How brands and stores benefit through the revolutionary bonsella® in-store rewards programme

How brands and stores benefit through the revolutionary bonsella® in-store rewards programme

 

Patrick Winter,Head of Strategic Partnerships at Retail Engage – innovator and custodian of the revolutionary bonsella® rewards programme

In April Shopping & Retail SA visited Retail Engage, the innovator and custodian of the revolutionary bonsella rewards programme for independent stores, and chatted to Patrick Winter, Head: Strategic Partnerships, to find out just what makes bonsella® tick.

 

S&R:. Why should independent stores be excited about bonsella?

PW: bonsella® is the first entity in South Africa who are strategic partners to the independent sector. We do this by giving our stores a free multi-million Rand loyalty programme to use, managing this programme with our team of experienced agents in each store, bringing additional brand spend to all of our stores (through airtime and other deals) and also by providing our stores with unique 3rd party services, such as in-store banking. This helps draw more feet, keep current shoppers happy, increases basket value and increase profit margins.

S&R: How many stores do you see bonsella rolling into going forward, and how many shoppers will this programme enrol?

PW: Our target has always been to reach 10m bonsella members in South Africa, which we are confident we will achieve through 500 stores, given that we sign-up over 20,000 members per store on average. Given that we are also expanding into the liquor, hardware and lifestyle sectors, this number of 10m could be closer to 15m at maturity.

S&R: At what pace will you be rolling out the bonsella programme to remaining stores across the country?

PW: After 4-years of testing the model and ensuring we have a platform that works for all of our stakeholders, we launched our growth campaign early 2018. This means that we are currently growing at around 15 stores a month. By December this year, we expect to be in around 125 stores, with just over 1m members, and expect to be at full maturity by July 2020.

S&R: Clearly the brands are benefiting significantly through the success and capability of the bonsella model – please elaborate.

PW: Brand have historically battled to spend marketing budget in the independent sector due to its fragmented nature, inability to target shoppers directly, and lack of reliable data to measure the effectiveness of this spend. bonsella has answered this in the following manners:

      • Provided brand with a platform to target shoppers directly (airtime, SMS, in-store campaign etc.)
      • Has access to all transactional, loyalty and consumer data across our stores
      • Provided brands with a single marketing partner in this sector
      • Provides brands with a unique platform to perform myriad other services such as stock reviews, brand activations and research
  • Most campaigns to date, have provided our clients with >50% ROI

S&R: Is technology, or lack of, a significant challenge in the roll-out programme? (i.e. till software, analytics, management systems and so on).

PW: Our roll-out of bonsella stores is based on strict criteria, looking at store size, technology and location. In South-Africa alone, there are estimated to be over 200,000 stores in the independent sector, of which a high % match the bonsella criteria. Our primary challenge is thus not the number of stores or related technology, but rather making sure we partner with right stores in each area of operations.

S&R: Still on the technology front, you have developed the app and in-store research platforms – do you have other technical developments in the pipeline? If so please elaborate.

PW: Absolutely, we have a number of exciting initiatives planned for Spaza owners, Traders and Stokvels and our retail shoppers. I cannot give in any more details on these, so you will need to watch this space!

S&R: Describe the geographic spread of independent stores throughout South Africa, and how Retail Engage will be engaging them.

PW: It is common knowledge that KZN is the dominant area when it comes to the independent retail sector in South Africa. This will form part of core growth, although we certainly plan to expand to all regions in the country alongside this. In terms of engagement, we have recognised that personal relationships and great customer service is critical to adding value to stores and ensuring you keep them as partners for life. This is proven through our current store universe, where have had the majority of our stores on-board for over 2-years now. This stems from a well structured regional team, and personal relationships with the key players in each of our stores.

S&R:: On the international front:describe your expansion programme model…. will you be focusing on African countries first? And what business models do you envisage – the same as bonsella or variations thereof?

PW: The bonsella model has been designed with scalability in-mind and growing a global brand. Put it this way, wherever airtime is valued as a commodity in-country, bonsella works! This is applicable in most developing countries around the world, although the initial expansion may be focused on Africa where we are fortunate enough to have a partnership with a leading entertainment provider. Through this partnership and market demands, we envisage growing into most major African territories from mid-2018 onwards.


