• Shaun Bateman

What does the retail customer of the future look like?

By Richard Flack, MD of Sureswipe

Today’s retailers face a difficult challenge. Online shopping is attracting consumers to the convenience of desktop browsing, and away from the buzz of brick and mortar stores. According to research by World Wide Worx, online retail in South Africa represented 1.4% of total retail sales in 2018, surpassing the R14 billion mark for the first time. Moreover, increasing smartphone penetration is transforming the retail equation. Armed with smartphones and always-on connectivity, modern consumers have radically different needs and demands to the consumer of old.

Looking ahead, South African retailers have to contend with seemingly contradictory messages and trends: are they preparing for a digitally driven world with e-commerce at the epicentre? Or must retailers find a way to blend hyper-connected, digital lives into physical shopping environments that are augmented by new technology?

Arguably, the only way to plan for the retail future is to answer the pivotal question: what does the retail customer of the future look like?

Are we moving towards “Cashless being King?”

With the increased popularity of cash-free or cashless services such as Uber and QR based apps in the main metropolitan areas, cash is less still king in the informal sectors! Some market gurus are forecasting the shift towards a future of a cashless society – as consumers are increasingly demonstrating their eagerness to use their mobiles and tap to pay more and more internationally, a trend we’re keen to see play out.

Around the world, innovations around mobile payments like push payments such as VISA direct and “pin on glass” to enable mobile phones to be used as acceptance devices, as well as contactless payment methods, have skyrocketed, with mobile transactions increasing year on year. In the United States, mobile payment transactions were valued at $49.3bn in 2017, but this figure was dwarfed in just a ten-month period by China, where they reached a whopping 81 trillion Yuan between January and October 2017.

Locally, the shift to a cardless ecosystem has been largely driven by the introduction of app-based payment services such as Zapper and SnapScan, which reportedly services over thousands of merchants across South Africa. Another recent entrant is Samsung Pay, which launched in August 2018. SME’s across South Africa, from Spaza shops to beauty salons, now prefer to operate with devices such as iKhokha, which facilitate a quick and speedy card payment in conjunction with a payment app.

Taken as a whole, the global statistics paint a clear picture: the customer of the future will demand a friction-free, almost invisible payment experience.

Connected People, Connected Things

As of 2017, there were 3.4 billion global Internet users, which equates to 46% of the population, according to Euromonitor. By 2022, that figure will reach 58%. Along with more people becoming connected, more ‘things’ will become connected – with devices of all kinds constantly generating, sharing and analysing data. This is the Internet of Things (IoT), which will become fundamental to purchasing decisions.

What will this look like?

In homes, for example, connected fridges will automatically send notifications when certain essentials are running low – and may even send a grocery list directly to the owner’s smartphone.

For retailers, the growing role of the Internet of Things and overall hyper connectivity means that consumers will be very specific in what they are looking for – and will demand that the retail experience delivers on their needs both seamlessly and quickly.

Retailers will thus have to leverage technology such as Business Intelligence (BI), geo locators and data analytics to create a ‘friction-free’ ecosystem. For example, strategically placed sensors and connected beacons can notify shop assistants when stock levels are running low, and the use of chatbots can ensure that when consumers are online they receive instantaneous and data-driven feedback.

Sustainable Shopping, Sustainable Living

Today’s consumers are becoming increasingly aware of their environmental footprint – which includes their daily purchasing decisions. According to research firm J. Walter Thompson Intelligence, ‘consumers expect brands to be sustainable and are willing to pay more to support those that are.’

In a 2018 study titled New Sustainability, the firm revealed that 89% of those surveyed ‘care personally’ about protecting the planet; 92% said they are trying to live more sustainably, while 83% would always pick the brand that has a better record of sustainability. In short, the customer of the future will have a keen eye on sustainability – and will expect that brands, products and services ‘live by’ sustainable values.

Looking ahead, it is becoming clear that retailers will have to keep pace with the rapid innovation that is shaping almost every facet of the consumer experience - with digital and cardless payments, in particular, becoming a key point of focus. Today, e-commerce is shaping up to be just as important as the physical shopping experience - and both worlds will have to integrate and complement each other.



Lyme Park



South Africa

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