The landscape of JSE-listed food retailers is unrecognisable from a decade ago as their business models evolve as they focus on omnichannel strategies in a bid to provide customers with a seamless shopping experience using a multichannel approach.
Business Report looked at JSE-listed Woolworths, Shoprite, Pick n Pay and Spar to see how each retailer has approached its omnichannel model.
According to the global retail omnichannel commerce Platform Market report 2022-2026, several leading retailers are adopting a retail omnichannel strategy to tap the e-commerce opportunity and also drive traffic and sales in physical stores.
“The potential of an omnichannel strategy is also being realised by small and mid-sized retailers, who are investing in the platform to survive the intensely competitive conditions,” the report said.
Woolworths
In its integrated annual report for 2022, the group said it consisted of three omnichannel trading divisions, all targeting mid- to upper-income customers who appreciated quality, innovation, value and sustainability.
The group's businesses include Woolworths South Africa (WSA), comprising Fashion, Beauty, and Home (FBH) and Food businesses. The Country Road Group (CRG) is its Australian subsidiary. This month it announced it was selling its David Jones, Australian department store.
“Each company provides customers with compelling loyalty benefits and offers dedicated loyalty programmes, which are key to building customer engagement and loyalty and driving personalisation, customer acquisition, frequency, and spending. Financial services are offered for WSA customers through WFS,” it said.
Woolworths has a mobile app, with its delivery service Woolies Dash now integrated on to it. It also offers a Click and Collect service.
The Woolworths digital team have delivered new innovations to the market in the past few months, including virtual try-on for Beauty as well as virtual beauty consultations, WCellar which includes a standalone liquor store, online hub and NFC enabled shopping, AI-driven recommendations, Ratings & Reviews as well as the launch and scaling of Woolies Dash.
According to Woolworths, online orders are fulfilled from selected stores, a dedicated ‘dark store’ in South Africa, and from the Omnichannel Fulfilment Centre in Australia.
The group said it was increasingly re-prioritising its operational and capital spending towards digital and data transformation to drive omnichannel, customer-centric solutions and experiences.
“We will also upgrade our loyalty programmes and build a headless digital infrastructure...
“We will grow our online presence by doubling the number of our on-demand grocery fulfilment stores and integrating the app for the Dash offering into the main Woolworths app. This will serve to reduce costs, improve efficiencies, and enable a fully integrated omnichannel experience for our customers across shopping, loyalty and financial services,” it said.
Liz Hillock, the head of Online and Mobile at Woolworths, said, “Over the last three years we have invested more than R1bn in our digital capabilities in South Africa, providing new and innovative experiences that meet evolving customer needs and that differentiate us in the market. We’re now accelerating this investment to support the exponential growth of our digital channels. We’ve adapted the way we’re structured to ensure we can innovate at speed and scale.”
Woolworths also offers a range of financial services, such as providing loans to individuals as well as financing retail sales.
The Shoprite Group
The retailer’s core Supermarkets RSA segment, including the Shoprite, Usave, Checkers, Checkers Hyper, and LiquorShop brands said its proven operational strength and considerable infrastructure, represented by its supply chain and 2 989 physical store footprint, facilitates execution at scale.
“With this as our base, we continue to execute our strategy to increase customer reach loyalty by building our omnichannel ecosystem of value,” it said.
Shoprite said its expanded store penetration and brand portfolio caters to a wide range of customer needs and, together with its accelerated digital commerce platforms, form a strong foundation for more seamless omnichannel customer experiences.
“Our ongoing investment in digital and closer-to-home store formats ensure we win the race for space and reach,” it said.
Its digital business hub, ShopriteX combines data science, technology and innovation with its operational strength to provide increasingly enhanced customer experiences.
ShopriteX delivered two innnovations – Xtra Savings, South Africa’s fastest-growing rewards programme and Checkers Sixty60, the first on-demand 60-minute supermarket grocery delivery service in South Africa.
In its 2022 annual report, Shoprite said 2019 to 2020 was the digital transformation phase.
“We shifted from store expansion from 2003 to 2013 to precision retailing. As the importance of data became more pronounced, we invested in our digital transformation journey to ultimately deliver an omnichannel experience for our customers.
“We launched our Xtra Savings rewards programme in Checkers and pioneered the Sixty60 one-hour grocery delivery service. In addition, we targeted growth headroom in categories like liquor, more premium private labels, and an accelerated rollout of Checkers FreshX, further closing the opportunity gap in key segments,” the group said.
Shoprite’s chief of strategy and innovation, Neil Schreuder, said: “Using the scale of the group’s core supermarket business, we provide seamless engagement across physical and digital channels to millions of customers every day. The platform creates new business and growth opportunities. Constant product and service innovation aimed at making shopping and saving more effortless for consumers have resulted in record, multi-year market share gains”.
The group also uses its technology infrastructure and strategic partnerships with industry leaders to offer convenient financial products and services to its customers.
Shoprite’s Money Market services include money transfers, buying lotto tickets, paying municipal bills, topping up data, airtime or electricity, purchasing gift cards or saving stamps, buying bus tickets, taking out insurance, and even getting a credit report.
The Spar Group
The group said its omnichannel strategy was in line with its vision to enable retailers to be the first-choice brand in the communities that they serve.
“Through collaboration and partnerships, we will drive creative and innovative digital products and services, empowering our retailers to capitalise on new growth opportunities, existing, new channels and business models, and to be the champion of their customers and communities,” Spar said.
It said the vision required a flexible omnichannel ecosystem, tailored for an interdependent retail model, enabling retailers to offer relevant and personalised communication and a world-class customer experience.
Spar this year launched SPAR2U, in the first half of the reporting period. SPAR2U is Spar’s consumer facing on-demand shopping platform for groceries and liquor.
“Feedback from consumers using this channel has been extremely positive. Interest levels from Spar retailers to utilise the new platform remain high and this is expected to enhance Spar’s ability to assist retailers in driving improved consumer service and engagement going forward,” it said in its annual report.
“This ‘e-commerce as a service’ solution is uniquely tailor-made for the Spar interdependent retail model and takes most of the onerous effort out of our retailers’ hands, allowing them to focus on trading,” it said.
Pick n Pay
Pick n Pay, a retailer which serves middle to higher-income customers, said had a fully integrated omnichannel offer.
“The group’s online on-demand grocery offer (Pick n Pay asap! ) was relaunched as asap! in August 2021. Significant enhancements to the mobile app and the in-store picking interface have simplified the user experience, including navigation, ordering, and checkout, and have led to notable improvements in the reliability and speed of the service.
According to the group, it maintained product availability at over 95% since launch. Pick n Pay asap! is now available in 392 supermarkets and liquor stores.
“On-demand grocery retail is only one element of the group’s omnichannel proposition, which includes its traditional scheduled delivery service, a Click n Collect service, and an online clothing offer.
“Ekuseni includes strong plans to grow Pick n Pay’s omnichannel offer and online presence significantly, including through a commercial agreement with the Takealot Group to run a dedicated on-demand offer on the Mr D app from August 2022,” it said.
This year Pick n Pay also launched an online homeware store and a new Pick n Pay Home shop for a range of new products that will only be available online. It also launched its PnP Groceries on Mr D service, tapping into Mr D’s 2.5 million active customer base.
Pick n Pay also offers a range of financial services ranging from uKheshe, a micro-transaction platform that allows you to send and receive small payments or tips, using an app on your phone, to pet insurance, banking and funeral cover.
BUSINESS REPORT