S&R:: Will you be maintaining your focus on informal and independent stores throughout?

PW: Absolutely, this is a critical aspect of the bonsella model, and is the sector where there is the largest growth potential for both our brands and 3rd party service providers.

5 TIPS TO AVOID BEING A VICTIM OF CASH ROBBERY

5 TIPS TO AVOID BEING A VICTIM OF CASH ROBBERY

According to the latest industry research, South Africa has approximately 75 000 formal and informal retailers. These traders contribute significantly to our GDP, yet they sadly remain victims of the brutal cash crime reality that sees at least 57 armed retail robberies in our country every day.

Richard Phillips, joint CEO of Cash Connect

Richard Phillips, joint CEO of Cash Connect and an expert in cash management and logistics, shares five practical tips which retailers can apply to reduce their risk for a cash robbery.

  1. Challenge insider-participation

Research has shown that more than 90% of business robberies are executed with insider-participation, and that the multitude of hands involved in manual cash processes create additional risks such as theft and cash losses.

Cash Connect’s cash vault technology has proven to be the most effective deterrent to cash crime in South Africa’s retail market. “Over the past eleven years, the number of attacks in pursuit of cash against our clients have annually amounted to less than 2% of our base. 87% of those attacks were successfully defended”, says Phillips.

Phillips suggests retailers who have opted for this technology should use it to their advantage. “Blatantly emphasise to staff that it would be a waste of time to try and access the cash in the Cash Connect vault”, he advises.

  1. Stop old school cash processes

Retailers who continue to use manual cash handling processes are probably not aware of how much time they spend counting cash, or how much money they are losing, or how much risk they are creating for themselves. Thousands of retailers still prefer to count, re-count and reconcile their cash and then drive to the bank to deposit large sums of money, mainly because they think it is cheaper to do so. That is not true. Automating with a leading service provider like Cash Connect can save you money in the long run.

  1. Automate your cash management

There is no question that automated cash management improves business efficiency. It is fast, accurate and not subject to human error. It is difficult to imagine a safer solution that eliminates the manual cash handling process altogether, not to mention the risk of a robbery in store and /or en route to the bank.

Steven Heilbron, also joint CEO of Cash Connect, challenges any of these retailers to automate with one of Cash Connect’s robust cash vaults and the proof will be in the pudding. He says, “Besides saving money, retailers will also have a host of added benefits that will enhance their business efficiency and allow them to focus on their business.”

  1. Use a cash vault that really protects your cash

Retailers who accumulate large sums of cash on their business premises are the primary target for armed robberies. For them the smart move would be to invest in a secure cash vault that is built to minimum SABS Category 4 standards. These robust cash vaults are designed locally, and act as an effective deterrent to the brutal cash crime attacks in South Africa.

  1. Partner with experts for peace of mind

As the leader in automated cash management and payment solutions, Cash Connect processes over R60 billion a year on behalf of thousands of retailers, including blue-chip customers such as Spar, Shell, Engen, Pick ‘n Pay and OK.

With Cash Connect retailers can rest assured that their cash is guaranteed, from the moment it is deposited into the cash vault until it reflects in the retailer’s bank account.

The Global Cash Index report that was released in June 2017, indicates that cash remains the preferred payment method for the majority of transactions. Given that South Africa has close to R140 billion in circulation at any given time, it comes as no surprise that criminals remain tempted. The good news is that criminals don’t have to win the jackpot all the time.

Cash Connect enables a safe and secure trading environment and empowers retailers with services that create greater efficiency, improve cash flow and offer quick access to capital with which to grow.

Established in 2006 Cash Connect is one of the largest suppliers of cash to the banking system and boasts in excess of R60 billion a year that it manages on behalf of its diversified client base across the country. It is an approved service provider to blue-chip companies including the Spar Group, Shell, Engen, Pick ‘n Pay and OK.

The executive management team – led by joint CEOs Steven Heilbron and Richard Phillips – has an unrivalled pool of specialised cash logistics, security and banking experience. The board of directors is chaired by Ivan Epstein, former CEO of Softline and Sage International.

