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Dec 2015 - Perspective - Doc # CEMA40821315

Perspective: Retail in South Africa

Authors: Mark Yates, Jan Prenosil
Abstract

This IDC Perspective features survey results and an in-depth discussion focused on the way retailers in South Africa approach IT. Despite the plethora of small, independent stores (many of which operate as part of the shadow economy), the retail environment in South Africa is fairly well developed. Large chain stores dominate key sub-sectors, infrastructure that supports retail is well developed, and procedures for technology deployment have been around for years. As a result, global ICT trends are rapidly becoming part of the retail environment, though they still have a way to go before they reach the levels seen in Western Europe and North America. This Perspective and its survey shed light on the priorities, IT solutions in place, and nature of IT budgets in South Africa.

  • Retail skies are starting to cloud. Cloud-based delivery models are used sparingly by South African retailers. For instance, of the 11 retail-specific solution areas asked about in this survey, less than one-third of the respondents indicated using a cloud-based model for any of them. For nine of these solution areas, one-fourth or less of the respondents say they used a cloud-based deployment model. Still, cloud is being used. More than one-half of the respondents say they use cloud in some capacity with regard to at least two areas: in-store mobile systems and mcommerce. Moreover, one-third or more say they use cloud in some capacity in 8 of these 11 areas. This suggests cloud-based tools are largely seen as a tool to supplement existing solutions.
  • Linesofbusiness (LOBs) lead IT development. Consistent with retail organizations in other parts of the world, lines of business in South African retailers have significant influence in IT planning and purchase decisions. Almost two-thirds (58%) of the survey respondents say they lead IT development and projects. Anecdotal and survey evidence from other regions suggests that this does not mean lines of business are independent of IT. More likely, retail LOBs that do lead project planning and implementation work closely with their IT teams to ensure that customer-facing and retail-specific applications are compatible or integrated with back-end management and accounting systems.
  • IT budgets are rising but not for innovation. More than one-half of the survey respondents say their IT budgets will rise year on year in 2016. Another 18% say budgets will remain the same. The amount allocated to innovation (and novel IT solutions) will drop from 45% to 37%.
Coverage
Subscriptions Covered

IDC Retail Insights: Central and Eastern Europe, Middle East and Africa Retail Digital Transformation Strategies

Companies Covered

A.T. Kearney Limited

Regions Covered

South Africa

Topics Covered

Analytic applications, Cloud collaboration suites, Customer relationship management applications, Enterprise mobility, IT operations and implementation, eCommerce

Vertical Markets

Consumer shopping, Retail, Retail global supply chain, Retail investments

Referencing Documents
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