Major South African retailers are rapidly expanding into new markets in Europe, the US and Australasia, and are seeking advanced systems and new operating models to underpin that expansion.
Razat Gaurav, vice-president and GM at JDA, says overseas expansion has been one of the key themes to emerge in his talks with leading local retail organisations. He was speaking after the JDA retail seminar.
“Key themes and points of concern that were apparent in South Africa included expansion beyond Africa into global markets; and how retailers can better understand the generational changes happening in their consumer bases to drive improved merchandising, sales and supply chain,” he says.
“As recently as three years ago, South African retailers were focused primarily on expansion into Africa, but now we see them expanding and making strategic acquisitions overseas. This is partly due to currency issues and the fact that many rely on imports from overseas.”
Guarav says that, while South Africa’s major retailers are advanced in respect of their processes and thinking in many respects, they are still grappling with the new approaches needed to managing both bricks and mortar and online environments.
“Retailers are preparing to manage these channels in a more seamless way, both to support operations and to meet changing consumer demands,” he says.
“We see a perfect storm happening in retailing right now – consumers are changing, the way they buy is changing, expectations from markets and shareholders are increasing, and the amount of data in circulation has exploded. If retailers if want to be competitive they must know how to leverage the data, and they must be strategic about transformation. It is time for them to pivot.”
The recent third annual JDA/PwC survey of more than 300 retailers found that only 18% of CEOs say they have eliminated operational silos and are delivering seamless omni-channel shopping experiences for their customers.
The report noted that retailers that have eliminated operational silos and now deliver a customer-centric omni-channel shopping experience and seamless operations from order to fulfilment expressed greater confidence in revenue growth (59% versus 48% average for all CEOs) and profit growth (63% versus 43%) than their peers.
CEOs that have removed silos are also achieving significant competitive advantage though lower costs and increased investments in customer-centric services.
As the environment becomes more competitive, retailers need advanced systems and solutions to enable them, says Guarav. They need to manage the next generation of processes, moving from a product- centric to a consumer-centric approach.
“This is a very different way of thinking and requires a major shift for planners and buyers, with greater systems awareness and processes coming with more intelligence and automation,” he says.