Retailers face an uphill battle, particularly as consumer spending is slowing and putting pressure onto their already-thin margins. In the face of this, digital transformation enthusiasts have made many claims about how technology can change retail’s fortunes. But what does this mean in practice?
Marco Krijgsman can tell us. Dell Technologies’ EMEA Business Development Manager for IoT, Safety & Security, and Computer Vision, shared his insights during a recent trip to South Africa. He reflected on what is happening in global retail and how these examples are being applied.
“Retail margins are like this,” he says, holding up two fingers to illustrate a thin gap. “And you have to be efficient in what you’re doing. The key to unlocking those efficiencies is data, which is why digital technologies are so crucial to retailers.”
Specifically, he expanded, it has to do with analytics. The faster and better a retailer can crunch its data to find meaningful answers, the more it will grow its margins.
“You can measure the traffic of customers in your shop – what they do – or your stock behaviour, shrinkage, faulty or double-scans… Analytics is a powerful ally for retailers.”
Examples of these improvements range from normal operations to exciting revenue opportunities. But before we touch on those, it’s essential to know what sits behind all of these capabilities.
The ghost in the shell
The living force in technology is software, which leverages hardware to run its tasks. But this synergy also had a cost – software was limited in many ways by hardware. That paradigm shifted decisively in the 21st century. Several changes led to the rapid commoditisation of hardware, as well as more flexible ways to deploy software.
“Consider hardware as a shell,” says Krijgsman. “Even something like a vending machine is no longer a big cost. It’s just metal and buttons. The intelligence sits in the software and how you can deploy it to different places.”
To illustrate the point, he raised a project currently being delivered by Dell Technologies. Dell and its partners are currently working with airports and retailers across Europe to install what he calls ‘Vending at the Gate’. These are vending solutions that extend the points-of-sale of stores at the airport, targeting hurried travellers or people sitting around after retail hours.
But we all know about vending machines. What is so special about this example? The vending machine is just a branch of the retailer’s point-of sale-system, integrated through software and modern technology infrastructure.
This concept can place vending machines in areas one would never expect. Large enterprises are using vending machines to distribute company devices to employees. Once a person has been provisioned their device, they can show up at any of the offices and pick it up from a vending box. In this case, a vending machine is a wholly internal delivery system for IT departments.
Software can redefine a vending machine’s use while still enjoying the advantages of that system. Once you consider hardware as just a shell, and software as the enabler, many new opportunities open up.
Analytics that works for retail
Vending machines aren’t the only example. Security cameras can also be put to work, collecting information for the business to analyse, says Krijgsman:
“A camera can be your eyes. It can track customer movement for better store planning. It can monitor stock and warn you if you are running out of something. Software can be used to create a ‘click and collect’ service that uses collection boxes, again extending out of your core systems. So you don’t create retail silos. You use software to expand your core business systems into new areas, even different physical spaces.”
Convenient collection, better stock management, access to customers in unlikely places… with the right software in place, retailers can exploit many new avenues. All the above examples also contribute to rich operational data that reveal efficiencies and opportunities.
How can a retailer develop these capabilities? It’s not easy if they are on older infrastructure. The gold standard for analytics-driven retail is real-time data. If a company is still processing data in batches, it isn’t able to make quick decisions based on opportunities or risks in its stores. The same systems that enable such data streams also realise branches and new services mentioned above.
“The more you generate data, you need reliable, scalable infrastructure. You must move from batches to live data streaming. You must be able to see your data live and use it to create efficiencies.”
The crux of Krijgsman’s message is that analytics software is the game-changer, but you need to empower that software to do its job. It must reliably extend operations to new areas, such as vending machines at airport gates, and generate insights from retail data that can be put to work.
By using new-generation technologies such as hyper-converged infrastructure, as well as the rich use-case experience of Dell Technologies and its partners, a suitable technology environment can be deployed for any size operation. These open the way for real-time data, intelligent operations, and bringing retail services to customers in new and exciting ways. The support of Dell Financial Services can make these possibilities affordable and secure a clear return on investment.
Margins might be narrow for retailers, but there are many opportunities to improve the situation. Modern technology is the thin wedge that opens up software and data, improving profits and customer satisfaction.
How retailers must respond to life under lockdown
As businesses settle into lockdown, South Africa’s largest second-hand retailer, Cash Crusaders offer other retail businesses – that have also been forced to close, some advice and recommendations on preparing for, and managing through the lockdown. The group that have been operating for over 20 years with over 220 stores nationwide, also offer advice on considerations retail store owners – and other businesses, should make as the country makes their COVID-19 economic recovery.
Follow the rules
Ensure that you follow the rules set out by our President for the lockdown. As bitter as this pill may be to swallow, the longer-term benefits for our country and our businesses far outweigh the frustration and anxiety you may be feeling now. This is not a time to break the rules. #StayAtHome. It is a time to practice human responsibility, not complain about Human Rights being compromised. Countries who initially implemented loosely managed lockdowns, have had to extend to get the pandemic under control, so strict rules from the get-go will prevail in the fight against the virus.
Secure your stores
By now you should’ve secured your valuable goods and should have ensured all your security systems are in good working order. If you haven’t already, make sure your security companies have your correct contact information. Make sure your necessary insurance cover is up to date.
Keep your staff informed
They are and continue to be your most important asset!
