RETAILTECH
How SA's retail ecommerce is primed for transformation
by Tebogo Legodi, Damir Turkovic and Mushambi Mutuma
South Africa's ecommerce sector is on the brink of major disruption in 2024, with various trends and technologies aligning to redefine the online shopping landscape. It is projected that the ecommerce industry in South Africa will exceed a value of R400 billion by 2025, with more than 1 billion transactions per year. With over 80% of South Africans owning smartphones, mobile commerce dominates, emerging as the channel of choice for online shopping.
Here's a closer look at trends that are set to define the South Africa’s ecommerce scene in the coming year.
When tech meets human ingenuity: Embrace AI now
Artificial Intelligence (AI) is a game-changer in the retail and ecommerce industry, revolutionising various aspects of the business. AI enhances the customer experience through personalised recommendations, chatbots for real-time assistance, and visual search capabilities. It optimises supply chain operations, from demand forecasting to inventory management, improving efficiency and reducing costs. Furthermore AI-driven dynamic pricing strategies and fraud detection mechanisms contribute to a secure and competitive environment.
In a recent collaboration, a global athletic apparel retailer in partnership with a leading global consulting firm aimed to strengthen customer service and increase sales and margins by improving store-level planning, forecasting and replenishment for nearly 500 international stores and online sales, by designing and deploying an end-to-end AI solution that allows for data-driven decision-making to strategically improve each phase of the go to market cycle. Implementing AI solutions such as automated inventory management has yielded significant benefits for the company. By leveraging data for more accurate forecasting, the retailer achieved an 18% reduction in inventory forecast errors.
The automated system empowers planners to optimise product mixes for individual stores, enhancing customer service and driving increased sales and margins. Planners utilise predictive models to identify products likely to sell based on various factors, boosting opportunities for full-price sales. Quick insights into product availability, transit status, and eligibility for shipment enable efficient decision-making. Automated alerts help to proactively address inventory issues, resulting in a 15-20% improvement in store-level supply planning and a 14-35% increase in inventory productivity. The ongoing collaboration, leveraging AI, analytics, and automation, continues to enhance performance across the company, positioning it for accelerated growth and resilience. The company achieved a record breaking ROI through an enhanced store-level inventory strategy by driving more full-price sales.
Amazon = The opportune time to act!
The entry of ecommerce behemoth Amazon will be the most disruptive catalyst. The competitive force compels innovation, driving the rapid adoption of technologies like AI and fostering modernisation. Amazon's customer-centric approach will incentivise local retailers to enhance their customer experiences both online and in-store, promoting customer retention. The need to match Amazon's fast shipping times prompts retailers to upgrade logistics and optimise supply chains. The heightened competition underscores the value of physical stores, emphasising in-store experiences and human connections. While local retailers face marketing urgency, they can explore niche segments overlooked by Amazon for white space opportunities. Successfully competing with Amazon builds ecommerce confidence, providing a new sales channel through Amazon's marketplace, attracting top-tier talent, and ultimately catalysing innovation and reinvention in the market.
Time to innovate is now
A recent success story is that of a global consulting firm partnering with a leading multinational bottler to rapidly digitise their African operations. Bringing deep expertise honed from global engagements, created and integrated an end-to-end scalable eB2B platform spanning six countries in just 12 months. This sweeping digital upgrade established a solid foundation for the bottler to build upon. They further drove value by developing a pioneering web app proof-of-concept that confirmed the significant market demand for mobile capabilities. Yet this marks only the beginning, with the consulting firm collaborating with the bottler to launch a transformative African enterprise marketplace by 2024.
By tapping into the strategists' intimate knowledge of local pain points, this platform will empower African informal traders and SMEs through improved supply chain transparency and access to goods, services and credit.
Tebogo Legodi is Sales & Commerce Advisory Lead, Africa at Accenture. Damir Turkovic is Commerce Strategist at Accenture. Mushambi Mutuma is Sales & Commerce Lead, Africa at Accenture.