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Retailers must stop feeling threatened by online

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Retailers threatened by online competitors are distracted from the truth that consumers are just consumers and should be treated the same, regardless of where they are shopping, writes SIMON VAN DER MERWE, Head of corporate and trade business at weFix.

Headlines like these appear regularly in the South African business and trade press: “Online shopping blasting holes in traditional retailer profits” and “Retailers acknowledge the threat of online retail on physical stores”.

Statistics tell a different story.

According to World Wide Worx, it was only in 2016 that online retail sales made just a 1 percent dent in overall retail sales. Last year, Effective Measure’s E-Commerce Industry report noted that more than half of respondents had still not purchased anything online.

Then, just-released Statistics SA Retail Trade Sales figures show a 5,3 percent increase year-on-year in December 2017, with an overall increase of 3 percent in 2017 compared to 2016.

In November last year – the month of Black Friday, Small Business Saturday and Cyber Monday, neatly packaged by some as Black Friday weekend – Stats SA recorded the highest retail trade sales figures in the second half of 2017.

The irony is, of course, that these massive sales originated online in the United States and have only recently seeped into local brick-and-mortar stores looking to cash in on the pre-festive-season-shopping extravaganza.

By my estimation, traditional retail is as alive and well as it can be given the ongoing economic and political uncertainty that was South Africa’s reality last year.

Still, this is no reason for brick-and-mortar retailers to be complacent.

After all, a third of Effective Measure’s respondents shop online between once a month and once a week, and another third are shopping online more frequently than they did the previous year.

My advice to brick-and-mortar retailers, the cornerstone of our weFix footprint and therefore a cornerstone of our strategy, is to leverage the many ways that online stores will never be able to compete with ‘real-life shops’.

  • Customer service from real people still has an edge – invest in sufficient staff on the floor, train them properly, and select personnel with engaging personalities.
  • Online stores do not have passing foot traffic – sure, visitors may stumble across the online store while browsing the web (and a site’s design should certainly be as enticing to these users as possible), but this traffic is arguably less focused and of less volume than customers ‘captured’ in a shopping mall or other retail space. Take advantage of this fact by making it easy for customers to visit you. In other words, select your store location and décor very carefully.
  • Bring your brand to life for all five senses – granted, it can cost more to invest in bricks-and-mortar store space and inventory, depending on the sophistication of a competing online store. However, it is so much easier to create a unique, holistic, creative brand and shopping experience in the physical world and this is something that retailers should take advantage of when design their spaces, planning inventory etc.

A final statistic worth reflecting on – again from Effective Measure – is that 30 percent of respondents report that they often browse in-store before making a purchase online. By contrast, 28 percent browse online, then purchase in-store.

I believe this reflects the trend towards online and offline shopping becoming just shopping.

A local brand that is recognising the need to unify channels, rather than separate them, is local ecommerce darling YuppieChef. In October last year the company opened a bricks-and-mortar store in Cape Town’s Willowbridge Mall.

Designed by well-regarded interior design company ARRCC, this is a far fancier retail experience than the space from which one could previously collect orders ordered online.

Our approach has been focusing on partnerships with mobile device brands, insurance companies and other machine manufacturers.  weFix originally worked only with Apple devices, but we have since added Samsung, LG and Huawei to the suite of mobile devices that we repair, as well as Yoco wireless card machines and DJI drones.

No longer are we merely a repair shop – we operate sophisticated technician-staffed labs in Cape Town and Johannesburg, supported by a robust framework to manage large corporate trade volume for the likes of FNB and Energizer.

It will be interesting to see how the imminent 1% VAT increase (South Africa’s first since 1993) and increased luxury goods taxes which we anticipate will affect at least some mobile devices, will affect the retail trade sales figures in the coming months. I suspect that the upward trajectory will continue, even if at a somewhat more modest pace.

Ultimately, I don’t believe that retailers are facing an online vs offline battle at all – we’re battling for consumers, period.

Our challenge is to integrate the best of both worlds into our business models.

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Load-shedding leads
local searches

South Africans are searching in the dark, according to the latest Google Search trends.

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With more 1 million search queries generated in the space of 76 hours, load-shedding was by far the top trending search on Google South Africa this week.

Valentine’s Day came a distant second.

