E-commerce not biggest disruption in township retail - marketing specialist

E-commerce might be regarded as causing the biggest disruption with regards to the retail market globally, however, from a township retail point of view, the biggest disruption is a shift in power, according to Lemok Group founder Lebogang Mokubela.

He addressed delegates at the recent SA Council of Shopping Centres (SACSC) Research Conference.
"A majority of the township audience is relatively reluctant to (do) online transactions due to issues around security but most importantly, this market is big on instant gratification - they want to buy something and get it now, which e-commerce does not provide as an option,” he said.
He added that the township consumer is more educated and more aware of their buying decisions and, therefore, the power now lies with them.

“In the beginning it was about promotions and tenant mixes, but these days, despite the promotions, consumers do not buy. Obviously, this is because of other influences such as lower disposable income, but the main point is that in order to appeal to the township market, shopping centres need to be aware of the less-obvious needs and cater for those," he said.

"Bringing a cash and carry into your mall isn't the answer. The point is to build initiatives and spaces that give consumers a real reason to come to your mall,” said Mokubela.

Increased spending

The stronger rand following the leadership changes in SA will increase consumer spend, yielding better retail results than last year, said Sesfikile Capital’s Kundayi Munzara at the annual research conference. Kundayi further suggested that landlords need to consider re-strategising in order for tenants to capitalise on the stronger economy.

Political commentator Justice Malala added that he had a positive outlook on consumer spend, saying SA consumers need to shop more to strengthen the economy.

“Ramaphosa brought about a sense of consumer confidence. I am glad to see growth and for us to continue to grow, my advice is to keep calm and carry on shopping,” he added.

Steven Burnstone, CEO and head of analytics for Eighty20 Consulting, highlighted the importance of loyalty programmes in retail. He added that standing out and being attractive to consumers is not impossible - all it takes is an understanding of your customers and partnering with the right brands.

“The way businesses communicate to customers is one of the many areas that need to be focused upon. Businesses need to shift away from traditional, product-focused advertising models and focus on delivering advertising and promotional messages that are customer-focused and tailored to specific individuals. Partnering with the right brands offers customers a sense of added value by providing tangible incentives such as fuel discounts,” he said.

Major disruption
Catherine Stevenson, senior consultant of cross border retail for Cushman & Wakefield Excellerate, said pretending that the retail sector isn’t undergoing major disruption won’t help anyone.

"New experiences, formats and trends, underpinned by advances in technology, are creating new ways for customers to interact with retail. The occupiers and landlords with an informed view – and willingness to adapt – will be the ones who find opportunities in our changing retail environment,” she said.

She added that customer journey maps allow you to understand the experience your customers are actually having, which is often very different to the one you think they are having.

The SACSC announced the signing of formal agreements with The International Council of Shopping Centres (ICSC). The SACSC joins 17 national associations of retail real estate in creating such a partnership. The main aim of this partnership is to highlight the integral role the retail and shopping centre industry plays in economies world-wide.

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