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Rethinking Retail in an African Context

A month has passed since we took part in Retail Congress Africa, an event aimed at bringing together senior retail leaders and industry experts from across the continent, to share innovative ideas, best practices, risks and challenges in retail.

With some of the fastest growing economies in the world, the opportunities in Africa are immense, and whilst many locals will automatically think we should replicate more developed markets like in North America and Europe, Mark Collin, head of retail for Thoughtworks Europe, presented a fresh view on how we, as Africans, can in fact learn from the mistakes and constraints of the Western world and leapfrog generations of technology, to build more adaptive systems and consumer-centric experiences.  

In Mark’s presentation he explained how many of the large retailers in the developed world have evolved their processes and technologies over a long period of time, which means they are often hindered by big, complex ecosystems and outdated technology.

These systems are often hard to upgrade, hard to replace and costly to maintain. They were designed for efficiency and low cost operation versus responsiveness, flexibility and speed. They are also generally unsuitable for the modern day customers who have been pushed forward faster and faster with consumer technology, tablets, smartphones, and an ever growing society that values speed, convenience and customization.

Fundamentally retailers and consumers are moving at an entirely different pace and retailers are struggling to keep up. Some are not surviving.

In South Africa, where we are seeing a massive shift in the smartphone market and a growing middle class, surely this is an opportunity for us to do things differently. Why not jump straight to the new technologies that support new store formats; mobile point of sales systems versus fixed tills, mobile-to-mobile digital payments versus cash, single inventory models for online and offline versus multiples of systems for various channels.

It’s promising to see the recent explosion of online retailers in South Africa, such as Zando, Spree and Yuppiechef. Even better is the uptake from traditional in-store fashion retailers like Mr Price, who have seen online sales increase by 195% in results ending September 2014.  

As a global company working in every major continent, we are inspired by what we see in Africa and the opportunities it presents to change the game in retail. We want to invest in empowering and developing technologists here in Africa to support growth from within the continent, to embrace new technologies and software development skills. We want to increase the overall number of skilled talent including women in technology while supporting frugal innovation from within.

From local spaza shops and traditional supermarkets to speciality stores and online retailers, the market in Africa is big and diverse, presenting a wealth of opportunity to those who are up for the challenge.

Media Coverage: 
Rise of a New Age in Retail has Begun in Biz Community
SA's Digital Economy Most Developed in Africa in SABC News

Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.

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