Cash Connect is a private company, with Old Mutual’s specialist fund, Futuregrowth Asset Management, as its largest institutional shareholder.

Cash Connect provides more than just robust cash vaults: it is the key to a successful retail store strives to make a unique contribution to South Africa’s growing entrepreneurial SMME community – Beyond Safe.

Resurgence of independent outlets in South Africa

Resurgence of independent outlets in South Africa

There is a rebirth of more profitable and sustainable independent outlets in South Africa, This is due not only to modern day independent store owners embracing new technologies such as modern till and management operations systems, but also to the major brands recognising the importance of these stores and the very significant volumes they supply to community and outlying regions.

The trend is that share of basket is increasing for these stores, as well as their turnover. Their potential to earn and spend is huge even though many are located in smaller towns,” says Sane Mdlalose, a specialist on FMCG brands in South Africa and Sub-Saharan Africa.

Historically in the late 1990’s and early 2000’s most of the growth in new stores was driven by the formal retailers in SA, which tended to result in at least ten small independent stores closing.

Wholesale combines with retail in the Hammarsdale PowerTrade store

However, with the change in ownership in this informal market including local South Africans, other African countries and Eastern (Chinese) entrants, this has resulted in a rebirth of more profitable and sustainable outlets in areas where outlets were performing poorly in the past,” she explains.

Brands should not worry about how many stores these retailers own, but realise they have the cash to spend – they can spend it with you or with your competitor. Brand marketers should define the Main Market by owner type: independent or group; by the consumer/shopper profile it services and the needs it meets with little or no consideration being given to location.”

She advises brands to understand these independent owners more deeply and establish a strategy to treat them differently. Because there are so few in comparison to the formal retailer sector, marketers can very easily put together the right sales structure to service them accordingly.

We are seeing two types of sub channels (customers) in this market: foreign and the younger South African business owner,” says Mdlalose. “Both these owners are more educated and astute. The way in which they run their businesses requires a person with more skills to engage with them. As locally run operations move from one generation to another, they are being taken over by younger more educated outlet owners who display better business acumen and have higher profit expectations than their parents.”

The Golden Sun store in Tongaat, KwaZulu-Natal, boasts 10 modern high-tech tills

Brand loyalty with the foreign-owned channel today is low as they have no historical sense of allegiance – if the numbers don’t stack up you are out. They therefore have huge power to drive what the community buys and can change purchasing decisions overnight.

According to Mdlalose, there has also been a steady increase in ‘new’ brands which foreigners have introduced through an import model: these brands offer them good volumes as well as profit margins. They have also reintroduced a variety of payment terms for consumers. As the payment terms and benefits are normally backed by a portfolio of products which give the outlet more profit, consumers are being exposed to a larger share of less common or new brands. This is resulting in a reduction of the share of wallet of SA’s ‘leading brands’.

Even if brands have significant market share they have to treat this market properly or they may very well have a huge problem in the future,” she believes.

While marketers think it will cost too much to have a focused strategy for this market, they must adapt their thinking.”

She provides some tips:

Introduce a sub channel for foreign outlets and younger SA owners. This will enable companies to develop the collage model in terms of frequency and capability of the sales team.

Arm reps with the skills and ability to make decisions quickly. Equip your reps and team that call on these areas with superior financial skills.

Use this opportunity as a platform to assess the readiness of sales staff to take on bigger clients or move into Key Account roles by moving more senior reps to service this area.

Brand activation and communicating with these traders is undermined to some extent by language barriers. Consideration needs to be given to develop effective communication and the potential need for the incorporation of other languages in trader communication platforms.

Identify this market by turnover not by number of outlets.

Supply chain professionals crucial to all retail – SAPICS

Supply chain professionals crucial to all retail – SAPICS

With businesses increasingly recognising the importance of the supply chain to the organisation, the demand for suitably qualified and skilled supply chain professionals is growing, according to Mungo Park, president of the Southern African Supply Chain Association SAPICS.

The supply chain is the one function in an organisation that touches all others and supply chain optimisation can drive bottom line improvement. To capitalise on opportunities, however, supply chain roles must be filled by people with the requisite knowledge, skills and qualifications,” he states.

