By Dumisani Moyo
A Deloitte report on how the pandemic has affected retail consumer sentiment found that the “COVID-19 crisis has fast-tracked the urgency for digital transformation in retail, highlighting the need to operate and serve customers differently”.
According to the same report, while digital transformation has been important to all sectors, retailers, in particular, need to find new ways to serve customers in order to remain relevant and competitive.
By leveraging technology, retailers can develop dynamic capabilities that are critical to gaining long-term competitive advantage. For retailers to differentiate themselves, respond to changing customer needs, and prioritize innovation and agility across the entire value chain, digital transformation must be integrated into business strategy.
According to Forbes, since the start of the COVID-19 pandemic, Sainsbury Supermarkets in the UK reported that their in-store shopping app accounted for up to 50% of purchases in some stores and 37% of total sales across all of their stores in Q2 2020/21. Customers use the app to scan their purchases with their smartphones, skipping the queues and paying instantly at smart check-out points.
According to the same report, Tesco, UK’s largest retailer, plans to open checkout-free stores, where customers will be able to scan items as they shop and be automatically charged for their purchase when they leave the store, eliminating the need for check-out points completely.
Finally, with innovations such as in-store facial recognition payments, Alibaba’s Freshippo stores in China have taken check-out-free shopping to new heights. Freshippo describes its future vision as never transitioning from physical to digital, but rather seamlessly integrating online and offline, a concept they call “phygital” retail experience.
How can African retailers leverage digital transformation to innovate and achieve long-term sustainable success? Four key focus areas in the particular bear investigation, namely:
Putting the customer first requires retailers to comprehensively understand the customer buying journey, their perceptions and expectations. Understanding these factors intimately is critical to ensuring a positive customer experience (CX), which can be a significant differentiator in difficult times, such as those caused by the pandemic.
It is important that retailers view customer centricity as a long-term strategic imperative that enables them to better react to changing customer sentiment and demands. For example, technology enables retailers to tailor their offerings to customer preferences with enhanced precision.
The ability to leverage technology to continuously collect information that enables retailers to understand customer needs, as well as measure customer sentiment, is paramount.
For example, a Deloitte report into the retail sector found that pricing and affordability became major drivers of negative sentiment during the early stages of the lockdowns. Therefore technology plays a critical role in enabling retailers to effectively manage CX, through tailoring their offerings, promotions, and loyalty programs to customer needs.
NB: The author of this article is the Marketing Director, SAP Africa