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What Amazon’s 20th means

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Yesterday marked Amazon’s 20th anniversary. SONELIA DU PREEZ, Country Marketing Manager at EMC Southern Africa reflects on how far the industry has come over the past two decades.

Yesterday Amazon celebrated its 20th anniversary. As well as being yet another indicator of how quickly time passes, the anniversary provides an opportunity to reflect on how far the retail industry has come over the past two decades and how far it can still travel.

Amazon’s success has to a large extent been born of data. It has, for example, used customer data not only to make the retail experience simpler, but also to personalise it. The idea that an online shop would recommend new purchases based on past choices was truly revolutionary and an early indicator of the promise of big data analytics.

Over the next 20 years online shopping is going to evolve further and will eventually completely overwhelm the retail space – to the extent that the traditional bricks and mortar based retailer will have to innovate significantly to remain relevant.

Technology will strengthen customer experience

Indeed, it is possible that many shops will become little more than showrooms for products that can only be bought online. Consumers will also leverage data more – to identify where they can obtain goods at the lowest price with the best customer experience. The most successful retailers meanwhile will continue to use technology as an enabler to strengthen and deepen relationships with customers. Customer loyalty will be achieved (both in terms of attraction and retention) by improving the customer experience.  Technology will be the key enabler here to ensure that customers will be provided with the best and same customer experience through every touch point.

The impact of data analytics on the online world will continue to be huge. Today online retailers can, if we ask them to, remind us of birthdays and anniversaries. In the future, not only will we be reminded of imminent birthdays but predicative analytics will be able to choose the perfect gift and even write the card for us. No more missed celebrations, and no more gifts destined for the bin.

Making mobile work harder

If the future of retail is predictive, it is also mobile. All online businesses will in the future be built from the mobile device up. Improvements in smartphone software will mean that the ‘Siri’ of the future will be even more impressive. Drawing on vast data lakes, our digital avatars will become shopping assistants, recommending new retail experiences based on our individual tastes and habits. Consumers will be able to set these retail avatars according to taste. Some consumers will abdicate responsibility for all shopping tasks to these digital assistants, safe in the knowledge that the choices the technology makes on their behalf will be as good or better than the ones they would make for themselves.

Interestingly, this digital shift will also see a decline in impulse buying. Big data, mobilisation and social media combine to mean that find exactly what we want, when we want and where it is cheapest. The days of browsing through stores and stumbling across goods may well be coming to an end, a trend that will impact on the ways in which brands market their products in the field.

Delivering to the customers’ needs

Finally, there is every reason to believe that the way in which goods are delivered is set to change. Social network delivery services are going to disrupt the industry, allowing users to order delivery-on-demand. This will impact the way in which users can receive deliveries. For example, it will be possible for shoppers to have drivers wait while they try on the clothes they have ordered, and then return unwanted goods by the same courier. The whole experience will be much more focused on meeting the customer’s needs rather than those of the delivery company or retailer.

The possibilities digital transformation promises retailers and customers alike are endless, and over the next twenty years the options made available to consumers will increase exponentially. New Amazons will emerge with business models that we can scarcely imagine today. One thing is for certain however – it’s going to be a very interesting couple of decades.

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SA consumers buy 3.2m smartphones in Q1

Smartphone sales in South Africa grew by 12.4% year-on-year in the first quarter of 2018, reaching around 3.2 million units for the period.

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However, the value of the smartphone segment increased by 22.8% as sales of entry-level devices to low- and mid-income consumers continued to drive the market, according to point of sale data from market research firm, GfK South Africa.

GfK South Africa’s data reveals that telecommunications retail enjoyed a strong start to the year, with revenue growing 22.4% year-on-year. The growing popularity of phablets and higher unit prices (as a result of a weaker rand) helped to drive this increase in revenue, against a backdrop of low or negative growth in many segments of the consumer technology market.

“The mobile device market showed good growth in the quarter, despite rising prices during the period under review,” says Norman Muzhona, Solutions Specialist for Telecommunications at GfK South Africa. “In addition to the exchange rate, the introduction of popular, new mid-tier devices by several leading vendors helped to drive higher retail revenues in the telecoms market.”

Information technology retail revenues for the quarter contracted 4.8% compared to 2017, largely because of decreasing monitor prices and a 38.9% decline in tablet revenues. However, desktop computer revenues grew 39% and mobile computing revenues grew 6.5% year-on-year, thanks to higher prices and increased sales of higher-end products.

Says Berno Mare, Solutions Specialist for IT, Office Equipment and Value Added Services: “Retailers introduced new computing devices priced in the R3000 band during the quarter and enjoyed surprisingly strong demand for these entry-level units.

“Telcos enjoyed robust growth in mobile computing retail sales, thanks to credit deals, subsidised contracts and attractive data offers. However, South African consumers are heavily indebted, which may dampen growth for the rest of the year.”

With consumers rapidly migrating to smartphones, sales of traditional mobile phones continued to decline, down 1.6% year-on-year to around 2 million for the quarter. However, the exchange rate and the introduction of higher-priced brands helped to drive a 8.9% year-on-year revenue increase in mobile phone revenues during the period under review.

