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Exploring the Growth of Retail Consulting in South Africa
Quality retail consulting relies on three pillars of knowledge: retail, technology and a deep understanding of the business context in which solutions are designed, created and deployed. It’s why the best retail technology consultancies have a global presence. Ensuring retail expertise is complemented with detailed local knowledge plus the ability to draw on experience gained in other countries.
In this article, we explore retail consulting in South Africa by answering these questions:
- Why do retailers use technology consultancies?
- What do retail consultants do?
- What is a specialist retail consultant?
- How large is the consumer market of South Africa?
- How does retail consultancy differ in South Africa?
- Where is retail consultancy provided in South Africa?
Why Do Retailers Need Technology Consultants?
Retailers around the world are, quite naturally, focused on providing products to customers. With tight margins, many retail businesses run lean IT operations reducing the scope for research and development and limiting the opportunity to explore new tech.
Yet retailers must adapt to ever-changing customer demands and/or business strategy which often means adopting new technology or new business models and processes. This is where retailers turn to retail consultancies. The organisation wants:
- an understanding of what other businesses are doing
- how their processes compare to leading practice processes
- how new technology solutions can help them improve their business performance
- how selected technology solutions have been implemented before
- any pitfalls and ways of avoiding them through lessons learned
- certainty that the specific outcome and business value the retailer wants will be delivered
- help building a business case for investment in new technology based solutions
Work typically follows a number of stages beginning with a discovery phase to understand the retailer’s specific challenges and context. The retail consultant will then become immersed in the retailer’s environment. They’ll engage with different parts of the business, talk to the people on the ground and carry out store visits to see what’s happening at the coal face. This ensures the retail technology consultant understands what the challenges and opportunities are so they can recommend and shape the best solution or approach, which is then reviewed and agreed with key business and IT stakeholders.
The next phase is to define the solution in more detail, which usually requires mobilisation of the project team or squad. Whether an agile or waterfall approach is being used, a phased approach to delivery is usually adopted to get a minimum valuable product (MVP) implemented as early as possible. This ensures business benefits are realised as soon as possible and also tests the original hypothesis and informs future phases.
The MVP is usually piloted in a subset of the retailer’s business to test and improve the solution before it’s rolled out across the rest of the organisation. In a retail environment, this usually requires a focussed change management and training approach.
The retail consultant will be involved throughout the project as we explore in the next section.
What Do Retail Consultants Do?
Within every project phase, a business retail consultant plays an important role in helping clients adapt to change and utilise technology to gain a competitive advantage. They’ll bring a fresh perspective to the retailer’s business, engaging with the client to understand their needs. This includes:
- ensuring continuous communication and check-ins to align expectations, validate assumptions and design options/decisions
- defining, documenting and configuring new solutions and processes
- managing planned activities and driving to keep work on track
- gaining input from the relevant technical and business stakeholders to define and implement a solution that meets the retailer’s needs
Key skills for this role include communication, collaboration, influencing and personal interaction skills. And it’s also essential that a business retail consultant can listen, understand and facilitate decision-making processes to bring the technology consultancy’s experience to bare.
A top retail consultant will add value to a business immediately. They can hit the ground running because they understand the business, operating environment and the broader strategic challenges the retailer faces, as well as the tech and the jargon. In comparison, a generalist business consultant can struggle to understand the nuances of the industry, the pressures retailers are under and how their businesses work.
What Is a Specialist Retail Consultant?
Depending on the project, retail consultants will bring in relevant key skills like supply chain expertise or planning and forecasting experts. Specialist business retail consultants must understand the complete retail chain – plan, buy, move, sell – but they must also have deep knowledge and expertise in their area of speciality.
Leading retail consultancies offer specialist support across the retail value chain, offering solutions like customer experience, supply chain and enterprise systems. Another area of focus is workforce transformation (WFT). And this is particularly important in South Africa.
Retail Consulting in South Africa
WFT impacts every part of the value chain. Why is it so important in South Africa? Because retail is a labour intensive operation making human resources one of a retailers’ greatest costs.
However, rather than seeking to reduce labour costs to the bare minimum, South African retailers recognise they have a moral obligation to provide employment. Which means WFT focuses on getting the best from people and optimising shifts to align to peaks and troughs in customer demand and other operational needs.
Retailers the world over are seeking ways to run a more efficient ship. However, purely focusing on cost saving through reducing numbers is not right for South African retailers due to both moral obligations and the strength of labour unions. It’s this kind of insight that can only come from a local retail consultant with deep insight into the South African retail market.
How Environment Impacts Technology
With retailers’ costs increasing but consumer wages stagnating, South African grocery stores need to remain competitive without passing additional expense onto consumers.
One of the ways to do this is to leverage technology to drive efficiencies like reducing waste and optimising inventory. However, providing a standard solution to different brands within the grocery sector of the retail market won’t work. For a retail technology consultant to drive an effective solution, they must understand the segment of the consumer market that’s being targeted. As well as local constraints.
For example, when considering a customer sales channel strategy, it’s important to understand that mobile data is very expensive in South Africa which means low-income consumers cannot afford to browse whenever they want. Mobile solutions for a low-income focussed retailer need to centre on minimal to zero data requirements, whereas for a grocer targeting a more middle class consumer segment, a richer mobile solution may make more sense.
In South Africa, many retailer’s digital strategies have focussed on expanding their offering to bring in different revenue streams. Examples include value added services like free wifi so people visit the store to go online. Or enabling customers to pay utility bills, buy airtime and data and even take out loans at the store.
It’s not only food retailers who are turning to tech to solve their challenges. South African fashion brands also face competition from global entrants to the local market. In these sectors in particular, solid investment in technology like mobile POS and RFID has helped local fashion retailers compete with global competitors.
Where Do Retail Consultants Work In South Africa?
Cape Town is South Africa’s biggest retail hub with the largest supermarkets, fashion and pharma retailers. Outside the city, a business retail consultant goes where the work is, mainly in Johannesburg and Durban.
Local Presence, Growing Team
As the demand for retail consultancy grows in South Africa, so REPL’s presence is expanding. Having recruited a range of outstanding talent, REPL continues to invest in building the team and developing capability across the retail value chain. This will enable local support to be provided to South African retailers, with the addition of the global experience of the broader REPL Group.
With an office in Cape Town and one soon to open in Johannesburg, the REPL South Africa team is building a reputation for retail consultancy excellence. As part of the wider REPL global team, South African retail consultants work on a range of local and overseas retail technology projects.
Find out more in this article about workforce management in South Africa.