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Cape Town – The provision of credit in the retail space won’t change at Edcon, new CEO Bennie Brookes said at the Retail Congress Africa in Cape Town on Tuesday.
He responded to a question from a delegate regarding Edon’s future approach to providing credit to customers in the light of the impact it has made on the company’s results in the past.
Edcon, South Africa’s biggest clothing retailer with more than 1 500 stores across fashion chains including Edgars and Jet, posted 12 consecutive quarterly losses, Bloomberg reported in August.
Brookes, who took over as Edcon CEO from Jürgen Schreiber on July 30, said on Tuesday as the SA government continues to improve the credit laws, it will become "a lot harder, but a good retailer must work with providing credit while at the same time trying to grow cash sales”.
Brookes is the former CEO of Melbourne-based department store Myer Holdings and spent his first 24 years at Woolworths of Australia.
He said the use of debit cards has become more popular in some parts of the world due to problems with providing credit.
“One of the big challenges facing retailers in SA is the low consumer confidence due to various economic factors,” said Brookes.
“These days, consumers do their research well before they buy something. They know the price even before they walk into a store. In SA retail, one has to compete on more than price in order to stay in the game.”
He said Edcon is planning a consumer-led strategy, almost a kind of metamorphosis. It will focus on innovation as well as good communication within its team and to the outside.
For him there are various trends in the South African retail market. The first is the impact made by globalisation and the arrival of big international companies in the local market – including so-called fast fashion retailers.
Secondly, there is a continuous balance between value and price that needs to be achieved. The degree of customisation and personalisation consumers want is also increasing.
The digital “disruption” is another factor that will continue changing the retail space. As for the use of big data to optimise company success, Brookes said it is important not just to gather this kind of customer data, but to extract what is useful and then to do something about or with it.
A trend he said is very important is the quality of people in the retail industry. They must be able to deliver in the changing retail environment where uniqueness and newness give the edge.
“The way people consume is different, so the way you market to them must be different too. The retail environment must almost become a ‘theatre of fun’ for customers’ big day out,” he explained.
“Customers want to leave a store feeling that they are more educated – it is not just about selling them a product anymore. Value must be added.”
In the competitive retail market, innovation and speed to the market have become key, he said.
