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The Future Of Retail?

Amazon’s brick-and-mortar store is, well, interesting… Do its innovations point to the future of the physical retail environment?

Pini Yakuel

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Amazon Books is now open for business in the US city of Seattle. The floor is hardwood and the shelves and displays are weighed down by beautiful, physical books. It looks and smells like any ordinary bookstore.

But make no mistake. It’s anything but.

Amazon’s new store is the digital economy’s coming full circle – flipping the model to tie together online and offline in a whole new way.

Related: Should You Purchase An Existing Franchise?

It’s establishing land-based business on e-commerce prowess, and modelling the methodology of the next generation of retail.

The rise of an online superstore

From the get-go, Amazon never had the privilege of meeting clients on the sales floor, watching first-hand the effect of sales and promotions, rearranging displays according to changing tastes. But it had something so much better: It had data. Big data. Ridiculous amounts of data.

And by turning this data into smart, emotionally intelligent data, Amazon managed to give its customers so much added value that it changed forever the face of global commerce. Because Amazon did what every online business must do: It used customer data to really get to know its customers.

Today, Amazon is effectively the world’s largest e-commerce search engine and the starting point for more consumer searches than Google.

Related: How Risky Is That Franchise?

Amazon is able to achieve this exceptional feat by leveraging data to really understand the wants, needs and hesitations of individual shoppers.

It also harnesses the collective consciousness through personal recommendations, cross recommendations and inter-personal references. The overall shopping experience is informative, personal and empowering.

Bypassing the land-based phase has also enabled Amazon to offer competitive pricing. Without the expanses of store based operations — rising mall rents, distribution costs and personnel salaries — prices of books (and later on of other products too) were cut dramatically.

During the past decade, online competition and the rise of e-books were a major force behind the collapse of some of the world’s largest bookstore chains, including global player Borders and Angus & Robertson, previously Australia’s largest book retailer.

Leveraging online data for offline sales

In Amazon’s case, data and innovation have outdone the traditional benefits of the physical world: Immediacy, personal connection and physical contact. But Amazon knows that people still yearn for the shopping experience, the book right now, the bookseller’s recommendations, the thinking process that occurs in a book store — even more than they yearn for endless variety or for shopping in bed.

Perhaps it’s also no coincidence that this is the first year since the onslaught of digital readers that e-book sales fell dramatically in favour of physical books. A plot twist indeed.

The new Seattle outlet leans on Amazon’s big data algorithms and customer-centric ideology to display to consumers just what they’re looking for in the format they’ve learned to know and love.

In Amazon’s case, this means giving very broad context to books by curating them according to both editorial and popular parameters.

The store showcases books with an online rating of at least four stars, tailored to its Seattle audience according to their documented Amazon reading data. Every spotlighted book also comes with a quote from online readers’ reviews, a review count and a star rating.

A promo for the future of retail

Amazon has come a very long way from its days as an online bookseller.

Books now account for a tiny fraction of its overall sales, and the Seattle store is but a tiny fraction of that. But Amazon is signaling that the counterbalance between online and offline retail is changing in deeper and more meaningful ways than Black Friday deals — and all retailers should be paying attention.

Related: Franchise Or Start-Up?

Data-driven, digital businesses that are taking on the shape of the real thing, bringing with them a wealth of knowledge about their specific customers and taking the guesswork out of selling may just be the inevitable direction of retail.

 

Pini Yakuel, founder and CEO of Optimove, has over a decade of experience in analytics-driven customer marketing, business consulting and sales. His passion for understanding what drives customer behaviour led him to spearhead the development of Optimove. This market-leading customer retention automation software, empowering marketers to maximise their customers’ value, is used by 100-plus online businesses.

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Nando’s Adopts Technology; Focuses On Food & Funny

Without a secure failover, erratic fixed line connectivity can cause havoc, especially in the high-demand, fast-paced fast food sector.

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Without a secure failover, erratic fixed line connectivity can cause havoc, especially in the high-demand, fast-paced fast food sector. As the name suggests, the expectation is that both the food and service are delivered quickly, and at a standardised (high) level of quality. 