By now, you may have needed to investigate UIF benefits to compensate for your employees loss of income. The Minister of Employment and Labour, T.W Nxesi has recently announced measures that the Department will put in place under the current special circumstance relating to the Corona virus (COVID-19) and its impact on UIF contributors.
The Temporary Employee/Employer Relief Scheme (TERS) has been set up under the auspices of the Unemployment Insurance Fund (UIF). Employers apply for the TERS on behalf of its employees.
The TERS has two distinct advantages over UIF
- All employees qualify for up to 3 months of benefits, irrespective of how long they have contributed to the UIF and
- TERS will not pay any employee less than the minimum wage.
You can benefit from the TERS by sending an email to firstname.lastname@example.org. Applicants will then receive an automated response which outlines the steps you will need to take, as well as the details surrounding them – including the requirements to claim benefits. During the lockdown period, the Department of Labour will not accept manual applications (to reduce physical contact and risk of the virus spreading), this is to reduce contact between people to curtail the spread of the pandemic. A hotline number has been created by the UIF (012-337 1997) for Covid–19 TERS Benefit enquiries during the lockdown period.
Be sure to be calm when addressing any concerns with your team – they are anxious and nervous of what the eventuality of this outbreak may be.
Communicate with your bank
Make sure you’ve been in touch with your bank (as they are still operational) and discuss any loan repayment relief or postponement over the lockdown period (the banks have termed this a “payment holiday”). Work with them on a cash flow plan as once the lockdown has lifted, trading businesses will need liquid cash.
Contact your landlord
Ensure you’ve connected with your landlord to discuss and agree on any possible repayment or rent relief/payment holiday they may be able to offer you. Keep the channels of communications open with your landlord and bank – rather over-communicate than not communicate enough.
Keep communication open with your customers
The country may be on shutdown, but the internet isn’t. Communicate with your teams and customers by whatever necessary and relevant communication channels you have available to you – website, social media, PR/Marketing teams, newsletter dissemination etc.
Use this time wisely
Amidst all the chaos this time brings, there is also a silver lining. We all have time at this stage, but how many of us make valuable use of that time? Particularly when it comes to family. Business is demanding most times so with a forced shutdown of business it give you the time to spend with your family, catch up on outdated maintenance around the house and a period of rest. This lockdown period will also afford you uninterrupted strategy time. Take the time to reflect on areas of your business you can improve or evolve. Strategise ways to do things better or differently. Use the resource available via your own business network as well as the countless online content that is available, to work on a plan for the way forward. Consider your financial, loan and other business administration processes you have in place and look at new ways to optimise the channels and areas you’re working with or within. A host of online learning facilities offer short courses – perhaps consider upskilling yourself or members of your team by signing up for one of these too.
“These are some of the steps we’ve taken within our own organisation,” says Sean Stegmann, CEO of Cash Crusaders. “Having been in this business for as long as we have has afforded us the wealth of experience we’re able to share with our franchisees and other retail business owners to help navigate the next few weeks and recovery period,” he says. “Take it one day at a time and know that the decisions we’re being forced to make today will mean a future for us tomorrow, both in business and in health!,” he concludes
Vodacom cuts cost of smallest bundle by 40%
The country’s largest mobile operator has kept to a promise made last month to slash the price of entry-level data packages
Vodacom has cut the data price of its lowest-cost bundle by 40%, reducing the price of a 50MB 30-day bundle from R20 to to R12. This follows from the operator’s promise in March, when it announced a 33% cut in the cost of 1GB bundles, to reduce prices of all smaller bundles by up to 40%.
Vodacom’s various 30-day data bundle prices will be cut across all of its channels, with the new pricing as follows:
|30-day bundle size||New Price||Reduction|
Vodacom confirmed it will provide free data to access essential services through Vodacom’s zero-rated platform ConnectU with immediate effect. The value of these initiatives, it says, is R2.7-billion over the next year.
“Vodacom can play a critical role in supporting society during this challenging time and we’re committed to doing whatever we can to help customers stay connected,” says Jorge Mendes, Chief Officer of Vodacom’s Consumer Business Unit. “Since we started our pricing transformation strategy three years ago, our customers have benefitted from significant reductions in data prices and the cost of voice calls. Over the same period, we invested over R26 billion in infrastructure and new technologies, so our customers enjoy wider 2G, 3G and 4G coverage and vastly increased data speeds.”
The latest data reductions will complement the discounted bundle offers that will also be made available to prepaid customers in more than 2,000 less affluent suburbs and villages around the country. For qualifying communities to access further discounted voice and data deals, they need to click on the scrolling ConnectU banner on the platform via connectu.vodacom.co.za
ConnectU – which is a zero-rated platform – also went live this week. It will provide content aimed at social development and offers a variety of essential services for free. Learners and students enrolled in schools and universities can access relevant information for free, with no data costs. The ConnectU portal includes a search engine linked to open sources such as Wikipedia and Wiktionary as well as free access to job portals; free educational content on the e-School platform; free health and wellness information and free access to Facebook Flex, the low data alternative to Facebook that enables customers to stay socially connected.
Vodacom’s popular Just4You platform has been a significant contributor to the approximately 50% reduction in effective data prices over the past two years. Substantial cuts in out-of-bundle tariffs and the introduction of hourly, daily and weekly bundles with much lower effective prices have also driven increased value and affordability, resulting in R2-billion in savings for customers in 2019.