In a recent interview, regional director at Crestron South Africa, Rupert Denoon, spoke with AV Integration about how integrated technologies can equip South Arica’s traditional retailers with the tools they need to remain competitive in the digital age.
A SHIFT IN FOCUS
The adage “safe as houses” has rung true for property management companies in South Africa for more than half a century, with profitable retailers reliably renting spaces in shopping centres for years, yielding strong profits and generating impressive growth in the sector.
However, as buying power shifts to younger generations, the playing fields are rapidly changing. Consumers who have grown up with the internet have more choice about how they purchase goods and services, which is placing traditional retailers under increasing pressure to compete for customers.
During a recent trip to Los Angeles, California, Denoon took the opportunity to explore one of the world’s trendiest shopping districts and compare it to his shopping experience back home.
“E-commerce has had an enormous impact on the retail sector in the US, and brick-and-mortar retail stores are putting up a solid fight,” he says. “One of the most striking trends is that shops are increasingly becoming experience centres, in contrast with the somewhat bland retail outlets that we see in South Africa. Shopping centres offer professional-level audio and lighting design, with interactive digital displays and video walls – and, in some cases, even live entertainment. Stores also offer opportunities to merge the physical experience with digital platforms, such as store-specific apps, to engage consumers on every imaginable level. The placement of merchandise is almost secondary to the experience on offer. However, once you are in the store and having a great time, it is easy to spend money.”
This trend is exemplary of what has been termed the experience economy, which the Harvard Business Review succinctly describes as a market where “a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event.” Creating memorable experiences for customers is enormously valuable, especially in the age of social media, where a well-timed post from a social media influencer can result in thousands of people becoming aware of your brand and rushing to your store for fear of missing out on the latest trend.
“The majority of South African retailers are somewhat behind the curve in this respect,” Denoon points out. “There are not many retail stores in South African that are creating the kind of experiences that would entice young people to ‘take a selfie and share’, and, as a result, customers may as well stay at home and purchase goods online.”
NANDO’S SETS A SPICY EXAMPLE
South African fast food franchise, Nando’s, recently deployed a country-wide upgrade across all of its branches, specifically aimed at taking advantage of the experience economy.
The driving goal behind the project, implemented by leading South African integration specialists Triac, was to enhance the dining experience by carefully managing the environment in all of its restaurants to create a consistent and impactful experience for dinners, while also enhancing efficiencies in service, power usage and human resources.
The integrators at Triac designed a bespoke solution for Nando’s to manage lighting control, audio distribution and other peripherals as the new brand standard. The system is an integrated solution that was seamlessly deployed across many locations countrywide. Triac was recognised for their creativity and unique application of Crestron technology in this project at the recent Crestron EMEA Integration Awards, held in Amsterdam during Integrated Systems Europe 2019.
“Nando’s has always identified itself as a forward-thinking brand that enjoys pushing the boundaries. It is, therefore, not surprising that they are one of the first retailers in South Africa to see the opportunities presented by the experience economy,” says Denoon. “By adopting the latest in Crestron’s enterprise control solutions across all of its outlets, Nando’s has succeeded in adding a whole new layer to its product offering. One can go so far as to say that Nando’s is no longer simply selling its uniquely flavoured chicken, but is also selling a unique and sought-after experience, which is quickly becoming synonymous with the brand.”
In today’s connected marketplace, customers can order food online from a vast array of vendors and have it delivered straight to their doors. However, if you want to be a part of the highly valued ‘Nando’s experience’ – where the lighting is always perfect, and the music is always on point – you have get off the couch and go out or risk missing out. Selling customers a memorable, unique and (in social media terms) shareable experience is the cornerstone of the experience economy, which leading economists predict will be the major driving force in consumer markets moving forward.
As noted by AVIXA, and several other authorities in the retail sector and audiovisual market, AV and integrated technologies are the bricks needed to build experience-based retail spaces that appeal to the modern consumer.
Denoon states that, in his experience, the majority of retailers in South Africa fail to pay sufficient attention to the technology in their stores, which seriously undermines customer experience – a risky prospect in today’s experience-based economy. “There is a general trend in South Africa for shops to spend a lot of money on shelving, mannequins and carpentry, with lighting, digital displays, and audio equipment often left as an afterthought.”
Some retailers in the country seem to be still working on the assumption that shoppers will continue to arrive in droves, even though the market is rapidly changing. Those that fail to adapt their business models are at risk of losing their share of the market, as consumers turn to online shopping to purchase groceries, clothing, appliances and electronics, among other goods and services. To remain competitive, physical retailers have to adapt, and investing in integrated audiovisual technology to create experiences that customers will perceive as valuable continues to prove one of the more successful global strategies.
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