Modern customers require modern restaurants. As smart technology becomes the norm, diners expect reliable, high-speed networks and communications solutions, especially in the fast-food environment. These contemporary restaurants must, therefore, offer reliable POS systems and dependable back-office administrative support. In order to deliver on these requirements, a stable network is required.

“For Nando’s, downtime means an unreliable Point-of-Sale (POS), lost revenue and a frustrated customer base,” advises Sugan Ganasen, Cradlepoint Lead: Ingram Micro Southern Africa. The beloved fast-food franchise started in 1987, with the first restaurant opening in Rosettenville, Johannesburg.

“With a broad footprint of over 1 000 franchises across the globe, and 259 branches in South Africa alone, sending customers away because the POS isn’t working simply isn’t an option.”

Related: (Watch) Why Nando’s Is Clucking Its Way To The Top

According to Stephen Brookstein, Nando’s Head of Technology: South Africa and EMEA; “Nando’s is 30 years young, and facing the same challenges as all business in the local market. Stability is the key to offering customers a better experience, and this requires an integration of technology.”

In South Africa, the pace of work is at an all-time high. In the food and beverage industry, this means that downtime results in exponential losses, and reputational damage that may hinder relationships with a fickle consumer base. Whenever connectivity is interrupted, credit/cheque card payments cannot be accepted, and off-line card payments are particularly susceptible to fraud. With no secondary line for a failover connection, the required constant connection cannot be achieved.

“Customers expect to be able to make a card payment on a secure POS system, and our franchisees expect a constant connection. In a digital age, everything relies on internet access, and constant uptime must be achieved to deliver both productivity and profitability,” says John Sikiotis, Chief Strategy Officer and CFO: India, Middle East and Africa at Nando’s.

“As such, our business needs include full failover capability, centrally managed software, improved response to communication issues experienced at restaurant level, enhanced security and PCI compliance – all delivered in a scalable manner across the continent.”

After much market research and a comparison of the solutions available, Nando’s deployed Cradlepoint’s AER2100 and NetCloud Manager, supported by Infoprotect. This delivered reliable 99 percent uptime across all Nando’s restaurants in South Africa, guaranteeing that sales are never lost and customers are always satisfied.

“Nando’s selected a countrywide store advanced offering, which ensures that each store is fitted with a Cradlepoint AER2100,” confirms Ganasan. This solution is a new generation, cloud-managed 3G networking device that helps Nando’s to increase bandwidth and achieve four-nines reliability in a secure, flexible, and open-architecture platform. The AER2100 operates as the primary connection, with a cellular modem and dual sim capability.

Implemented by Infoprotect, offering managed IT solutions, data usage is centrally managed, monitored and controlled using the NetCloud Manager (Enterprise Cloud Manager). “This enables Nando’s to deploy and dynamically manage networks at geographically-distributed stores and branch locations, improving productivity, reducing costs and enhancing the intelligence of the network and business operations,” advises Brad Fraser, Infoprotect’s CEO.

Related: Show Me The Funny

This monitors ADSL data usage and adds valuable business resiliency. According to Sikiotis; “The NetCloud Manager allows Infoprotect to perform remote diagnostics, upgrade firmware, and configure devices remotely. This means our restaurants enjoy better return on investment with optimised data usage, real-time monitoring, load-balancing and proactive usage alerts.”

The result is a scalable solution offering effective uptime, a primary and secondary network ensuring a constant connection, uninterrupted card transactions, constant uptime, data usage management, PCI compliance and security, automated support, configuration and monitoring, and sophisticated scalability. 

“These solutions were impeccably implemented within tight timelines, and have created a future upgrade path, ensuring minimal disruptions. The benefits offered speak for themselves,” concludes Sikiotis. “The cost-efficiencies realised include less downtime, more satisfied customers and less data breeches. Customers are satisfied and no sales losses are experienced due to offline POS systems. With this in mind, a reliable network and constant uptime offer a real cost saving solution.”

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Key Insights From The 2017 FNB Franchising Leadership Summit

South Africa’s exponential franchises took centre stage at the 6th edition of the annual FNB Franchising Leadership Summit held recently at Indaba Hotel in Fourways, Johannesburg.

