Online retail grows in South Africa, retailers told to improve supply chain

Online retail grows in South Africa, retailers told to improve supply chain

Online retail in South Africa is becoming popular, and has been growing at an annual rate of 30%, according to a latest research conducted by World Wide Worx.

In the face of this unprecedented success, experts have urged the country’s retail businesses to adapt to these trends by optimising their supply chains, if they want to remain locally and globally competitive.

Fatima Sullivan of DHL Express said this week: “The rapid growth of smart phones, tablets and computer technologies is transforming the global, as well as local retail industry. Nowadays, many customers are choosing not to visit traditional brick-and-mortar stores and are increasingly shopping online during nontraditional time periods.”

A recent report by Forester Research confirms this trend, indicating that U.S. online retailers continue to grow at a rapid rate, surpassing the growth rate of traditional brick-and-mortar retailers.

“The report predicts that U.S. online retail sales will hit $262 billion in 2013, a 13% rise from $231 billion in 2012. In comparison, 2012 overall retail growth was just under 3%,” Sullivan said.

The days of the traditional retail model are well and truly over, she charged, adding that in the new, global retail economy, retailers are under growing pressure to optimise supply chain efficiency and provide seamless service and competitive pricing for customers via multiple channels.

Sullivan said this has come about as a result of a few key trends. “Most retailers operating in emerging economies, which are experiencing rapid growth, now need to service the burgeoning middle classes which posses more disposable income. This presents significant opportunities for retailers across all geographies and sub-sectors to interact with customers beyond their borders,” she said.

Having a multi-channel operation is now essential to these retailers’ business models and electronic channels continue to deliver strong growth, especially within the African region.

She pointed to latest research by Gartner which reveals that for example,  around half of the world’s leading retailers will be creating and executing real-time personalised offers to maximize sales opportunities by 2015.

“Compounding this is the different approach and supply chain requirements across different industries.”

She said to maximise profitability, retailers need quick, smart, cost-effective, responsible ways to get to their market, fulfilling orders rapidly and accurately across multiple sales channels.
“Effective reverse logistics is essential for managing returns and keeping the industry moving. The multi-channel market landscape requires collaboration and optimisation to deliver goods to all corners of the world.

“A supply chain needs to answer a number of challenges, which includes achieving cost efficiencies, extending a company’s global reach to source low-cost goods and gaining a competitive advantage. In addition, it must also fulfill multiple channels and ensure rapid, yet agile delivery of goods, especially since speed is of the essence.”

She made a plea to businesses to maximise a business’s bottom line. Retailers, she said, should aim to take a more holistic approach to managing supply chain risk and achieve greater visibility, flexibility, and control.

“Many retailers however lack the ability to build this supply chain. At this point it is appropriate to identify a strategic resource to optimise a business’s supply chain and help make it as resilient as possible by outsourcing to a well reputed external logistics expert.”

She also said that regardless of the size and nature of the business, logistics providers have the industry expertise and provide logistics services that best fulfill their needs.

“As consumers continue to change, so do retailers need to adapt their market proposition and supply chain to provide better product delivery, faster responsiveness and improved reliability.

“The consumer of today is asking for this, and across multiple channels. The days of the traditional retail model and traditional supply chain are over, and optimisation, innovation and organisation are now key to success.”

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