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Mayville Mall. Picture: SUPPLIED/FORTRESSREIT
Mayville Mall. Picture: SUPPLIED/FORTRESSREIT

The rhetoric of “retail is dead” is incorrect. In fact, retail is advancing at a rapid rate to meet the consumer demands for in-store innovation and service solutions for their shopping requirements in this post-Covid era.

This was the view of industry thought leaders who participated in the Fortress Retail Evolution webinar on February 4, hosted by Beyond Binary and 48H CEO Mike Stopforth, including panel members Fortress Reit retail executive director Vuso Majija, Nepi Rockcastle CEO Alex Morar, Bathu Shoes head of retail Tshiamo Mathibela and Cash Converters CEO Richard Mukheibir, and other retail experts.

Scenario planner and futurist Graeme Codrington said the pandemic has accelerated a lot of the trends that were already under way.

“E-commerce is one of the biggest trends at this time, but it’s not merely about putting your products online and then hoping somebody buys them. It’s not competition for traditional retail, it extends and expands traditional retail. You need to develop relationships with your consumers and then personalise your connection with them through the right in-store experiences that give them reasons to keep coming back — it’s not just sales,” said Codrington.   

When discussing the innovations in play right now, Majija said tenant mixes are evolving and changing in response to changes in customer behaviour. “Pre-Covid, we saw space consolidation by tenants, including the closure of non-performing stores. For example, banks closed branches and Edgars closed stores. On the other hand, certain retail categories including grocers, pharmacies and athleisure tenants were opening new stores. This is because shoppers were focusing on essential items, health and beauty products, and changes in clothing preferences.

“Our biggest challenge as landlords at this time isn’t omnichannel retail; it’s economic growth. There is appetite from small and large retailers to open stores, but the current economic situation is the main hindrance.”

SMEs are key drivers of economic growth in the country, and are the type of tenants landlords are hoping to attract to their shopping centres. “Both large and small partners are looking for space — it’s not all doom and gloom. Our priority this year is to try to accommodate as many of those opportunities as possible,” said Majija. 

Mukheibir supported these views, saying, “We couldn’t sell franchises during hard lockdown in our usual face-to-face manner. Our sales model changed to weekly webinars, and within a month I had spoken to more than 100 people about franchising. Subsequently, we’ve sold 11 franchises as at the end of January. There are now more stores, but the size of the stores has reduced, with lower overheads and in turn, more profit. This proved how discomfort has resulted in interesting, innovative solutions that led to growth.” 

Evaton Mall. Picture: SUPPLIED/FORTRESS REIT
Evaton Mall. Picture: SUPPLIED/FORTRESS REIT

Bathu Shoes have directly contributed to economic growth by opening 12 stores during 2020, despite the pandemic and its difficulties. Mathibela shared how this emerging business overcame its challenges: “We don’t have a blueprint for the way we do things. Instead, we focus on innovation and customer experience. For the new stores, we paid a lot of attention to in-store design elements, which have technological features that engage our customers as they approach the store.

“For example, the levitating sneaker machine makes the shoes look like they are floating. We consider the music we play, the images we use and fragrances we have in stores in great detail. Most importantly, our engagement with customers through trained sales executives in a safe manner that makes customers feel secure in-store. We built SA’s first sneaker customisation lab as an extension of customer engagement.”

The conversation about offline or online, this binary notion of one or the other, seems to be fading into obscurity. Retailers are looking to landlords to provide assistance and advice in giving their customers a more seamless omnichannel experience. Morar said Central and Eastern Europe has experienced this shift. 

“We will never go back to the way things were. We’re going to continuously evolve and there isn’t a one-size-fits-all strategy that we can apply. Landlords and retailers are one ecosystem and need to work together to provide the best retail experience. They need to make sure shopping centres are attractive, well located and that the tenant mix is advertised.

“By integrating the various retailers’ concepts into digital advertising, we can ensure we are where the customers are searching. We need to have a joint strategy to approach this omnichannel experience.”

Retailers have realised that customer experience is only as strong as its weakest link. When the retail ecosystem works together to provide operational excellence, it benefits the customers. Most important is paying attention to what customers need and the level of human interaction they are looking for as they come out of lockdown.

Majija said customer experience doesn’t start with the sales executive in store. “It starts with the car guard in the parking area and includes everyone in the shopping centre environment. The entire ecosystem must provide a great experience. Upskilling all staff to interact with customers will increase the interactions and will add to the overall shopping experience.”

Pineslopes Boulevard. Picture: SUPPLIED/FORTRESS REIT
Pineslopes Boulevard. Picture: SUPPLIED/FORTRESS REIT

Consumer behaviour is dictating most of the changes that have been implemented in recent months. The number one priority for customers is convenience. Fortress partnered with a company that focused on “click and collect”. This company opened booths at many of the Fortress centres and there are plans to open more booths this year. In addition, Takealot opened a depot at Pineslopes. “We have seen a huge increase in delivery services such as Uber Eats at a number of our centres, especially those with lots of restaurants and fast-food outlets,” said Majija.

Mukheibir discussed the trend of people thinking about reuse, recycle and repurpose and wanting to live a more nomadic and agile existence. “This trend is playing really well into our hands. People are selling unwanted items in a professional retail environment and others are buying those items at half the price with a six-month guarantee. Value shopping is becoming mainstream now, accelerated as a consequence of Covid and loss of employment.”

Morar is looking forward to the continued progress of retail innovation in multichannel retail strategy. “We are optimising our operations using revolutionary technology. The end goal is to offer a better service to our final customers. It doesn’t sound like a big deal, but the detail behind it is substantial. The faster and the better we do this — both us and the retailers — the more we will be able to provide the adequate experience and products to the end customers via multiple channels, not just physical or just online.”   

Mathibela said her team are excited about proving that traditional retail is still alive and kicking. “Because SA still struggles with high data costs and people not wanting to share their personal details online, they are frequenting shopping centres. We’re going to expand our footprint and conduct research into other engaging features to put into these stores. Our biggest goal for 2021 is to become even more accessible by tapping into the smaller communities that other retailers don’t think about.” 

“The shopping centre industry in SA accounts for about 72% of all retail, which is about R780bn a year. It’s an important industry and employer. We have to keep growing and expanding the retail industry. It’s a big contributor to service delivery and to the provision of services and products in SA. All we need now is economic recovery and growth to improve so retailers can open more stores and consumers get what they want and need too,” said Majija.

Watch the Retail Evolution webinar below:

For more information, please visit www.fortressfund.co.za.

This article was paid for by Fortress Reit.

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