After news emerged last Sunday of the impending stage 3 load shedding, South Africans had generated more than 1-million load-shedding search queries by the time Tuesday came around:

  • “Loadshedding schedule” – generated more than 100k searches on Sunday
  • “Load shedding schedule” – generated more than 100k searches on Sunday
  • “Eskom load shedding” – generated more than 100k searches on Sunday
  • “Load shedding Cape Town” – generated more than 50k searches on Sunday
  • “Load shedding schedule” – generated more than 400k on Monday
  • “Load shedding Johannesburg” – generated more than 20k searches on Monday
  • Load shedding schedule” generated more than 200k search queries on Tuesday

Leading up to Valentine’s Day, South Africans generated close to 300k search queries related to the romantic festival, including searches for quotes and gift ideas:

  • “Valentines Day” generated more than 100k search queries on Thursday
  • “Happy Valentines Day Images” and “Valentines Day Images” generated more than 10k search queries each on Thursday, with “Happy Valentines Day 2019” generating more than 20k search queries on Wednesday
  • “Valentines Day Specials 2019” generated more than 5k search queries on Thursday
  • “Love quotes” generated more than 5k search queries on Thursday
  • “Valentines Day quotes” generated more than 100k search queries and “Valentine messages” generated more than 50 000 search queries on Wednesday

Search trends information is gleaned from data collated by Google based on what South Africans have been searching for and asking Google. Google processes more than 40 000 search queries every second. This translates to more than a billion searches per day and 1.2 trillion searches per year worldwide. Live Google search trends data is available at https://www.google.co.za/trends/hottrends#pn=p40

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Showmax invites
student films

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Thanks to the growing popularity of video-on-demand services, there’s a new opportunity to help kickstart the careers of local filmmakers.

Numerous Hollywood blockbusters (District 9Tomb Raider 2018, and The Avengers: Age of Ultron to name a few) have featured substantial shoots in Johannesburg and Cape Town. While providing great opportunities for SA’s production talent, aspiring writers and directors don’t get the same benefit.

So where can local creatives showcase their work? Broadcast TV isn’t a natural home for unknown short films, and while self-publishing platforms are readily available hosting options, it’s tough to get noticed and get traffic when competing with videos from across the planet.

But with the emergence of video-on-demand services into the mainstream, there’s now a solution. The African film school AFDA has teamed up with the streaming service Showmax to give local talent a much larger platform than ever before. From 18 February, eighteen of the best recent short films made by AFDA students from their Johannesburg, Cape Town, Durban and Port Elizabeth campuses will be live on Showmax. Drama, documentary, fantasy, and animation are all represented, in pieces running from under eight minutes to almost half-an-hour long. The full list of movies is included below.

Teresa Passchier, CEO of AFDA, said: “AFDA, Africa’s number-one school for the Creative Economy, is proud to kickstart this exciting and meaningful journey with Showmax and AFDA students, ensuring emerging young African filmmakers’ voices are heard and given a platform. It’s ground-breaking to share young, local, culturally relevant content on the same platform as Hollywood blockbusters. I am certain that this unique initiative will serve to boost and develop the African film industry and the careers of many young South African and African students alike.”

Included in the short films coming to Showmax are the award winners Junior and O-PunchaJunior, directed by Bert Dijkstra, picked up the Audience Award in the Made in South Africa Competition at the shnit Worldwide Shortfilmfestival Awards 2017. O-Puncha, directed by Adam Hansen, won two awards at the 5th annual Eldorado Film Festival: Best Student Made Short, and Best Editing – Alexander La Cock.

Another celebrated film is Sicela Amanzi directed by Mlu Godola, which talks to the subject of water shortage. The film’s heroine Zoleka is a mild-mannered young woman forced to go to extreme lengths when a small community’s only source of water unexpectedly collapses. The power of films like this is they shine a light on critical topical issues in new ways.

Speaking about working with the film school, Candice Fangueiro, Head of Content for Showmax, said: “There’s immense depth of filmmaking talent in Africa and it’s a privilege to be able to give that talent a home and a platform. Showmax is becoming part of the fabric of film and TV production in Africa, and importantly we’re doing this as a partner rather than just as a consumer. This is a key competitive advantage of being local and something we aim to continue to work on.”

AFDA is an Academy Award-winning institution, founded in 1994, and the first and only African film school to win an Oscar – for the Best Foreign Student film in 2006, the postgraduate film Elalini, directed by Tristan Holmes.

The full list of AFDA short films coming to Showmax is as follows:

Film titleDirectorGenre
Lullaby from the CryptKeenan Lott & Raven DavidsAnimation
Ko Ga CherenyaneSibonokuhle MyatazaDocumentary
IzilwaneKyllian RouxDrama
MallemeuleJaco Van BoschDrama
Canal StreetBrodie MuirheadDrama
On the FenceWarrick BewsDrama
The Righteous FewLindo LangaDrama
Hlogoma PeakLuke AhrensDrama
Frozen FlameCameron HeathmanAnimation
WolfBrett van DortFantasy
The Walk HomeSisanda DyantyiDrama
BearWesley RoodtDrama
JuniorBert DijkstraDrama
O-PunchaAdam HansenDrama
UmngenoSiphosethu NdungeDrama
DoreenLuvuyo Equiano NyawoseDrama
ForeverLindo LangaMusical
Sicela AmanziMlu GodolaDrama

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