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

Retail Skills Shortage

The African continent is made up of 54 Countries, and despite the fact that 9 out of the top 10 of the worlds poorest countries are all in Africa, we are facing a dilemma regarding human capital, especially with regards to skills shortage and in particular within the retail sector.

Although Africa is the poorest continent in the world, it is also one of the few emerging markets still left. Due to this situation it is receiving more and more international attention from foreign investors. This coupled with the fact that many international retailers are also starting to reach saturation point in their native countries, they  are looking to Africa and in particular South Africa for growth opportunities.

• Currently Samsung is on track to meet $10bn target. According to CEO Park Kwang Kee. Samsung is targeting a 100% growth in West, East and Southern Africa. 
• China is now Africa's largest trading partner. Bilateral trade grew more than 43% to nearly $115bn in 2010. 
• Social media apps are being developed purely for the African consumer, and has already surpassed 60 million users.
• Africa is currently the fastest growing mobile phone market in the world, dominated by MTN.

Did you know, foreign investors already own in the region of:

 54%                       Woolworths

 60%                       Mr.Price

 70%                       Truworths

 90%                       Massmart

South Africa is already facing a serious shortage in retail skills, and situations where retailers like Shoprite, Mr Price and Truworths, who are planning new stores from Angola to Nigeria, to benefit from rising African wealth is just adding fuel to the fire.

According to a 2010 report by McKinsey, Africa’s swelling middle class may boost household spending by 63% to $1,4-trillion by 2020.

Truworths already have 21 stores throughout Africa, Shoprite, Africa’s largest super-market chain has 123 stores in 15 countries and are looking to spend R1,5bn over the next 3 years on expansion.

To give an example of just one of the many retailers, Shoprite opens more than 50 new shops annually, which creates  jobs and a demand for skills in the sector.

According to CEO Joel Dikgole of the Wholesale and Retail Sector of Education and Training Authority (W&RSETA) states that “More than 42000 store managers will be needed in the next five years to meet demand in the rapidly expanding industry.” - This is in South Africa alone.

For every store manager there are a host of other skilled retail positions required. The question is where are all these skilled individuals going to come from? The wholesale and retail sector already contributes in the region of 15% of our GDP and employees in excess of 25% of our economically active population.

If this situation is not addressed in the present, then we are undoubtedly going to have problems into the future.

The Master Retailing Team

To reflect and ... Act.

The difference between poor countries and the rich ones is not the age of the country. This can be shown by countries like India & Egypt, that are more than 2000 years old and are poor. On the other hand, Candada, Australia & New Zealand, that 150 years ago were inexpressive, today are developed countries and are rich.

The difference between poor & rich countries does not reside in the available natural resources. Japan has limited territory, 80% mountainous, inadequate for agriculture & cattle raising, but it is the ninth strongest economy in the world. Then there is the small country of Switzerland, which does not plant coco but has the best chocolate in  the world. In its little territory they raise animals and plant the soil during 4 months per year. Not enough, they produce dairy products of the best quality. It is a small country that transmits an image of security, order and labour, which has not only made it the world's strong safe, but is also ranked as the number 1 economy in the world.

Race or skin color are not important: Immigrants labeled lazy in their countries of origin are the productive power in rich European countries.

You may then ask, what sets the rich countries aside from the poor?

The difference is in the education of its people, framed along the years by the attitude and culture.

On analyzing the top 10 behaviors of the people in rich & developed countries, we find that the great majority follow the following principles in their lives:

1. Passion for ongoing learning & education;
2. Ethics, as a basic principal;
3. Integrity;
4. Responsibility;
5. Respect to the laws & rules;
6. Respect to the rights of other citizens;
7. Work loving;
8. Strive for saving & investment;
9. Will of super action; and
10. Punctuality.

In poor countries, only the minority follow these basic principles in their daily life.

We are not poor because we lack natural resources or because nature was cruel to us. We are poor because we lack education. We lack the will to comply with and teach these functional principles of rich & developed societies.

Let's concentrate on implementing these basic 10 principles and change the future of our great country.

The Master Retailing Team - Proudly South African.

Retail Vacancies

Please send your CV to CV@mretailing.co.za should you be interested in any of the below mentioned vacancies. Further details regarding the position will be discussed with applicable candidates including salary, location etc.

Master Retailing has various clients who are Blue Chip retailers all looking to employ the right caliber of individuals into the following available positions:

• 3 x Senior Credit Analyst
• 1 x Receptionist
• 1 x Planner
• 1 x Area Manager
• 2 x Admin Controller
• 7 x Admin Manager
• 2 x Admin Supervisor
• 6 x Branch Manager
• 7 x Sales Manager
• 15 x Trainee Manager

If you haven't heard form us within 14 days, please consider your application as unfortunately being unsuccessful. We will however retain your CV for any future positions you may be deemed suitable for. 

Kind Regards

The Master Retailing Team

Wholesale versus Retail

Far higher real wholesale sales growth than real retail sales in February may herald a switch from consumer-dependent SA economic growth to a more business-dependent growth.

Real wholesale trade sales at constant (2000) prices for February 2012 grew by 13.9% year on year (y/y) compared with an upwardly revised 10.8% (9.2%) y/y increase in January, after a 6.2% rise in 2011, Statistics SA data showed on Thursday, 19 April 2012.