Park notes that supply chain programmes teaching core skills were once scarce, and many supply chain roles were filled by individuals functionally trained in finance, engineering, pharmacy and various other roles. “Today, however, with the supply chain more widely regarded as a revenue driver, the need for supply chain education is increasing.” He contends that supply chain practitioners without the combination of recognised, credible education and sound practical experience will find themselves left behind as businesses recognise the value of the supply chain and the benefits that supply chain improvements can deliver across other business functions.

An international supply chain certification provides the individual with authenticity and status in the industry”

Craig King, logistics senior manager at Samsung Electronics South Africa, asserts that internationally recognised supply chain certifications are worth “every minute, cent and ounce of energy”, and add enormous value for both the individual and the organisation.

Craig King

An international supply chain certification provides the individual with authenticity and status in the industry, reflecting their professionalism, expertise and authority in this increasingly complex field. From an organisational perspective, this is a huge advantage because supply chain processes can be enhanced or implemented by an expert who knows and understands international best practice and world-class standards,” he stresses.

King states that as a senior manager for an industry leading global organisation, he favours applicants with international certifications when filling supply chain roles. “It tells me that the applicant has a goal and is serious about empowering him or herself by obtaining an internationally recognised certification. It also tells me that the applicant is knowledgeable and is an expert in the field of supply chain management, and that I will be employing the best.”

SAPICS is the South African custodian of a variety of internationally recognised certifications – the APICS CPIM (Certified in Production and Inventory Management), CSCP (Certified Supply Chain Professional) and CLTD (Certified in Logistics, Transportation and Distribution). These are offered by SAPICS in association with its American affiliate, APICS. A new suite of designations from the Demand Driven Institute in the USA are also highly sought after.

In terms of training and development for Samsung employees, King says that members of his team are currently working towards the CLTD certification, “to expand their supply chain management knowledge and elevate their thinking from an operation and tactical level to a strategic one”. Citing a supply chain certification success story from his own organisation, he reveals that a team member was recently promoted to supply chain manager for mobile after achieving the CSCP qualification.

The CPIM is considered the premier certification for internal supply chain business operations,

and more than 74 000 professionals have been certified worldwide”

Since its launch in South Africa as the first comprehensive education programme designed for operations and supply chain management professionals, the CSCP has become an increasingly sought-after qualification. More than 24 000 professionals in 100 countries have earned the CSCP designation. “This highly-regarded programme provides graduates with the skills necessary to understand and manage the integration and coordination of activities within today’s increasingly complex supply chains. Graduates know how to design and develop a supply chain strategy that aligns with corporate strategy. They understand how to manage supplier and customer relationships, and recognise how logistics, technology and data can enhance performance. In addition, they can achieve the seamless integration of all processes to meet customer needs, reduce costs and increase profits,” SAPICS president Park states.

The CPIM is considered the premier certification for internal supply chain business operations, and more than 74 000 professionals have been certified worldwide. The CLTD programme addresses the burgeoning need for standard benchmarks in the rapidly changing logistics, transportation and distribution industries, he says.

Park notes that the benefits of an international qualification include career advancement opportunities, increased marketability and earning potential. “A survey undertaken in the USA by APICS revealed that graduates who earned a CSCP designation could expect an average 12% salary increase.

Successful supply chain management has become essential to compete successfully in today’s competitive global marketplace, and those who are suitably qualified to design, drive and deliver supply chain improvements will be assured of career success and advancement.

With the SAPICS supply chain community growing exponentially on the African continent, there is increasing awareness of the various quality international education programmes which are available, and which are offered throughout Africa via a growing network of Authorised Education Providers or on a self-study basis. Remote assistance from qualified instructors is available more easily with reliable internet in many countries, making these international certifications even more accessible,” he concludes.

Established 40 years ago, the annual SAPICS Conference is the leading event in Africa for supply chain professionals. The 2018 SAPICS Conference takes place in Cape Town, from 10 to 13 June.

SAPICS is the leading provider of knowledge in supply chain management, production and operations in Southern Africa.

