THE BLOG
10/29/2014 03:20 pm ET Updated Dec 06, 2017

On the Wild Side: South African Retail

There's a word for South African (SA) retail: wild (which can be both positive and negative, as I'll reveal later in this article). It's unlike anything we see in mature Western markets like the US, UK, and Australia, which seem relatively staid and tame by comparison. On a recent trip to the southern tip of the African continent, I learned that SA retail marches to the beat of its own drum with a sense of energy, an edge, and a remarkable diversity.

The sweep of retail starts with the "spaza shops", which are convenience stores at the heart of the community in SA townships. Often set up in private houses, I discovered that "spaza" was originally a slang term for "camouflaged". So these are literally "secret stores", designed to be visible to locals but to fly just slightly below the radar of the authorities.

2014-10-27-StallatParkStationJohannesburg.jpg
There are many other forms of "unorganized" retail in SA. Enterprising merchants pop up at traffic lights cheerily trying to flog drivers impulse buys such as toy helicopters. Around major transport hubs such as the central Park Station in Johannesburg, stallholders hover with fake Levis, baseball caps and Converse shoes. They're all just trying to make a buck in a country with 25% official unemployment.

2014-10-27-ExittoSuperJumboCashandCarryJohannesburgwithpicofNelsonMandela.JPG

Sellers often purchase their goods from cash and carry warehouse stores such as Super Jumbo, where the range of product runs from fireworks to fruit-infused shampoos. At one of these stores, I saw a massive banner near the cash register with an image of Nelson Mandela and the line: "TATA you will always be remembered".

2014-10-27-WaterShedmarketguitars.jpg

There's also refined retail in SA. I found two of the most creative and stylishly executed craft markets I've seen anywhere - the Old Biscuit Mill and the Water Shed, both in Cape Town. Most ingenious product sold at the Water Shed? Used teabags "repurposed with hope". Most quirky? Electric guitars fashioned out of old oil-cans (which actually had an incredible tone). Most desirable? Fashion bags stitched in townships out of scraps of cloth. (SA has a heritage of refashioning discarded items and brands into something useful, or just beautiful.)

2014-10-27-iKhokhapaymentsystematOldBiscuitMillmarkets.jpg

Around the Old Biscuit Mill markets, I witnessed leading edge technology in use. A stallholder completed a credit card transaction with an "iKhokha" dongle plugged into his mobile phone. ("Khokha" is Zulu for "pay".) Nearby, a glamorous furniture store armed its patrons with iPads which, when you scanned the price tickets, gave you information on each product. South Africans - like much of Africa - are tech savvy and mobile-enabled. At Park Station, I saw a billboard for the "M-Pesa" platform, which allows people to transfer money easily via their phones, in a way that you still can't in the US.

2014-10-27-PickNPaySupermarketJohannesburgGoodFoodStudioChocolateRoom.jpg

SA also has its fair share of world-class "regular retail" too. Above the Pick 'n Pay* on Nicol supermarket in Johannesburg sits a huge and gleaming "Good Food Studio", where customers and corporates alike can learn about the finer aspects of wine and food, or sample sweet treats in the "Chocolate Room".

2014-10-27-WoolworthsFoodSupermarketWaterstonesEntrance.JPG

At the Waterstone Village Centre in Cape Town is a Woolworths store, which was voted "Best Supermarket in the World 2014" (according to The Association of Retail Environments Awards). I was taken there by author and retail commentator Martin Butler, and we both observed that the store checked many of the boxes for supermarket retail today - in terms of display, brand language, sustainability and services.

2014-10-27-CapeTimesfrontpageMallrobberyturnsdeadly.jpg

Less than 24 hours after I was there however, a security guard was shot dead in the same shopping center.

And that's the truly wild side of SA retail (and society there generally). The disparity between the haves and have-nots is so great that it can result in theft and violence. Mall car parks have security entrances, and you pay a small amount to have your vehicle watched. Returning home with your purchases, you are likely to bunker down behind razor wire and security systems. (Many locals will tell you that it's not that bad, but to me at least SA felt more dangerous than the US, which in turn seems less safe than my home country, Australia.)

It hasn't stopped the entry of the big international players such as Zara and Topshop though. SA retail is globalizing along with the rest of the world.

The mix of first world and third world environments makes SA one of the most interesting markets I have ever visited for retail. Yes, there's a tension between opposing ends of the retail spectrum, but it's never, ever dull. Perhaps that's why sales are rising at 8.8% p.a. As the best retailers know, you can't bore people into buying.

*Pick 'n Pay is a client of Y&R Advertising, the parent company of Labstore, which Jon Bird heads up.