Retailers use social media to identify trends

With the explosion in communications technology through mobile devices, tablets and applications, ever more consumers are willing to share information with each other online, and also with their favourite retailers and brands, a survey by IBM showed recently. This means companies need to influence customers to also influence other potential clients, which to a large degree can only happen by harnessing digital media. 

"The speed of technology innovation, consumer adoption and access to information has created an environment where everything is known and the consumer is truly the one in power, coalescing around shopping communities of ‘we’," said Jill Puleri, global retail leader of IBM Global Business Services. Increasingly, savvy retailers are responding to this and using technology to make sure that interaction with customers is spot-on, based on individual preferences, location and lifestyle. 

• Woolworths and Pick n Pay actively engage with customers on Facebook and Twitter. 
• FNB’s social media strategy aims to build sustainable relationships with customers.
• "It’s quite innovative that banks and insurers follow their clients on social media. They are doing so to try and understand the trends, to see what customers are thinking and spending on, with the view to come back into their organisations and asking what products and services they need to adjust," Colin Daley, associate director for advisory services at Ernst & Young said. 
• Gerard Dumont, IBM SA retail sector lead, believes there is a big opportunity for retailers to engage within these technologies.  
• "Mature markets have fairly developed internet economies and online shopping capabilities, whereas in growth markets these areas are less established. 
• "The uptake of social media through devices by younger generations and the growing middle class in growth markets means that social media is leapfrogging this lag they have in the internet gap," Dumont said.

Source:

Business Day, dated 13 July 2012

Retail "needs BEE Charter"

The Government must introduce a broad-based Black economic empowerment (BEE) charter for retailers to ensure they were fully compliant with BEE codes of practice, empowerment experts said on 11 July 2012. Despite BEE programmes by retail giants such as Spar, Pick n Pay, Massmart, Woolworths, Cashbuild, Clicks and JD Group, there has been general criticism that the retail sector is not fully compliant with BEE standards. Ajay Lalu, the MD of Black Lite Consulting, said that the government had little or no leverage on broad-based BEE in the retail sector. He criticised the sector’s enterprise development programmes and employee share schemes, saying some of them were used to sugar-coat empowerment programmes as they did not fundamentally transform the supply chain.
§     Lalu said retail empowerment programmes, including enterprise development, were inadequate unless retailers were prepared to establish a transformed and sustainable supply chain with real benefits flowing to Black people. 
§     Lalu stressed that more attention should be given to the manufacturing and retail sectors.
§     Andile Thloaele, the CE of consultancy Inforcomm, said the reason retailers lagged behind with BEE programmes was because they were not incentivised. He also added that BEE guidelines were too diluted to get the sector to fully comply. 
§     Lalu said deals such as the Massmart and Walmart merger would not have been opposed by the government if Massmart had good empowerment programmes or better employee relations. “In my view the merger would have received support from (the) government had Massmart been more proactive on its empowerment programme,” Lalu said. 
§     The retail sector, unlike other industries, does not have a transformation charter with set targets to be achieved by particular dates. 
§     Instead of full partnerships with Black-owned businesses, retailers have put in place a number of enterprise development programmes and broad-based employee share ownership programmes.
§     Massmart spokesman Brian Leroni said the company had placed 18 million shares in the Thuthukani Employee Trust, and staff was awarded units in the trust at a price of R49.98.
§     The retailer said the Walmart transaction resulted in the payment of R439 million to staff shareholders when Walmart acquired 51% of Massmart’s share capital at a price of R148 a share.
§     The retailer had also established a youth development trust to assist unemployed youth to set up Hot Dog Cafés at Builders Warehouse stores.
§     Clicks allocated shares to 7,965 permanent staff members, with Black employees receiving 71% of the shares.
§     Through its enterprise programme, Woolworths said, it had appointed Stuart’s Joinery, a Black family-owned company, as its preferred shop-fitting supplier for the company’s African stores and it supported BEE suppliers.
§     Pick n Pay’s chairman Gareth Ackerman said its employee share trust held 3,4 million shares in the company.
§     “Procurement from Black-certified businesses remains a priority and targets have been set for all buyers in all categories to ensure that they have an element of black procurement within their respective portfolios.” The company had also established an enterprise development foundation and a franchise academy.

Source:

Business Report, dated 12 July 2012