SAPICS builds operations management excellence in individuals and enterprises through superior education and training, internationally recognised certifications, comprehensive resources and a country-wide network of accomplished industry professionals. This network is ever expanding and now includes associates in other African countries. SAPICS is proud to represent APICS (the global end-to-end supply chain association) as its exclusive premier channel partner in Sub-Saharan Africa.

SA Florist helps township businesses flourish

SA Florist helps township businesses flourish

Using marketplace technology, SA Florist has launched a programme to on-board township florists through an ecosystem that has been established to assist entrepreneurs to launch sustainable businesses. It plans to attract, upskill and support at least 30 entrepreneurs over the next three years.

A four-month pilot project was launched in Soweto to empower independent florists that are owned by black-women and service the township area. From 16 applications, five were selected to participate in the programme.

Tshego Ratshidi, entrepreneur, independent florist and owner of Bleu Rose

SA Florist managing director Matt Surkont says this pilot project was aimed at mining these gems. “After detailed analysis of the existing 300 florists on our platform, we found an unacceptably small percentage were black owned.”

The programme uses a two-pronged approach, combining training and peer-to-peer mentorship. The aim is simple, to play a pivotal role in using our technology to transform black townships into economic prosperity by creating market access.

SA Florist has proved the case by brining township florists into the economy and onto our technology marketplace through this pilot programme. We intend to expand this programme and transform the industry as a whole,” he adds.

The entrepreneurs attended five half-day training sessions at Khonology’s Academy focusing on the SA Florist technology, financial management, lean business canvas model and flower arrangement. They were paired with an established florist mentor already on the SA Florist technology platform and spent time learning how to optimise their business operations.

Khonology marketing manager Africa Nkosi says the Academy empowers entrepreneurs by providing fundamental knowledge of the core financial products and core technologies.

The academy aims to provide a practical understanding of the day-to-day workings of specific markets, explain the application of the products within those markets and to explain the under-pinning technology to ensure the markets remain efficient,” he explains.

Owner of Mande Bloom in Soweto, Gertrude Mentoor, says this initiative is a great platform for florists to display their talent. “Receiving guidance through such a wonderful program, increases business opportunities and gives us the necessary exposure to become an established florist.”

Tshego Ratshidi, entrepreneur and owner of Bleu Rose, also aims to be a new age florist and use what she has learnt in the corporate industry to her advantage. “My personal goal is to grow in my craft and run by business like a well-oiled machine which will create sustainable jobs. To use every opportunity the business presents to connect with humanity through more community work than I am doing currently.”

“I think it is a great initiative and will definitely help a new florist by providing access to markets which is one of challenges faced by South African budding entrepreneurs,” she concludes.

SA Florist is a trusted and custom-built marketplace for consumers and corporate clients to order South Africa’s most beautiful fresh & silk flower bouquets, arrangements, as well as premium gift boxes and artisanal gifts.

Real-time Business Intelligence in Retail

Real-time Business Intelligence in Retail

See what you’re missing: mining your surveillance video for real-time business intelligence

By Roy Alves, Country Manager, Axis Communications

When retailers think of video surveillance, it is usually in the context of loss prevention and security. But there is a whole other arena where surveillance video provides enormous value: gathering real-time in-store intelligence to help you improve your margins.

Embedded analytics in network video cameras

With the embedded analytics in network video cameras, you can not only observe customer behaviour in-store, but garner real-time statistics to help you improve store layout, product and display placements, and even identify bottlenecks and dead areas on the shop floor. Unlike the hit-or-miss approach of customer surveys and mystery shoppers, network video offers you an accurate and unbiased report of the immediate situation and of changes over an extended period of time. You get a clear view of how customers move along the aisles, making it possible to optimize shop floor plans and merchandising strategies to drive your sales and profitability.

Sharing intelligence across channels

Because the surveillance video is streamed over the network, multiple departments can securely share views of store activity in real-time. Store managers can compare analytics between multiple stores for a range of activities – from customer traffic to sales statistics. You can even download and share select video with your supply chain to improve inventory levels, merchandise selection and stock turns.

