By Heath Huxtable, Executive Head at Braintree by Vox
The demise of brick-and-mortar stores has long been talked about, and the idea seemed to gain momentum during the multiple lockdowns that pushed more South Africans toward online shopping. While the end of physical stores hasn’t yet arrived, changes in customer behaviour mean that retailers now must have an online sales presence. And, they need to work with a partner with extensive industry experience if they are to get this done right.
Beyond the drive to eCommerce, other factors that are driving these changes in business include mergers and acquisitions, restructuring, change of strategy due to new shareholders, etc, and there is a drive to simplify IT in order to gain efficiency, reduce costs as well as to develop eCommerce capabilities.
In response to the changes, numerous digital platforms have emerged, all with the aim of helping businesses develop eCommerce functionality. Up front, the most crucial aspect to be considered is whether these are able to integrate what happens in physical stores with what happens in the online store.
The majority of digital storefront products on offer keep these two functions separate, which results in a lack of coordination between the physical and online across several areas. This includes pricing and availability, product descriptors, specials and loyalty programmes to name but a few. This disparity can result in situations such as long wait times for delivery or even cases where someone might order online to pick up in-store, only to find that the product is not in stock.
Tight, seamless integration ensures that products listed are available and can be delivered or collected in time, helping improve the customer experience. As such, there is a growing demand from retail businesses for an end-to-end solution that helps their digitisation. They are looking for a solution that brings together their finances, procurement, warehouse management, pricing, stock management, point of sale and more.
In addition, given that the sector traditionally works on low margins and high volumes, there is a demand for solutions that have low deployment costs, low infrastructure costs, and low cost per transaction. These businesses often turn to best-of-breed solutions – such as combining Microsoft Dynamics 365 Business Central with LS Retail – that lower the total cost of ownership, but still provide these organisations with the enterprise level of functionality that they require.
This is especially the case with many modern retailers diversifying their offerings beyond traditional fast-moving consumer goods (FMCG) and fashion, and now including in-store butcheries and pharmacies, which come with unique challenges.
For example, the prices of produce from butcheries are not standardised but can vary depending on a variety of factors, the primary ones of which are quality and weight. Pharmacies, for their part, come with a host of regulations that need to be adhered to; this can revolve around patient management, prescription management, traceability and much more.
The challenges are further compounded for retailers that are looking to expand into the African continent. The costs of expansion, coupled with low margins mean that the business case simply cannot be made for a Tier 1 enterprise-grade solution to be deployed. Here, organisations such as Braintree, a Microsoft Dynamics Gold Partner powered by Vivica Holdings, can bring significant geographical and industry sector expertise to the table, having implemented seamless digital solutions for a variety of retail organisations in South Africa and beyond.
Not only has Braintree been able to deploy its retail solutions in several countries across the continent, but it has also done so without setting foot in any of these geographies, helping bring down deployment costs. The company also sits on the partner advisory council of LS Retail, meaning that it gets to provide input into the direction that the software takes, and ensure that it remains a solution of choice for African companies looking to grow in the butchery, FMCG, pharmacy, and retail business.
So what about physical stores? As we have seen, they are not going anywhere and still form a part of doing business. What is changing is how people are now using them, and physical stores are increasingly becoming an experiential event that serves to showcase what is possible. Stores will serve merely to ignite people’s interest – window shopping at its finest – before directing them online where the full catalogue of products will be available.
There are of course some areas where this won’t be the case: for example, shoppers prefer to physically try out makeup and other beauty products before purchasing, whereas there will be other items, such as clothing or shoes, which they are entirely comfortable with purchasing online. In the end, they still need to ensure accurate coordination between their physical shops and online storefronts, and bringing on board the skills of the right partner will be key.