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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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Ford speeds into esports

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Across the world, millions of people every day get behind the wheel of a virtual Ford vehicle and enjoy racing against friends and as part of online communities. Now the company is going to be seeking out the best online racers to form its first-ever esports teams.

Starting at Gamescom, Europe’s leading trade fair for digital games culture, Ford will recruit national Fordzilla teams for France, Germany, Italy, Spain and the UK – as well as a European team consisting the star players from each national team.

In 2019, the global esports market is expected to generate revenues of about R16, 7 billion ($1.1 billion) up 26.7% year on year; the audience will reach 453.8 million people, made up of 201.2 million esports enthusiasts and 252.6 million occasional viewers. Contrary to the popular stereotype, the average gamer is in their early thirties.

Ford is increasingly intrigued by synergies between gaming and mobility and how they could help shape the way in which we all get about in the future – whether that is as commuters, as passengers in autonomous vehicles or simply enjoying the thrill of performance.

“The distinction between real and virtual worlds is blurring. Gaming is now a part of mainstream culture. Top gamers challenge professional race drivers in real life and many of our day-to-day activities are ‘gamified’, from using fitness apps to collecting loyalty points for a free coffee,” said Amko Leenarts, director, Design, Ford of Europe. “Harnessing the passion and expertise of the gaming community will help evolve our thinking around what future journeys will look like – something that we are all committed to and really excited about.”

In 2017, Ford became the first manufacturer to host a stand at Gamescom, which boasts more than 1,000 exhibitors that attract hundreds of thousands of visitors every year, and last year, the company pioneered the first-ever vehicle reveal at the show – unveiling the Ford Ranger Raptor.

Among the games that Fordzilla will compete on is the award-winning Forza Motorsport 7, developed by Microsoft Game Studios’ Turn 10 Studios. The Forza franchise is the best-selling racing franchise of this console generation and is home to one of the largest racing communities in the world. Millions of people worldwide play Forza games each month with 1 million players choosing Ford vehicles.

“We are pleased to see Forza Motorsport continuing to be the game of choice for big brands like Ford as they launch esports initiatives,” said Justin Osmer, Sr. Manager of Partnership Development at Turn 10 Studios, the creators of Forza Motorsport. “With millions of fans playing Forza games, we’ve seen significant growth in the numbers who want to compete, or simply spectate, in esports and it’s great to see a long-standing partner like Ford Motor Company bringing even more opportunities to participate.”

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How tech is keeping us young

Research by Lenovo revealed people who use tech feel, on average, 11 years younger.

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Technology is making the world feel younger, healthier and more emotionally connected, reveals new research by Lenovo, suggesting a growing relationship between technological innovation and wellbeing.

The research, which surveyed over 15,000 individuals from around the globe, from the US, Mexico, Brazil, China, India, Japan, UK, Germany, France and Italy, not only found 40% of global respondents feel “a lot” or “somewhat” more youthful thanks to technology, but on average it made them feel younger by 11 years.

This rings most true in China, where 70% of Chinese respondents said technology made them feel more youthful, which could be perhaps due to technologies ability to build connections between generations, especially those who might have once felt disconnected from tech-savvy youngsters. For example, grandparents are now able to better communicate with their grandchildren via smart technology due to its growing ubiquity and ease of use.

The research suggests that this sentiment is felt world-over, across genders and ages. “To know how to operate newer technology makes me feel younger” one US woman, said.  Another woman, from France, also stated, “Compared to the younger generation who are born with all these technologies, my adaptability makes me feel younger”. On the other side of the globe, one female respondent in India cited tech as making her feel like she “can do anything with it which any youngster can do,” and one Chinese male respondent said: “It helps me catch up with the times – not only gaining more knowledge, but also feel that I’m on-trend; I feel younger”.

The research generally revealed that many older generations think using technology helps them to connect better with younger people as well as feel livelier and more knowledgeable. This is especially evident when it comes to the role smart devices (from PCs, tablets to smart home assistants and more) play in terms of relationships with family and friends. When asked to compare technology today to those of 20 years ago for giving them the ability to feel connected to what is going on in the lives of the people they care about, 65 percent answered it’s “getting better”. While 75% also said technology is improving their ability to stay in touch with family and friends who live far away.

The global research also revealed that tech is helping people when it comes to mental health and wellbeing, offering emotional gains, particularly in parents. Over three-quarters (78%) of working parents stated the ever-connected nature of technology helps them feel more emotionally connected to their children, even when they are away from home. An even larger portion (83%) of working parents agreed that emerging technologies are making it easier for them to feel confident that their kids are safe and secure while they are at work.

Over two-thirds (67%) of respondents in the survey stated they were optimistic about the future of technology and the role tech can play in our lives and society, especially in wellbeing, with 67% believing devices are currently having a positive impact on the ability to improve their overall health. And that’s hardly surprising, considering 84% also said tech has empowered them to make improvements in their lives overall.

Take for instance how one respondent, a 51-year-old woman from the US, highlighted how science is using technology to do great things for amputees, and enabling those suffering from mental illness to better connect with people from all over the world. “I think that the medical breakthroughs we’ve had are a tremendous statement on how we can have a positive relationship with technology,” she said.

The recognition that tech is helping to improve the quality of life could also be a result of the time it tends to save people. Half of respondents across all markets (50%) feel their smart devices save them 30 minutes or more a day by helping them do something faster or more efficiently. Similarly, over half (57%) agreed smart devices, such as computers and smart home devices like smart displays and smart clocks, are making them more productive and efficient, the highest perceptions of which were seen in China at 82% and India at 81%.

In terms of personal health, 36% of respondents said smart devices have made it easier for them to access health care providers and make doctor’s appointments, and a further 39% of those under 60 years of age stated modern tech makes it easier for seniors to contact emergency services.

A 23-year-old woman from India, for example, expressed her belief that the technological advancement of medical science is helping people better fight diseases and potentially cure them. “Lives of people are better off nowadays because they know ways of curing such health hazards,” she said. “Through technology, increasing the life span of an individual is very much possible.”

Psychologist and founder of Digital Nutrition, Jocelyn Brewer, said: “Keeping up with advancements in technology can feel like a full-time job, but it can have positive impacts on people’s sense of themselves and their age. While older people are stereotyped as being techno-phobic or inept at staying on-trend, this research points to the fact that maintaining currency in the digital space helps people feel more youthful, more connected to young people and youth culture, which in turn is a social currency for feeling valued and a sense of belonging or in ‘the know’.

“It’s this tech knowledge that drives the perception of feeling younger, without having to revisit the angst of our adolescence!

“Staying connected to the people we care about is a wonderful feature of technology. And while it is no replacement for face-to-face connection, it is a valuable supplement to communication for those who might be geographically divided. Parents can manage a range of responsibilities and provide increasing appropriate autonomy to teenagers through a variety of communication tools, reminders and systems that can help take the struggle out of the daily juggle.”

Dilip Bhatia, Vice President of User and Customer Experience, Lenovo, said: “There is a growing relationship between innovation and wellbeing as smart technologies are not only helping people globally to stay more connected but aiding wellbeing in the form of compassion and empathy by building better connections between them.”

“Technology has a transformational ability to unite people across generations and walks of life around the world, with the potential to help them to live healthier and more fulfilling lives. At Lenovo, we passionately believe in creating smarter technology for all, which is why we focus on making our technology accessible, blending into the everyday lives for the benefit of more people.”

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