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Technology increasingly empowers consumers

10 October 2011, 12:56 Letitia Watson

Cape Town - Your pot plant can chirp if it needs water, the couch declare your weight, online purchases become ever easier – and the online product offering keeps expanding.

The digital era is here and experts reckon that all South Africans will have a smart phone within the next three years. This means that the South African retail world will change significantly to meet the needs of consumers who expect service at their fingertips. Retail groups will be obliged to keep pace with global trends.

Kevin Meltzer, founder of the Consology agency, told the annual conference of the Consumer Goods Council of SA (CGCSA) that online transactions are the norm today, although they are taking longer to gain a foothold in developing markets.

Amazon was one of the first companies to show that online buying works, but South Africans showed initial reluctance because of shipping costs and customs duties.

The picture is now changing as consumer awareness grows and international shipping costs come down. For digital content products, these factors do not apply. In addition retailers like Amazon are adapting by expanding global distribution centres to reduce the costs of transportation.

Meltzer says one of the most important reasons for the popularity of online transactions in South Africa is that people no longer have to stand in queues – in a store or at the bank. “A dealer no longer differentiates himself by having an online presence – it's a necessity.”

Gary Novitzkas, chief executive of kalahari.com, reckons e-commerce is now at the point of breaking through into mainstream commerce with the use of cellphones. “E-commerce is regarded as mainstream when it contributes more than 1% to total retail sales, and in South Africa it already constitutes 0.4%.

The internet penetration rate is however 12% – with six million people having an internet connection – and that of mobile penetration 92%. This is very positive for e-commerce.”

The use of tablet computers and smart phones has created a new market of online consumers. “This technology makes it possible for a child to use an iPad even if he is still cannot tie his shoelaces,” said Meltzer.

The use of technology is no longer dependent on literacy and simple digital products are accessible to all income levels.

“Apple’s announcement that the iPhone 4 will now be sold for $99 (on contract) is indicative of how widely accessible the products are becoming. I reckon South Africans will all have smart phones within the next 36 months,” technology entrepreneur Stafford Masie said at the conference.

“Consumers are more empowered than ever before and retailers will have to adapt the way they handle customers accordingly. An upset customer can within minutes express his dissatisfaction with a service or product to thousands of people through Twitter or Facebook.”

According to Masie, retailers and suppliers of products needed to focus more strongly on social networks like Twitter and Facebook for marketing and service because the networks have massive impact.

“The use of Google as a search engine is on the decline – people are increasingly researching services or products on social networks.”

Online purchases are also made easier as credit cards are not essential – debit cards, gift cards and loyalty points can also be used.

Masie uses the following scenario to sketch a typical example of how technology can change the retail experience for both clients and retailers: imagine you are standing in the store with your bags of shopping.

A store employee uses a smart phone like a scanner across the bags. The products and amounts register immediately.

Then you swipe your credit card across the phone to pay. Suddenly your phone vibrates, sending a message that you can postpone the transaction, because in 10 minutes’ time the price of the pasta in your bag will be reduced on the store's shelf.

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