Social media is becoming increasingly influential for retailers to target their customers.
Anton Hugo, PwC Africa retail and consumer leader, said that online media and social media, as well as other influencers such as bloggers, were becoming more important for the local retail sector.
“Twitter and Facebook influence purchases,” he said, quoting from a worldwide PwC retail survey that surveyed more than 24 000 online shoppers in 29 countries, including over 1 000 respondents in South Africa.
“South African consumers are comfortable using social media. They find new products on social media,” Hugo said.
Liz Hillock, Woolworths’ head of online, said that a major percentage of the company’s online traffic originated on social media.
“We have found that many customers discover products on social media, browse those items online and then purchase them in-store.”
A Shoprite spokesperson said that social media was key to marketing for the group.
“Social media has become vital for customer feedback and suggestions, which the group takes seriously,” the spokesperson said.
Said Hugo: “The South African consumer has a high level of brand loyalty.”
Hugo said this was a particularly important trend given that there were 23 million smartphone users in South Africa. By 2020, the number of local smartphone users is expected to climb to 35 million.
Refilwe Boikanyo, a Massmart spokesperson, said that last year, the group saw profitable online sales growth of over 100%.
However, Shoprite has no online shopping presence.
Online retailer amazon.com was changing the global retail sector, Hugo said.
Amazon was now the world’s tenth-largest retailer, he said.
“Amazon has set many online standards in retail through its creativity and seemingly never-ending streak of disruptive innovations,” Hugo said.
Amazon has two kinds of impacts: shoppers use Amazon as a research site for prices and products and Amazon also cannibalises other retailers.
A key finding of the PwC survey was that retailers should invest in an Amazon strategy and that they should invest in a mobile site and not a mobile app.
Hillock said that local online retail was a nascent market and was growing quickly.
She said that Woolworths’ online foods business was growing consistently and the company was seeing good online growth for its clothing, homeware, kids’ and baby categories.
Rashaad Fortune, PwC associated director on retail, said: “Shopping via smartphone is continuing to surge in popularity.”
Consumers are using their smartphones to research products, compare prices, pay for purchases and check consumer reviews, he said.
“The frequency of mobile shopping ... is within striking distance of shopping via the personal computer.”
Weekly, 11% of respondents are doing mobile shopping and 16% are using a PC for online shopping, Fortune said.
Hillock said that over 50% of traffic to the woolworths.co.za website was from mobile devices.
“We’ve recently launched free Wi-Fi in over 85 stores and plan to roll it out in more stores in the next 12 months,” she said.
Another trend that Fortune identified was that retailers could better target their customers via the data they collect. “Invest in big data insights, not just data collection,” he said.
“One of the top issues for retailers today is parlaying the enormous amount of customer data they generate into actionable insights,” Fortune said.
About 35% of retailers are struggling to implement a strategy to provide a single view of the customer, Fortune said.
A Shoprite spokesperson said that collecting customer data, as well as implementing their feedback and suggestions, was a key priority for the company.
Hillock said that Woolworths collected and analysed data and this helped the retail group better understand and meet customer needs and improved its ability to deliver more personalised communications to its customers.
Fortune said that when it came to luxury goods, “authenticity” was important.
Another finding of the PwC retail survey was that retailers should invest in showrooms and not the entire store network.