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Physical stores are not dead, but boring retail is - Google exec

Apr 05 2019 12:59
Carin Smith

Retail is not dead, and physical stores are not dead, but "boring retail" is dead, according to Linah Maigurira, Google's head of retail business in South Africa.

"Retail will never die. People love to shop. They need stuff. About 98% of retail in SA still happens in-store. Yet, digital activity can indicate how consumers intend to buy," she said at a recent consumer insights event hosted by Absa in Cape Town.

"The question for retailers is how to use data. Boring retail is dead.

"You cannot do it the way it has been done in the past. Mobile behaviour yields a lot of data. Each person going online has a digital profile. You have to move to data-driven marketing."

She said it is important for retailers to understand that, before the final transaction happens, the consumer has already done a great deal online.

"Consumers would have done research before they chose you. So, put your efforts into priming them before they choose to buy," she advised.

"Advertisers who are successful at data-driven marketing are seeing revenue increases of as much as 20% and cost savings of up to 30%."

Lack of trust

She said in Africa there is still a lack of trust in online purchase delivery.

"I don’t think innovation is lacking, but there is just a culture of going to a store that is still very strong," she said.

"Customers seem to prefer and trust going to a store with their credit card to pay but prefer to do all the research online beforehand."

In her view, SA is way ahead in mobile innovation, but retailers just need to be more "purposeful". Retailers can, for instance, look at how they approach data when dealing with customers.

"Shoppers' path to purchase has grown more complex. The way people consume media has changed. It is more on-demand and their attention is scarce," she explained.

"Consumers' expectations have also changed. Mobile is the fastest growing tech of all time. The mobile device is not something we can afford to ignore. It has transformed access to the internet."

'Mobile first' in SA

She pointed out that SA is a "mobile first" economy. Nearly 30 million people connect to the internet via smart phones in the country.

"There are more people in SA with an active smart phone than people with access to a running toilet," she said.

"So, retailers must look at what the entry point is of their customers. Searches on mobile are higher than on desktop and the gap continues to grow. The implication for retailers is that they must be available for customers 24/7."
 
Another trend spotted by Google is that South Africans are typically last-minute gift buyers, and Maigurira says retailers should try to take advantage of this.

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