By Kate Waddell, Head of Sales: Data & AI, Specialised Solutions, & Retail at Altron Digital Business

Technology is delivering both incremental and exponential gains for South Africa's retailers, changing customer experiences and industry norms. Behind every retail success of the past four years lies a forward-thinking digital strategy, the intelligent use of data, and a committed focus on improving customer value.

The most remarkable evolution has been in the grocery sector, which has undergone a seismic shift over the past four years – largely due to astute leadership capitalising on the significant potential of technology. The winners have revolutionised deliveries, loyalty programmes and operational efficiencies to take a commanding lead in market share. With that success has come job creation, happy shareholders, and industry renown.

Post-Covid, grocery delivery has been the most visible site of innovation. Successful delivery programmes have changed how people shop in a way that few would have predicted prior to 2020, and have become a legitimate cultural phenomenon in the process. By leveraging advanced logistics-management platforms, and by using their large store footprints as a network of micro-fulfilment centres, the leaders have been able to offer quick, convenient and affordable deliveries, profitably.

Loyalty programmes are another locus of innovation. These have long played a role in customer retention and engagement, but we’ve seen a shift in their focus; from date- or event-driven promotions to everyday value generation. This has driven a huge rise in membership numbers, reflected in the amount customers spend in-store.

Across the board, the largest, most enduring successes we’ve seen have resulted from a strategic, integrated approach to technology. A successful unified commerce strategy moves beyond the limitations of multi-channel or omni-channel approaches by integrating all touchpoints – online stores, physical locations, mobile apps, social media, and more – into a single, cohesive system.

This strategic approach varies by sector and business size. New entrants who decide early on to focus on highly scalable digital infrastructure are able to save costs, which gives them fuel to invest in other areas of the business, while more established players have set up dedicated business units comprising data-science, e-commerce and personalisation experts with the express purpose of delivering innovative, customer-centric solutions.

The key factor behind any successful digital solution is its ability to intelligently leverage data. Intelligent data leveraging has provided substantial gains, enhancing predictive power to inform smarter decisions and better customer value. Unified commerce relies on technology to integrate systems and provide real-time data, unlocking customer insights. Appropriate data sets enable companies to predict behaviour, purchasing affinity, and performance, informing growth strategies, competitive positioning, pricing, marketing, and inventory management.

Machine learning optimises stock replenishment, reducing waste, while AI-powered workforce-management solutions enhance safety and efficiency. Predictive analytics ensures in-demand product availability, optimising supply chains and enhancing customer satisfaction. The health retail sector offers a glimpse into the future of integrated data analysis. Overlaying public health and retail data allows stores to stock region-specific medication, treating health issues more effectively and increasing revenue per square meter. This inter-domain analysis has profound implications for the future retail landscape.

Beyond operational and process efficiencies, entirely new ways of shopping are emerging, with technologies like mobile scan-and-go and RFID enabling independent scanning and payment, reducing wait times and enhancing the customer experience. Smart checkout technologies are slowly being adopted in South Africa to streamline operations and improve customer satisfaction. Rather than reducing headcount, this reallocation of human staff allows for more direct customer engagement and frees employees from cumbersome administrative tasks.

These solutions empower businesses to understand and anticipate customer needs through data-driven insights, enabling tailored offerings and improved responsiveness. However, the increasing size and scope of available data brings ethical and governance challenges that must be addressed.

Compliance with regulations and industry requirements is a necessary starting point, but large organisations need a proactive, risk-informed approach to data safety and security. Retailers seeking operational and strategic value from customer data must consider how to keep that data secure. As AI solutions are rapidly adopted, mitigating external threats and internal risks will be crucial to protecting brands and revenues.

While AI has tremendous potential to redefine business operations and customer connections, its ability to analyse massive data sets, predict trends, and enable hyper-personalisation creates unprecedented opportunities. AI enhances decision-making by providing actionable insights, making it a game-changer for industries striving to be competitive in a fast-evolving market. However, AI must be managed responsibly to avoid security risks and alienating customers seeking human connection.

As the industry continues to evolve, balancing the adoption of cutting-edge technologies with responsible data management and maintaining the human touch will be crucial. While there is still progress to be made in fully harnessing AI's potential in a way that fosters trust and long-term value for both businesses and consumers, the retail industry's tech-enabled successes demonstrate the immense opportunities that lie ahead. By strategically embracing technological advancements while prioritising customer needs and ethical considerations, South African retailers can position themselves for sustained success in an increasingly digital future.