This compared with a 7.2% y/y rise in real retail sales in February after a 6.1% gain in 2011. The I-Net Bridge consensus forecast for real retail sales February was 5.0% with forecasts among the ten economists ranging from 2.3% to 7.5%.

Seasonally adjusted real wholesale trade sales increased by 2.7% in February compared with January. This followed month on month (m/m) changes of 2.8% in January and 0.6% in December 2011. By contrast, seasonally adjusted retail trade sales fell 2.2% in February compared with January. This followed m/m changes of a 1.0% decline in January and after a 1.1% rise in December 2011.

Wholesale trade sales are not directly correlated with real retail sales, as for example, a major component of wholesale sales are fuel sales, which are captured in motor trade sales not retail sales, but over the time the two series tend to move in the same direction.

Measured in nominal terms (current prices), wholesale trade sales increased by 18.5% in the three months ended February compared with the three months ended February 2011.

The three major contributors to this increase were: dealers in solid, liquid and gaseous fuels and related products (36.0% and contributing 7.8 percentage points); dealers in machinery, equipment and supplies (17.3% and contributing 2.6 percentage points); and dealers in other household goods except precious stones (18.5% and contributing 1.8 percentage points).

Nominal retail sales grew by 12.2% y/y in February led by a 16.0% y/y surge in general dealers (supermarkets).

In 2011 real gross domestic product growth of 4.0% as measured from the expenditure side was supported by real household consumption expenditure growth of 5.0%, government consumption expenditure of 4.5%, and gross fixed capital formation of 4.4%.

This year household and government consumption is expected to slow, but the hope is that fixed investment will rise.

The 50% y/y surge in Value-Added Tax (VAT) refunds to R11.8 billion in February could point to a surge in capital expenditure as VAT vendors can claim a refund for their capital equipment purchases.

VAT charged for capital equipment is a separate entry in the VAT return, but at this stage the South African Revenue Service (SARS) does not disclose how much capital equipment VAT was claimed. What they do provide is a domestic VAT, an import VAT and then refunds.

Confirmation as to whether the February VAT refund surge is due to capital equipment purchases must therefore be looked for in other places. One such source is the national government monthly expenditure account and that shows that there was a 44.6% y/y jump in February in payments for capital assets.

On April 1 Finance Minister Pravin Gordhan said that although government spending was R4 billion below budget, this was due to under-spending on goods and services, rather than capital assets.

The government announced in November 2010 its New Growth Path (NGP) which has as its central focus a massive investment in infrastructure as a critical driver of jobs across the economy. The framework identified investments in five key areas namely: energy, transport, communication, water and housing. Sustaining high levels of public investment in these areas will create jobs in construction, operation and maintenance of infrastructure. The NGP expected the infrastructure programme to trigger a local supplier industry boom. That was essentially what happened in 2003 to 2007 when fixed investment grew at double-digit rates pushing GDP growth above 5%.

In the fourth quarter 2011, the private sector fixed investment seasonally adjusted annualised quarterly growth rate rose to 6.2% from 5.4% in the third quarter, that of public corporations to 9.6% from 9.0% and general government to 7.8% from 3.4%.

Source: Helmo Preuss of Bizcommunity

Toll Road Debacle

As Master Retailing are members of the Consumer Goods Council of South Africa (CGCSA), we often receive updates that may interest the Master Retailing followers. Herewith below the latest on the toll road fiasco:

Dear member,

On the 13^th of April 2012 the Department of Transport published the Gauteng e – toll tariffs in the Government Gazette (#35263), attached herewith. They have now introduced a new tarriff which is almost 6 times higher than the tagged user. To date, the upper limits were indicated at R0.58c per kilometre for non-tagged light vehicles and discounted rate of R0.30c for tagged users.

SANRAL have now introduced a new “alternate user” category of R1.74c per km.  This is a shocking new rate for those who do not register their vehicles on the SANRAL database.

This new category rate of R1.74c / km for the road user who chooses not to register their vehicle with SANRAL is seen as a tactic to force people to register. This is a new issue that may have to be urgently brought before the National Consumer Commissioner and will probably have implications for the engagement process that took place with the Commission last week between the DA and SANRAL. 

It is also important to note that the Gazette has made no mention of the tariff exemptions for minibus taxis and commuter busses.  In the absence of any details at this late stage, it must be assumed that they are in fact not exempt. The absence of clarity on the criteria for exemptions has further implications for both vulnerable groups (e.g. pensioners, mobility impaired).  In addition, the tourism industry which has numerous permitted vehicles and drivers similar to minibus taxi operators, have good reason to expect that they should also qualify for exemptions.   

This once again highlights SANRAL’s lack of transparency  which may further drive a wedge between the citizens of Gauteng and the authorities on the matter of e-tolls. We are continuing to urge members not to register as this matter is to still to go before the court on the 25 April.

CGCSA has engaged with SAVRALA who are one of the applicants challenging this matter, they are optimistic in the prospects of success in obtaining an interdict against e tolling coming into effect on the 30^th April 2012

We encourage all members not to be influenced by this latest move by SANRAL and to await the court outcome on the 26^th.

CGCSA will keep you posted should there be any developments.

Full details of application can be reviewed  on the website: www.outa.co.za

Happy motoring!

The Master Retailing Team