ — By Heath Huxtable, Executive Head at Braintree 

The demise of physical stores has long been talked about, and the idea seemed to gain momentum during the lockdowns that pushed more shoppers online. While the end hasn’t arrived, changes in customer behaviour mean that retailers now must have an online sales presence. And, they need a partner with extensive industry experience if they are to get this right.

Beyond eCommerce, factors driving change include mergers and acquisitions, restructuring, etc, and a drive to simplify IT to gain efficiency and reduce costs. In response, numerous digital platforms have emerged to help businesses develop eCommerce functionality. A crucial aspect to consider here is whether physical and online stores are integrated.

The majority of digital storefront products keep these functions separate, resulting in a lack of coordination across pricing and availability, product descriptors, specials, loyalty programmes, etc. This results in situations such as long wait times for delivery or even cases where someone orders online to pick up in-store, only to find that the product is not in stock.

Seamless integration ensures that products listed are available and can be delivered or collected in time, helping improve customer experience. As such, retailers want solutions that bring together finances, procurement, warehouse management, pricing, stock management, point of sale and more. Given the industry’s low margin-high volume model, the solutions also need to have lower deployment costs and cost per transaction.

These businesses turn to best-of-breed solutions – such as combining Microsoft Dynamics 365 Business Central with LS Retail – that lower total cost of ownership while providing enterprise-level functionality. This is key for retailers diversifying beyond FMCG and fashion, and into in-store butcheries and pharmacies, which come with unique challenges. For example, pharmacies come with regulations around patient management, prescription management and more.

For retailers looking to grow across Africa, the expansion costs and low margins mean that the business case simply cannot be made for a Tier 1 solution. Here, organisations such as Braintree, a Microsoft Dynamics Gold Partner powered by Vivica Holdings, can bring significant expertise, having implemented seamless digital solutions for retailers in SA and beyond. Braintree has also deployed solutions in several African countries without being physically present, bringing down deployment costs.

So what about physical stores? As we have seen, they still form a part of doing business but are increasingly becoming an experiential event that serves to showcase what is possible. Stores will serve merely to ignite people’s interest before directing them to a full catalogue of products online.

There are of course some areas where this won’t be the case: for example, shoppers prefer to try out makeup and other beauty products before purchasing, whereas there will be other items, such as clothing or shoes, which they are comfortable with purchasing online. In the end, they still need to ensure coordination between physical and online storefronts, and bringing on board the skills of the right partner will be key.