Cape City-based entrepreneur Paul Simon wakes up at 3am each morning.
“One morning I’d get up, throw my fingers within the air and say, ‘Paul, you’re a genius. That is going to be unimaginable. You’re going to revolutionise retail in South Africa,’ ” Simon tells the Mail & Guardian. “And the subsequent morning I’d get up and put my fingers over my eyes and say, ‘Are you completely daft? What are you doing? We’re in the midst of a world pandemic.’ ”
Simon opened the retail idea retailer EGG on the finish of 2020, a 12 months that left main vogue retailers struggling to outlive. The launch marked Simon’s first re-entry into retail since founding and finally promoting the Younger Designers Emporium (YDE) to Truworths in 2004.
In South Africa, Covid-19 compelled huge vogue retailers to meet up with the worldwide shift to e-commerce. However with storefronts nonetheless taking part in a job in the way forward for vogue retail, specialists say innovating the normal “click on and mortar” technique is essential.
“I feel it’s crucial. When you don’t innovate, you won’t survive. Nowadays, you’ll be able to just about get something from behind your pc,” Simon says. “So why would a client come to a brick-and-mortar retailer? The reply to that’s, in a nutshell, innovation. Create one thing that you just can not get from behind a pc display.”
The case for bricks
EGG’s first retailer is in Cape City’s Cavendish Mall. Like YDE, it provides small native manufacturers a mainstream market to promote their merchandise with out coming into into onerous lease agreements.
“Our philosophy in direction of retail, and one of many causes we name it retail of the long run, is that I don’t consider tenants must be tied into lengthy leases nowadays … We’re on the lookout for rather more of a win-win situation. We’re giving [tenants] the identical entry to A-grade buying malls, however de-risking it.”
The technique is smart within the present interval, when retail companies are unsure about how lockdowns will have an effect on foot site visitors.
Truworths lately stated that though its South African shops didn’t need to endure additional onerous lockdowns, its UK shops had been compelled to shut in the course of the current efforts to curb the unfold of Covid-19.
In a word to shareholders final week, Truworths revealed that group retail gross sales for the 26 weeks ended 27 December 2020 decreased by eight.5% to R9.7-billion. It additionally estimated that its earnings per share would fall by between 14% and 19% relative to the prior interval.
The upper decline in earnings per share is attributable to an impairment of R162-million for retail retailer leases, as lockdown restrictions on nonessential retail within the UK and Europe proceed to strain store-based retailing.
This week, The Foschini Group (TFG) reported the same story: Its South African shops fared properly given the present buying and selling circumstances.
However its UK shops proceed to really feel the strain of government-enforced nationwide lockdowns, shedding 40% of its buying and selling hours in the course of the 9 months to December 2020.
Making clicks rely
Based on TFG’s buying and selling replace, on-line gross sales within the UK didn’t compensate for the misplaced gross sales from bodily shops.
Veteran retail analyst Syd Vianello advised the M&G that Covid-19 had accelerated the necessity for vogue retailers to have a web based presence.
“When you develop the technique actively and accurately, it could act as a buffer in opposition to any additional lockdowns.”
Vianello stated considerations about bodily shops’ future would accompany the shift to on-line retail. “Someplace down the road, the retailers have gotten to show spherical and say, ‘Whether or not there was Covid or not, we all know that on-line retailing began small and acquired larger and larger.’ Each sale that went on-line successfully meant that one much less sale was made within the store,” he stated.
Simon believes that mall-based retailers are right here to remain.
“One of many issues individuals stored telling me was that e-commerce had cannibalised the market, and brick-and-mortar retail is useless. And people are two very robust statements, with neither of which I agree.”
E-commerce and brick and mortar work optimally collectively, Simon says. “Name me old style, however I’m a agency believer in human nature. I don’t consider brick and mortar goes anyplace. I consider it must adapt, and it must pivot to be related in these instances.”
EGG is tackling the brick-and-mortar dilemma by integrating digital expertise into the bodily area.
The shop has an app that permits a buyer to both store and checkout on-line or to buy in-store after which choose up your gadgets at a click-and-collect counter. “You may actually simply stroll out with it,” Simon explains.
The shop additionally has beacon expertise, which connects to prospects’ cellular gadgets. The app will then assist prospects navigate the shop — giving them details about the varied manufacturers they’ll store.
Designer and model guide Shingai Nyagweta factors out that the imaginative and prescient of
extra digitally built-in buying areas is nearer to what international retailers are transferring in direction of. The Brazilian retailer C&A, for instance, has garments hangers that present what number of likes every garment has on social media.
“There may be wonderful innovation taking place. Particularly as a result of now brick-and-mortar shops need to be smarter about how they service their purchasers in particular person,” Nyagweta says.
“Their purchasers, who’re extremely digitally savvy, now anticipate to have the identical digital expertise in-store — the identical comfort, social distancing, and nonetheless with the ability to work together with the model.”
Nyagweta agrees that it’s tough to get South African shoppers to maneuver completely on-line due to its mall tradition.
“Purchasing is not only a necessity, it’s an occasion … As a lot as I’ve been making an attempt to punt on-line buying — it’s handy, it’s secure — persons are like: ‘Ja, however I wish to store and really feel.’ ”
However she concedes that in 2020 the South African vogue retail trade did “10 years of catching up within the area of a 12 months”.