Optimizing shop floor plans

A network-based video surveillance system makes it easy to identify a store’s hot spots, dead zones and bottlenecks. You can easily program the system to generate heat maps that portray customer traffic for selected time periods. These maps provide valuable input for improving store design to facilitate more inviting access to merchandise. You can also combine mapped traffic patterns with point-of-sale statistics to immediately evaluate the impact of any changes you make to the floor layout – customer flow, items sold and the average sales amount.

Heat maps enable retailers to identify store hot spots, dead areas and bottlenecks.

Improving end caps and displays

Another way to leverage video intelligence in your retail operation is in the area of product placement and display strategies. Store managers can record video of customer interactions with different displays and then review the heat maps to see how effective those displays are at attracting shoppers to purchase the featured merchandise. You can also use video surveillance to compare traffic flow and sales figures between stores with or without a particular end cap or display.

Evaluating advertising and signage

Similarly, you can test the effectiveness of promotional campaigns, in-store advertising and signage by studying the customer flow captured on surveillance video. With advanced video analytics you can even measure the dwell time customers spend in front of a sign or display. Intelligent video analytics applications provide a number of key performance statistics, including average viewing time, distribution of viewing time and number of shoppers viewing during a selected time period.

Placing video surveillance intelligence where it does the most good

Watching hours and hours of store video can be an extremely tedious and inaccurate way to mine valuable data. And yet customer traffic patterns can reveal a lot about your patrons. With strategic deployment of intelligent network cameras throughout the store, however, you can slash that viewing time by allowing the camera to automatically analyse the video data and glean the useful information for you. Intelligent video surveillance systems use complex mathematical algorithms to extract moving objects or other recognizable forms from the recorded video, while filtering out irrelevant images or movement. Intelligent decision-making rules govern the data search to determine if the activity recorded in the video should be flagged for further review.

There are numerous advantages to processing as much of the video as possible inside the network cameras. For instance, putting intelligence at the edge helps you:

  1. Minimize bandwidth usage – Network cameras can be programmed to only transmit video when they detect motion in a defined area of a scene. This dramatically reduces bandwidth consumption and the number of operators needed to review transmissions. For instance, network cameras can extract a headcount from a frame and send just the essential data with a few snapshots instead of consuming bandwidth with several hours of unfiltered video.

  1. Reduce server costs – In a centralized video surveillance architecture, servers typically process four to 16 video streams. When network cameras do the processing, servers can handle more that 100 video streams. For people counting applications, for example, the resulting data (rather than the video stream) can be sent directly into a database, further reducing the load on servers.

  1. Improve video surveillance analysis – When network cameras process raw video data before it is degraded by a compression format, the quality of analysis greatly increases. This configuration also reduces the number of servers required to process the transmission because fewer video packets are actually sent along the network for uncompressing or transcoding prior to processing.

  1. Lower operating costs – With fewer servers needed, power consumption and maintenance costs drop. This also removes the burden from environments without server rooms to build special facilities to support their video surveillance system.

  1. Lower equipment investment costs – Reducing network bandwidth usage by streaming only essential information (metadata and snapshots) gives retailers the option to deploy more moderately-priced network components that can easily support reduced data rates.

Combining video intelligence and POS

Because network video systems are generally built on open standards, they can be easily integrated with your other retail systems to provide a higher level of intelligent analysis. For example, by combining data from your point-of-sale registers with your video surveillance analytics you can determine a store’s conversion rate down to an item level. Trends in employee performance such as daily efficiencies can also be tracked, indicating the need for additional training or other factors impacting cashier effectiveness.

Impacting the bottom line

Retailers who continue thinking of video surveillance strictly as a loss prevention tool are missing a huge opportunity to leverage some truly powerful in-store intelligence. Network video systems provide an efficient and unbiased way to analyse customer behaviour and shopper traffic. The technology makes it possible to evaluate and compare merchandising and marketing initiatives at a single store or throughout a chain. With strategic application, network video gives your store managers the real-time insight they need to optimize store layout, product placement and advertising to enhance your shoppers’ experience, which will inevitably boost your bottom line.

[Sidebar]

What you can learn from video surveillance

Question: Is my shelf display attracting customers?