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South Africa’s exponential franchises took centre stage at the 6th edition of the annual FNB Franchising Leadership Summit held recently at Indaba Hotel in Fourways, Johannesburg.

Themed “exponential growth”, the Summit coincides with the world-wide commemoration of Global Entrepreneurship Week (GEW), which celebrates the remarkable contribution of entrepreneurs to the global economy. The 2017 Summit focused on unpacking four perspectives of exponential growth, namely: entrepreneurship, brand, employment and personal growth.

Related: To Buy Into A Franchise Or Purchase A Licence? 3 Factors To Consider

Mike Vacy-Lyle, CEO of FNB Business, says, “The franchising sector has some great examples of businesses demonstrating exponential growth like the success story of unique local brands such as RocoMamas. The franchising sector is remarkably resilient and should be celebrated, hence we felt it was important to use Global Entrepreneurship Week to highlight the contribution of this sector to our economy.”

“As a bank which values the role of entrepreneurs, we are delighted to have provided a platform to the people leading some of South Africa’s world-class franchises to relay their first-hand account of what it takes to build a successful business,” adds Vacy Lyle.

Among the key insights that were shared at the Summit was the need for businesses to deeply understand customer needs and to consistently differentiate themselves. Brian Altriche, Founder of RocoMamas shed light on building honest brands.

“People know when something is a fake; you can push it to them for a while but in the end they catch on. In today’s world, brands need to be built on the premise that I am offering what you expect to receive when you read my communication and this is the main thing with digital. The consumer is the one that drives the conversation and people do not complain for the sake of it. Therefore, brands that meet the consumer’s expectations are the ones that will continue to win.”

Related: 3 Factors To Focus On When Opening Your First Franchise

Gerry Thomas, Managing Director for Krispy Kreme South Africa is of the view that franchises grow exponentially because they have a key market differentiator as a driving force. Furthermore, Thomas believes that winning business formulas create a “need” as opposed to a “want”.

“Exponential franchises are constantly looking for new concepts and innovative ways to make things faster, easier and better. These businesses are not scared to take risks and break with old traditional ways of doing things. Businesses that are embracing this way of thinking will always be miles ahead. We are excited with the incredible success of this year’s Summit and are looking forward to continued involvement by FNB Business in helping to grow this important sector,” concludes Vacy-Lyle.

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The Rise Of Women In Franchising

Over the last ten years, the franchising industry has seen a trend of more women taking up opportunities in franchising and this is expected to further increase over the next five years.

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Morne Cronje

Over the last ten years, the franchising industry has seen a trend of more women taking up opportunities in franchising and this is expected to further increase over the next five years.

According to the international Franchise Association (IFA) there are more than 25% of women operating franchises in the world and that doesn’t include another 17% of the population where men and women operate franchises together as partners.

Morne Cronje, Head of Franchising at FNB Business says, “Women have the ability to use their time, energy and resources effectively to meet and achieve business goals. This trait, in my view, is the cornerstone for successful women in franchising.  In a country like South Africa, the growing involvement of women in franchising is vital, considering that women make up the majority of our population.”

Related: Women March Ahead In Franchising

Cronje shares four successful franchise industries that women are dominating in:

  • Education – More women are attracted to this space because they are not only looking for profits but a community and economic impact. 
  • Slimming salons – Women-led franchises in this space tend to specialise in weight loss products and services. Currently, there are good business opportunities in this component of the health sector as more people are becoming health conscious.
  • Accessory and arts – Designing and selling jewelry such as brooches, rings, necklaces, earrings, and bracelets. More women are starting to become thought leaders in this business, setting trends and staying ahead of popular accessories.
  • Beauty salons & Nail bars – This is one of the industries pioneered by women, with its main focus being hairdressing, make-up, cosmetic treatments, manicures, pedicures and nail enhancements. Interestingly men are also increasingly making use of these services.

Despite the limited awareness about the important role and great strides that women continue to make in franchising, it’s important for more women to consider exploring opportunities in this sector since it’s one of the most resilient.

Related: The 5 Secrets Of Business Success

The success rate of a franchise business is far better than a traditional start-up or small business. Consequently, franchising is one of the few industries in South Africa that are showing steady contribution to the economy and employment.

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