On Thursday, 13 October 2016, Beyond Retail 2016 took place at The Bay Hotel rotunda in Camps Bay, hosted by UCS Solutions and Business Connexion. The second speaker of the day was Masojada, founding partner and MD of Trade Intelligence, with a pulse on SA’s retail and wholesale sector. She provided what was dubbed as "the opinion former’s view" on whether retail can save the SA economy.
Masojada began by talking us through the trading context and comparative performance of local retailers by digging beyond the economic perspective earlier explained by economist Dr Azar Jammine. She explained economy falls into the broader ‘PESTLE’ factors that impact on retail behaviour: Political, economic, social, technological, legal and environmental.
Taking this into account Masojada said retailers need to respond beyond those shopper needs to communities, listing Shoprite’s Project Thirst as an example of how this can be done.
But it’s not just about meeting your consumers’ individual and shared needs, you also need to optimise your store. It’s a bit like being the frog in the pot – we can feel the temperature is increasing, but the gradual rise lulls us into not jumping out.
For retailers, the electricity price is the single biggest factor on the balance sheets, with solar panels being added to some spaza shops and petrol price considerations actually changing shopper habits to ‘one leg of the journey’ home instead of a separate detour.
Looking specifically at the SA food market then, Masojada confirmed that it’s valued at R485bn, with corporates now encroaching on wholesale territory and becoming masters at local, and with suppliers stretched to service. She also mentioned that the ‘hidden’ or second economy in SA is definitely food and grocery retailing as this sector reflects the highest turnover growth, particularly at counter service. Note that this includes informal traders operating from a fixed location, so not hawkers. Linked to this, Masojada says many foreign nationals are reigniting the channel and, as they’re competitively priced, they are giving the big names a run for their money. This links to their ability to cherrypick products from wholesalers and employ collaborative buying for distribution.
Speaking of retail sustainability Masojada listed the following eight retail trends:
Beyond social media, Masojada said loyalty builds from creating an emotional connection with the brand’s private label too, so their own shelf space allocation grows.
Consumer behaviour driving these trends links to the need to hunt for value, the fact that time is a luxury, consumers across the board aspire to live better and the pervasive trend of going digital.
Masojada thus concluded that retail can save economy through appealing to the consumer aspiration of living better. One way of doing so is by embarking on ‘community retailing’, where stores also serve as gathering places for education and upliftment to drive engagement.
She also pointed out that SA has the sixth highest number of shopping malls globally, with 71 new ones proposed. Retail can thus save the economy if the formal and informal sectors work together. With profitability as the next frontier, she said: “Retailers can save the context, making the change to their own private labels and thus ensuring suppliers do the same.”
The water in the pot is definitely heating up and we’re seeing exciting shifts in behaviour, from consumers and retailers alike. The times, they are a’changing…
Look out for further coverage of the #BeyondRetail2016 sessions over the next week on just how the local retail market is boosting the SA economy, and Click here for a reminder of the UCT Unilever Institute of Strategic Marketing’s #AspirationsReport 2016 into what South Africans really want.
