Business 168: Brick-and-mortar retail in the doldrums as shift to online accelerates

Woolworths group CEO Roy Bagattini offered shareholders and customers a frank mea culpa about the retailer’s online shopping offering that flopped during South Africa’s hard Covid-19 lockdown.

A Woolworths internal survey found that 14% of its customers in South Africa started shopping online for the first time during lockdown. But the company’s online shopping – mostly for food – was a nightmare for customers who avoided frequenting the retailer’s brick-and-mortar stores during the first wave of Covid-19 infections. They had to wait days for online orders to be delivered. The unlucky ones waited weeks for new delivery slots to open.

The biggest challenge for local retailers in getting online shopping right is investing in and growing their distribution network, which enables them to deliver to consumers, even in far-flung areas. To reduce pressures on its limited delivery capacity Woolworths launched an option for customers to order goods online and collect them at its 60 stores nationwide.

According to Shoprite CEO Pieter Engelbrecht, Sixty60 is the number-two shopping app in South Africa after Takealot. The app was popular during different levels of lockdown“Three years ago I was talking about the race for [physical retail] space [among retailers]. We are now talking about the race for reach these days, especially in the digital space. This is becoming more prevalent during Covid-19 – that is to capture the customer digitally.

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