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Grocery retailing: Navigating the in-store digital divide

Issues impacting retailers, manufacturers under the spotlight at The Consumer Goods Forum Global Summit in Cape Town from 15 to 17 June

CAPE TOWN, 25 May 2016 – Grocery and other retailers in South Africa are still dramatically underestimating the impact that the onslaught of digital is having on the industry. The in-store expectations[MR(-J1]  of consumers are evolving faster than retailers are delivering on those expectations – a gap referred to as the ‘digital divide’ – and unless retailers step up to the plate and capitalise on evolving consumer behaviour, they will struggle to stay relevant in today’s marketplace, says Tim Bishop, director of Deloitte Digital Africa.

Digital disruption is one of the topics to be discussed at the 60th Global Summit of The Consumer Goods Forum to be held at the Cape Town International Conference Centre from 15 to 17 June. Pundits from Alibaba, Facebook, Socos, Reefruits and other companies will discuss new strategic concepts and actionable insights for operating fast-moving consumer goods (FMCG) businesses.

The Consumer Goods Forum Global Summit is the annual event for leaders in the consumer goods industry, and the forum where the global agenda for the industry is set and where solutions to the biggest challenges facing the industry are proposed. It provides a truly dynamic environment in which retailers, manufacturers and service providers can do business and network with their peers at C-suite level.

Bishop says the most important aspect of crossing the ‘digital divide’ is engagement with individual consumers. “South African retailers seem set on doing all the clever tech stuff as quickly as possible, such as creating special apps, but forget that the crucial factor is reshaping their relationship with their customers. We may be in the era of digital, but we have never left the age of human beings.”

He says the use of digital devices over the past few years has completely transformed the shopping journey of South African consumers, who are using smartphones, laptops, desktop computers, tablets and feature phones to assist their purchases. They are using these devices before entering the store (for research, comparison and information), in-store, as well as afterwards (sharing their purchase experiences with friends for validation, for example).

“While most countries are heading in the direction of increased digital adoption and usage, South Africa has not followed the traditional route of migrating from laptops to mobile – we have skipped some of the adoption stages experienced by developed markets and gone directly to mobile. And we’re not just talking smartphones – feature phones are also being used extensively in this process.”

Bishop says South African shoppers are increasingly using digital access to tailor the way that they shop, and are creating their own ‘path to purchase’. “Retailers have lost control of the conversation. Shoppers are more informed than ever, and the information they access most easily and trust the most is often no longer coming from retailers. This means retailers must think broadly about how product information is communicated to today’s consumers – the old methods of retail marketing are long gone.”

He adds that crossing the digital divide does not mean putting up an e-commerce version of the store on the company website. “Far more important is having the right information online – from extensive product information, peer reviews and prices, to the availability of products. And providing a full range of online tools consumers can embrace. Taking them from online to offline in the store must be a seamless, easy process.”

Bishop says as part of embracing the challenges and opportunities of digital disruption in the retail industry, retailers need to in turn, ‘disrupt’ shoppers and redefine their entire shopping experience. They need to take a step back and really understand who their shoppers are, using big data and digital enhancements to determine the shopping journeys of individual shoppers. Offers relevant to individual customers can then be proactively driven to them in a contextual way.

“We need to use predictive analytics to give our customers the tools and information they don’t yet know they want. Retailers need to see the micro-moments in the customer’s shopping journey where they can sprinkle the pixie dust.”

Scores of CEOs of both global and local FMCG companies will join The Consumer Goods Forum Global Summit – the first of its kind on the African continent – to debate issues such as sustainability, food safety and security, and global environmental practices. The co-chair of The Consumer Goods Forum and chairman of Pick n Pay Stores, Gareth Ackerman, will host the CEOs from among others Walmart, Sainsbury’s, Nestle, McCain and Pepsico, at the prestigious event. The Global Summit is expected to draw more than 800 delegates from over 365 companies in 40 countries.

Manufacturers, retailers and service providers within the consumer goods industry wishing to attend The Consumer Goods Forum Global Summit can register here.

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About The Consumer Goods Forum

The Consumer Goods Forum (“The CGF”) is a global, parity-based industry network that is driven by its members to encourage the global adoption of practices and standards that serves the consumer goods industry worldwide. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category and format. Its member companies have combined sales of EUR 2.5 trillion and directly employ nearly 10 million people, with a further 90 million related jobs estimated along the value chain. It is governed by its Board of Directors, which comprises 50 manufacturer and retailer CEOs.

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