This follows the 21% drop in mobile phone unit sales in the first quarter of 2016 compared to the same period in 2015. “Operators continue to lead the transition from feature phones to smartphones as they pursue higher data revenues,” says Muzhona. “The entry-level market for smartphones is fiercely competitive, and the minimum specs of lower cost smartphones is improving all the time.”

GfK South Africa expects the migration from mobile phones to smartphones to accelerate in 2018. However, it remains to be seen if the introduction of 4G-enabled, Voice-over-LTE-ready feature phones will have any impact on the South African mobile phone market.

Sectors of the consumer electronic market that showed strong growth for the first quarter of 2018 include loudspeakers—revenues up 21.6% year-on-year, thanks to demand of Bluetooth-enabled product—and ultrahigh definition (UHD) panel TVs—where revenues grew 33%, thanks to the growing affordability of the technology. UHD unit shipments were up 76%, while the average selling price of the products fell 24%.

Other market highlights for the first quarter of 2018 include:

  • Photo category revenues were up 8.1% year-on-year.
  • Small domestic appliance revenues grew 8%, following a 10.3% decline in Q1 2016 over Q1 2015. Hot air fryers sold well, as did kettles and toasters.
  • Major domestic appliances showed small year-on-year growth over Q1 2016, despite a decline in average selling price in many sub-categories of this market. Cooling products continued to make the highest contribution to growth in this segment.
  • Office Equipment revenues declined 18% year-on-year, led downwards by lower printer and cartridge sales volumes.
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What kids want online

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Kaspersky Lab’s latest report on the online activities of children – based on statistics received from its solutions and modules with child protection features – highlights children’s online activities and the importance of protecting them when online. For example, video content globally, comprised 17% of searches over the last months. Although many videos watched as a result of these searches may be harmless, it is still possible for children to accidentally end up watching videos that contain inappropriate content.

The report shows anonymised statistics from Kaspersky Lab’s flagship consumer solutions for Windows PCs and Macs that have the Parental Control module switched on and from Kaspersky Safe Kids, a standalone service for Windows, Mac, iOS and Android devices.

In South Africa, communication sites (such as social media, messengers, or emails) were the most popular pages visited by computers with parental controls switched on – with users in South Africa visiting these sites in 69% of cases over the previous 12 months. Software, audio, and video accounted for 17% of searches. Websites with this content have become significantly more popular since last year, when it was only the fifth most popular category globally at 6%. The top four is rounded off with electronic commerce (4.2%) and alcohol, tobacco, and websites about narcotics (3.9%), which is a new addition compared to this time last year.

The report presents search results on the ten most-popular languages* for the last 6 months. The data shows that the video & audio category – including requests related to any video content, streaming services, video bloggers, series and movies – are the most regularly ‘googled’ by children (17% of the total requests). The second and third places go to translation (14%) and communication (10%) websites respectively. Interestingly, games websites sit in fourth place, generating only 9% of the total search requests.

We can also see a clear language difference for search requests: for example, video and music websites are typically searched for in English, which can be explained by the fact that the majority of movies, TV series and musical groups have English names. Spanish-speaking kids carry out more requests for translation sites, while communication services are mostly searched for in Russian.

More than any other nationality, Chinese-speaking children look for education services, while French-speaking kids are more interested in sport and games websites. In turn, German-speaking requests dominate in the “shopping” category. The leading number of search requests for porn are in Arabic, and for anime are in Japanese.

“Kids in different countries have different interests and online behaviors, but what links them all is their need to be protected online from potentially harmful content. Children looking for animated content could accidentally open a porn video. Or they could start searching for innocent videos and unintentionally end up on websites containing violent content, both of which could have a long-term impact on their impressionable and vulnerable minds,” says Anna Larkina, Web-content Analysis Expert at Kaspersky Lab.

As well as analysing searches, the report also looks into which websites children visit or attempt to visit that contain potentially harmful content which falls under one of the 14 preset categories** for the last 12 months.

The mobile trend is again highlighted in the figures for computer games, which are now in fifth place locally on the list at 3%. As kids continue to show a preference for mobile games rather than computer games, this category will only continue to decrease in popularity on computers over the coming months and years.cleardot.gif

“No matter what they are doing online, it is important for parents not to leave their children’s digital activities unattended, because there’s a big difference between care and obtrusiveness. While it is important to trust your children and educate them about how to behave safely online, even your good advice cannot protect them from something unexpectedly showing up on the screen. That’s why advanced security solutions are key to ensuring children have positive online experiences, rather than harmful ones,” adds Anna Larkina.

The Kaspersky Total Security and Kaspersky Internet Security consumer solutions include a Parental Control module to help adults protect their children against online threats and block sites or apps containing inappropriate content. In turn, the Kaspersky Safe Kids solution allows parents to monitor what their children do, see or search for online across all devices, including mobile devices, and offers useful advice on how to help children behave safely online.

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