Future of retail linked to technology‚ internet

Levine was speaking at the South African Council of Shopping Centres Annual Congress in Durban last week.

By global standards‚ e-commerce in SA is relatively limited‚ although online retail sales have shown a steady increase over the past five years as a growing number of tech-savvy consumers turn to the net for bargain hunting.

MasterCard's Worldwide Online Shopping Survey‚ released earlier this year‚ said that the number of South Africans shopping online had steadily increased over the past two years‚ with 58% of respondents saying they used the internet for shopping - an increase from 53% in 2010.

Levine pointed out that South African retailers would need to integrate their online operations and brick and mortar stores to attract customers and increase sales.

"Integrating web and bricks and mortar allows people to shop online but pick up their goods in a retail location. It's also very important for returns‚ to have that real place where people can bring goods back - especially in SA‚ where a lot of people are still not really feeling comfortable about paying online. It also eliminates shipping fees‚ while fulfilling that idea of an instant gratification‚" he said.

Currently‚ more than half of the sales from global retail giant Walmart's online store - Walmart.com are now picked up at Walmart stores in the US.

"For Walmart it's not an either or strategy‚ the web is complementing bricks and mortar - they go together‚ and that is what the future holds for SA as well‚" Levine said.

Fashion retailer Mr Price in July launched their online store‚ which allows shoppers to have their purchases delivered to their street address‚ post office or store for R35.

The retailer aims to use its venture into e-commerce to help it gain market share from rivals Foschini‚ Woolworths and Truworths. Competition in the clothing space has also been boosted with the arrival in SA of foreign groups such as Zara and Cotton-On.

"An online selling capability will enable Mr Price to further strengthen relationships with our target customers‚ who are tech savvy and require a convenient and secure way to get their fashion‚" Mr Price CEO Stuart Bird said.

The store will also be accessible via cellphones. Mr Price Home and Mr Price Sport are expected to follow with online stores next year.

The integration of a retailer's offline and online presence is often referred to as a "bricks and clicks" or "clicks and mortar" business model. It has been easier for traditional retailers with extensive logistics and supply chains to implement this type of model than for start-up companies.

One innovation that has already landed in SA is price checking via barcode scanning.

Online shopping and price comparison directory PriceCheck.co.za earlier this year rolled out an app that allows consumers to point their mobile device's camera at the barcode on any other item supported by PriceCheck. The PriceCheck bar code app then searches for the details of the item via the PriceCheck mobile website.

"They have done over seven million products that you can scan - and they have real time pricing for that‚" Levine said.

So-called "show-rooming" is another trend that Levine highlighted‚ where consumers view products in stores‚ then make purchases on the internet.

"This idea of people going into shopping centres to just look at products but then buying on the internet is definitely coming to SA‚ perhaps slower than other places but it's coming here.

" I'm well aware that the amount of internet penetration in SA is at a relatively low level at this moment but with the advent of more undersea cables‚ the price of accessing the internet going down and becoming more and more mobile; these trends are on a near- to medium-term event horizon‚" Levine said.

According to Arthur Goldstuck‚ MD of internet research provider World Wide Worx‚ once people become experienced internet users‚ their propensity to shop online increases dramatically.

"The key is to convert that propensity into shopping behaviour‚" he said‚ adding that from 2013 the participation curve would rise significantly and quickly‚ leading to growth in the number of online shoppers and shopping options available.