South Africa

News24.com | Retail tech hopes to beat one key Covid-19 threat: The shopping queue

Retail – or at least some businesses within the sector – was one of the few industries able to remain operational through all five stages of government's risk-adjusted response to the coronavirus pandemic.

But, like other essential services allowed to continue operating, shops that remain open face a major challenge: curbing the spread of the virus at their premises.

e-Commerce and delivery services have wasted no time stepping in to fill the gap, with customers scrambling to book delivery slots at major supermarkets, and services like OneCart racing to expand their operations – OneCart, for example, said at the beginning of May that it had hired 450 new staff during lockdown.

But other innovations are also expected to gain traction. Amazon's Go model – which uses overhead cameras and computer vision to track shoppers through the store. The partially automated, cashierless model can trace when a shopper selects an item and puts it back, meaning a checkout station is not required. Using scanning technology, customers can pay for their groceries and leave a store without standing in a queue.

Innovations of this kind – which use artificial intelligence, algorithms, bar codes and weighting technology to identify items that customers have taken off the shelves to buy – have been around for years. But they are expected to gain traction as social distancing continues.

An AT Kearney "Retail Technology Survey" found that more than 70% of customers interviewed wanted technology that helped them spend less time in queues, and that this was the most desirable of all retail technology investments.

Blacklite Consulting is developing similar systems in South Africa, with its managing director, Ajay Lalu, saying the country is fertile ground for these innovations, as about 80% of current retail transactions happen through credit or debit card.

"It only works in Seattle and New York, because of the massive bandwidth. We said that could never work in Soweto, because we don't have the broadband internet access yet.

"Furthermore, the cost of deployment of these systems is prohibitive, not only in developing markets, but even in developed markets. We need to find a way of shopping that ends queues in Soweto, and can be replicated, globally," said Lalu.

'New systems need time and money'

He said Blacklite's "trust algorithm", which looks at user behaviour and shopping history, could quickly learn an individual's customer habits and probably wouldn't even ask you to re-scan items. He said there was great potential to develop personalised shopping specials for individuals with this tech.

"Our Retail Intelligence Solution Smart Kiosk will ensure that you pay for your goods via a digital payment platform in the mobile application, so don’t even touch a keypad. Once payment is authenticated, we will send you an electronic receipt via e-mail and to the application authorising you to leave the store," Lalu said.

He said Blacklite Consulting had finalised an agreement to pilot the model at a forecourt petrol station store. He said a major challenge in such tech taking off in South Africa was slow adaptation from retail and banks, because local appetite for these tech solutions was already strong.

When it came to retail outlets adapting to new trends, deputy chair of Sasfin Securities, David Shapiro, says retail has changed from grocery stores to hypermarkets, but has little more to speak of in the way of innovating and evolving, other than new e-commerce entrants.

"I wonder if that has had any impact on this. In the US, yes, a lot of companies have changed because of e-commerce. When you think of the way we live now, a lot of businesses there have had to adapt. But it’s more retail," he said.

Old Mutual Equities analyst Neelash Hansjee said, in the shift to supporting consumer-based tech, a few blockages remained, including trust, systems and infrastructure, and consumer adoption.

"New systems need time and money to ensure it works smoothly, and at scale for millions of consumers at any given time. Lastly, the tech needs to be widely adopted, to drive scale, ensure this is viable and ultimately maintain trust in the system," said Hansjee.

Hansjee agreed that Covid-19 was pushing digital, contactless service forward. She said Covid-19 had accelerated everything digital, and that the trend was likely to be the same in South Africa, as service delivery would have to be through digital channels, "without a human element for assistance to manage pain points".

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