Answer: A single network camera focused on a shelf location can measure:

  • Number of people passing by the shelf

  • How long each person lingers at the shelf

  • The direction people are coming from when approaching the shelf

Question: Is my store layout inviting to shoppers?

Answer: Several high-mounted network cameras focused on movement across all aisles can detect:

  • Dead spots where customer traffic is too low

  • Hot spots where customer congestion occurs

How retailers can apply platform business thinking to magnetise customers

How retailers can apply platform business thinking to magnetise customers

Mpumi Nhlapo, Head: Demand Management at T-Systems South Africa

By Mpumi Nhlapo, Head: Demand Management at T-Systems South Africa

  • Platform thinking should be the foundation of local retailers’ digital journeys

  • With platforms, value flows in many directions (not the traditional one-way, linear model)

  • Platforms allow retailers to connect with their ecosystem in new ways, and facilitate greater flow of value between parties

Local retailers have an incredible opportunity to get a head-start on competition, by applying the science of digital platform thinking, to transform decades-old practices and deliver new value to customers.

Platform businesses – the likes of YouTube or AirBNB – facilitate the flow of value in a multitude of directions. This is in sharp contrast to the typical retail model: a linear, one-dimensional flow of value from the manufacturer, to wholesaler, distributor, and retailer and finally to consumer.

With platform thinking, this linear model is replaced by a three-dimensional approach to the ecosystem – where the retailer considers how it can harness the power of digital technologies to give customers, suppliers, partners and others the right tools to engage and exchange value.

The example of schools

In practice, what does this really mean?

Let’s look at a classic example of school wear, stationery and textbooks. For most parents, the beginning of the year is a mad scramble to assemble all the requirements that the schools ask of their learners.

With so many of these items ‘standardised’ for everyone, what’s stopping retailers from partnering with the major schools in the area, and preparing pre-bundled offerings that encompass everything the parent needs? This entire ‘basket’ could be queued up, paid for at the touch of a smartphone app, and readied for in-store delivery at the customer’s convenience.

Platform thinking asks what are the new stakeholders and role-players that can be ‘plugged into’ the retailers’ platform – such as a network of schools in this particular case.

Deepening of the digital journey – retailers need to think differently about how they interact with their ecosystem”

Connecting the dots

For this new approach to gain traction, a retailer may well need to start integrating what has traditionally been a fractured landscape of disparate systems: the likes of transactional engines, loyalty programmes, store credit systems, debtor management, stock management, Customer Relationship Management (CRM) and marketing tools.

By adopting a new breed of loose, decoupled middleware applications and micro-services, retailers can ‘glue together’ these systems to start exposing services to external third-parties in the ecosystem.

This also helps to build richer customer profiles, as the very heart of any good platform strategy must be the focus on getting to know customers better.

To this end, new beacon technologies, facial recognition, geolocation and other technologies can help to better identify and understand customers.

In fact, by better understanding shopping habits retailers experience an important value-flow back from the customer. They know what they need to change (such as new items to stock) and position themselves to provide hyper-personalised services to customers.

Deepening the digital journey

In South Africa, ‘bricks-and-mortar’ retailers are still very much the predominant force in the market. While many local retailers have made concerted eCommerce efforts to serve customers online, there hasn’t generally been great orchestration between their physical and digital presences.

Platform business thinking represents a deepening of this digital journey – where it isn’t simply about taking the old linear model of retailing and ‘porting’ it into a digital space. Instead, retailers need to think differently about how they interact with their ecosystem.

From a technology vantage point, this requires that they ultimately move away from the traditional approach of building high-cost monolithic systems, in favour of more flexible architectures and interfaces that can adapt to ever-changing business and customer needs.

In our example, this means that schools have an easy way of on-boarding themselves with the retailer and creating their line-up of required clothes, stationery and books. This would trigger automatic engagements between the retailer and the relevant wholesalers, to ensure that the necessary stock is ordered.

With this in place, the retailer can automatically provide such a ‘pre-packaged’ offering to parents – saving them hours of hassles and gaining a key advantage over competitors that don’t have such advanced integrations into the (circular) value chain.