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Physical vs digital shopping

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In March 2017, Soumen Ghosh, a visiting US professor of operations and supply chain management, delivered one of the business world’s more earth-shattering lectures on disruptive technologies at GIBS in Johannesburg. 

As the retail industry reviews their way of operating, they are faced with many challenges. Image credit: Oracle Blogs

As the retail industry reviews their way of operating, they are faced with many challenges. Image credit: Oracle Blogs

He understood, back then, that young consumers will and had already been changing the way businesses package their goods and services. No longer would the consumer take home exactly what they had originally purchased. Businesses would have to offer customised goods and services based on individual needs and desires, which is changing the physical retail landscape and it’s all thanks to the small device we all carry around in our pockets: the smartphone.

Generation Z, in particular, is leading the charge. They make up 26% of the population and soon, they will all be working and determining how businesses should run.

In the same address at the Gordon Institute of Business Science, Ghosh said that in as little as five years’ time, most retailers as we know it will be moving their enterprises online, leading to the retail apocalypse. Most brick-and-mortar stores will be dedicated showrooms.

If we look at some of the numbers from major retailers around the globe, you might just think we are witnessing the demise of physical stores. Yes, the future of retail as we know it is no longer a case of ‘one-size-fits-all’.

Technological advancements have forced retailers to evolve, to draw in Gen Z consumers. We can see why one would think that Gen Z tech-savviness would lead to the end of brick-and-mortar stores. However, this has not happened, and these consumers now represent the future of retail – a future which is as much about the personal in-store experience as it is about the purchase itself; a holistic experience, driven and enhanced by technology, rather than replaced by it.

Statistics South Africa found in its retail report from August this year, that trade sales have increased year-on-year by 2.4% in the second quarter of 2019 and 1.1% compared to the first quarter. The main contributors to the increase were clothing, footwear, leather goods and general dealers. These are the very sectors that we expect to decline yet they are doing better than food, beverages and tobacco, which had experienced -0.1% growth – products that we expect to remain on a steady upward trajectory.

Online shopping may be able to inspire, gratify and offer convenience for consumers but it is clear, at least for now, that digital cannot replace the need to touch, feel and try products – as it boosts confidence in a purchase. Well, not yet at least. And even if it gains traction in the future, it would not be able to replace the experience of a physical environment – the memory and social delight of being somewhere.