Survey results and a significant event that took place in June put the spotlight on the outlook for the consumer goods manufacturing and retail industry – with both negative and positive outcomes. The latest EY/Bureau for Economic Research (BER) Retail Survey found a sharp deterioration in the business confidence levels of retailers during the 2016 second quarter. The Consumer Goods Forum (CGF) Global Summit which took place in June in Cape Town with a formidable list of international speakers showed that, whilst we may be heading for the end of retailing as we know it, a new phoenix is rising out of the ashes to catapult us into a new world order.
The dip in retailer confidence to a 15-year low in the 2016 second quarter, as reported by in the latest BER Retail Survey, follows retail sales data from Statistics South Africa that showed that the growth in retail sales volumes, which held up remarkably well during 2015 reaching an average annual volume growth of more than 4%, has taken a beating since the 2015Q4. The picture for 2016 is quite different, with the total retail sales volumes starting their downward fall from 3.8% y-o-y in the 2015Q4 to 3.5% in 2016Q1, with only 1.5% y-o-y recorded in April 2016 and again dropping further during 2016Q2. Durable goods (e.g. furniture, household appliances, hardware and electronic goods) in particular took a knock. Semi-durable goods retailers (e.g. clothing, footwear, toys and sporting equipment) also reported low sales growth and non-durable goods have also come under pressure from soaring food prices on the back of drought and dramatic depreciation in the rand exchange rate.
But out of adversity often comes opportunity and the outcomes of the Consumer Goods Forum (CGF) Global Summit, reported extensively in a series of articles on the www.bizcommunity.com site shows that innovation is advancing in leaps and bounds – be it in the digital world or in new technologies such as 3D printing and could spell the end of bricks and mortar retailing as we know it but could also be the start of an exciting new era in retailing.
Technology is bringing on a new world order and a new way to do business. From being able to access and communicate with consumers through the on-line capacities, to gathering information about what consumers want and need and analysing that data to ultimately store that in the convenience of the Cloud for future use.
To stay in the game, companies need to be pushing the envelope to make it easy to do business anywhere, anytime. In the fast changing retail scenario, it is the consumer that is setting the trends and companies need to be flexible enough to use all the new on-line technology to effectively communicate their offerings to consumers across multiple platforms and be able to act immediately to change direction according to results.