Shoprite Group recently launched its first cashless store in Durbanville, Cape Town. This move comes after the launch of another technologically advanced clothing store in Canal Walk earlier this year. The shift towards cashless stores aligns with global trends aimed at enhancing customer experience through digitisation.
The Future of Retail in South Africa
The question arises whether cashless stores are the future of retail in South Africa and whether consumers are ready to accept the idea of ditching cash for cards and other payment methods.
Shoprite’s Technological Advancements
Shoprite Group opened its first Uniq clothing store in Canal Walk on March 30, becoming the first clothing retailer in South Africa to offer self-service checkout. There are nine standalone Uniq stores across the country. The group also opened a new franchise brand called OK Urban in Durbanville, Cape Town, which is also a cashless store.
Benefits and Challenges of Digitisation
The digitisation of retail stores presents opportunities for retailers to improve customer experience and operational efficiency while averting cash-associated risks. However, numerous challenges hinder the progression towards fully digital in-store shopping environments, forcing retailers to balance innovative ideals with practical realities.
Cashless Society: A Risk-Reduction Perspective
Investment analyst Chris Gilmour suggests that both retailers and consumers would prefer a cashless society from a risk-reduction perspective. However, going cashier-less is a sensitive subject for trade unions as it could potentially lead to staff reductions.
Balancing Digital Future with Present Realities
In the South African context, tensions between an impending digital future and inhibitive present realities are exemplified by the differences in approach between mega-retailers Shoprite and Pick n Pay Holdings. While both have a strategic mix of digital offerings, Shoprite is leading the charge towards fully digitised storefronts, whereas Pick n Pay sees this move as potentially antagonising to the country’s large unbanked or underbanked consumer base.
Shoprite’s Dual-Market Strategy
Shoprite’s dual-market strategy highlights the impact that income inequality has on digital citizenship. Device affordability, internet access, and education influence market dynamics, conforming business strategy to the realities of operating in a country with the highest Gini coefficient in the world.
Catering to the Unbanked
While Shoprite’s perspective is more future-focused, Pick n Pay emphasises the importance of catering to the unbanked. Despite the substantial benefits of moving to a cashless society, transitioning to a cashless retail environment in South Africa faces barriers as many economically active customers remain unbanked.
“Our goal is to drive financial inclusion for all our customers, so going cashless would create financial exclusion for those who rely on cash to access goods and services. Instead of focusing on going cashless, we are introducing more ways for our customers to pay for their goods and services. This includes the likes of Mobicred and PayJustNow, or working with partners like Absa, Tyme, Capitec, RCS and others to offer more services for customers, that bring about payment innovation in our stores, for both cash and cashless transactions,” said Moodley.
Just last week, armed robbers entered a Pick n Pay in Kensington, Johannesburg, making off with customers’ belongings as well as an “undisclosed amount of money”. A similar incident took place at the Brits Pick n Pay in July. While nobody was killed in these incidents, this is not always the case during armed robberies. Curiously, Shoprite’s first cashier-less store, a concept called Checkers Rush, was launched in 2021, three years after the retailer suffered a record 489 armed robberies in a single year. Catering to current consumer needs, it seems, must be balanced with judicious risk management.
With less than a year in operation, it is as yet unclear just how significant Shoprite’s cashless and cashier-less innovations are on customer experience. Of more interest perhaps, may be the impact that cashless environments have on retail crime statistics. Again, it is only with time that real patterns can emerge. But insight from UK may reveal a glimpse of South Africa’s retail future.
“Most people in British supermarkets still use the normal cashier-operated tills. However, at Heathrow airport in London, all the shops are completely self-service apart from the boutiques. And then we have the Amazon Fresh and their lookalike stores. These stores have cameras everywhere and you swipe your card when you enter, fill the trolley or basket, and walk out. This really is the future and Shoprite is investigating its use in South Africa,” Gilmour said