PricewaterhouseCoopers (PwC) this morning released the Annual Global Total Retail Consumer Survey, showing e-tailing is growing fast.
In this year's report, there were more than 19 000 respondents across six continents and over 1 000 from South Africa. The survey revealed the physical store remains top; however, online retail is growing fast as more users become comfortable with using the Internet.
Some of the key results included 14% of South African online shoppers surveyed saying they shop online weekly or more frequently. 53% of the same group say they have intentionally browsed products at a store but decided to purchase online, and 73% say they have browsed products online and then purchased them in-store.
PwC notes there is an "incredible merger of the two retail worlds" and online shopping will grow at a compound annual growth rate of 15.9% between 2013 and 2018.
John Wilkinson, retail and consumer leader for PwC SA, said: "The environment for retailers has never been more complex, as consumers continue to develop to research and purchase products, both online and in-store."
According to the survey results, retailers are faced with four challenges, including that stores need to be tailored to the digital age. The store will likely evolve into something more connected, customised and in tune with customers' expectations of across the board channels. "Customers want to be connected to the retailer 24/7," said Wilkinson.
The second disruption is mobile technology, which is increasingly becoming a critical factor when people shop. 36% of people globally prefer to pay using mobile payments; however, only 3% of South Africans prefer this solution. Customer impact and digital transformation analyst Peter Hoijtink says this will change drastically soon as there is a great "entrepreneurial spirit" around developing secure mobile payment channels in South Africa, citing the example of SnapScan.
The third disruption is social networks. South Africans will see a definite increase in purchases made via social media in the coming years as the country's large group of digital natives, 18- to 24-year-olds, expand into the purchasing market.
The final disruption is the demographic shift. "With South Africa's population being so young, the adoption of a more socially connected, digital retailing space, where not only a product is sold but the customer receives a memorable experience, is imperative for any retailer looking to maintain or gain a competitive advantage over its competitors," said Wilkinson.
Hoijtink said South Africa has a different infrastructure of the retail space compared to condensed European countries. "South Africa has large malls with available parking, which makes it easier for consumers to shop in-store here."
He added there is enough room in the South African market for online shopping to thrive. "The eight million or nine million people in South Arica that are connected and comfortable purchasing online, is the same size as a small European country where the online retail industry is massive."
The survey also found the global reason to go online is because the price is cheaper, whereas in SA, it is because customers would prefer not to go into the actual store, Hoijtink said this could be because online retail in SA reaches a more affluent audience who are not necessarily concerned about price.
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