ICT Enterprise Spend in Retail, South Africa, Forecast to 2019

Emerging Trends such as Cashless Transactions, Big Data Strategy/Analytics, and Cyber Security are Expected to the Shape the Retail Sector by 2019

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This research is aimed at identifying the key areas of IT spend within the retail sector in South Africa to highlight the key areas of opportunities for IT service providers. It seeks to:
•     provide an overview of South Africa’s macroeconomic environment and its impact on the retail sector
•     offer insights into the retail sector‘s value chain and the adoption of ICT services across value-chain participants
•     identify the global and domestic challenges facing the retail sector
•     highlight the retail ICT spend in 2016 and offer future forecast insight
•     identify growth opportunities within the retail sector for IT and telecom service providers

The market for the service providers is very competitive, especially as they offer similar IT solutions and services to enterprises. Differentiation through innovative pricing models and industry knowledge will be a key factor. To remain competitive and differentiate themselves, service providers need to increase their industry expertise; build dedicated and industry-focussed teams that can cross-sell; offer innovative branding and price strategies such as pay-per-use models; change their approach from selling services to providing full ICT solutions (to have a stronger business focus); and enter into contracts with flexible SLAs.

The four predictions for the retail sector in South Africa are as follows:
1.     ICT spend within the retail sector, estimated at ZAR 5.75 billion in 2016, is expected to record a compound annual growth rate (CAGR) of 1.7% to reach ZAR 6.11 billion by 2019.
2.     Key services that will shape the IT strategy across retailers are cloud-based services as a measure to increase work effectiveness; workforce mobile solutions to increase efficiency across key working groups along the value chain and ensure real-time communication; and retail analytics focussed on developing strategies and plans that aid in mitigating stock outage and stock layout challenges whilst enabling track routing systems and store optimisations.
3.     Lack of flexibility on SLAs is one of the challenges that retailers have highlighted. There is a great disparity between sales and delivery. There is limited scope on the contract to accommodate technological changes. Retailers feel trapped by the contract as there is no scope to upscale/downscale according to the changing needs of the enterprise and the market.
4.     Service providers need to increase industry expertise; build dedicated industry-focussed teams that can cross-sell; offer innovative branding and price strategies; bring about a change in their approach from selling services to providing full ICT solutions; and offer flexible contracts.

Table of Contents

1. Executive Summary
Key Findings—ICT Spend in the Retail Sector
Key Findings—Strategic Imperatives for IT and Telecom Service Providers
2. Research Overview
Research Scope
Research Aim and Objectives
Market Definitions
Market Definitions—ICT Service Adoption Maturity per Industry
3. ICT Spend in the Retail Sector—Market Overview
Macroeconomic Environment
South Africa’s Retail Sector at a Glance
ICT Services—Adoption Maturity per Industry
Overview of the Retail Value Chain
4. Drivers and Restraints
Market Drivers
Assured Connectivity
ICT as a Retail Driver
Market Restraints
Business Integration
Lack of Flexibility on SLAs
ICT Spend in Retail—A Three-year Forecast
Service Providers—Competitive Landscape
5. Growth Opportunities and Companies to Action
Growth Opportunity 1—Cloud-based Services
Growth Opportunity 2—Cellular Connectivity
Growth Opportunity 3—Managed Services
Retail Sector—5 Major Growth Opportunities
Strategic Imperatives for IT and Telecom Service Providers
6. The Last Word
4 Big Predictions
Legal Disclaimer
7. The Frost & Sullivan Story

List of Figures & Charts

1. ICT Spend Analysis: Overview of the Retail Sector, South Africa, 2017
2. ICT Spend Analysis: Map of Key Sectors’ Digital Transformation Journey, South Africa, 2016
3. ICT Spend Analysis: Retail Sector’s Digital Transformation Journey, South Africa, 2016
4. ICT Spend Analysis: Retail Sector’s Value Chain, South Africa, 2017
5. ICT Spend Analysis: Key Drivers, South Africa, 2017–2019
6. ICT Spend Analysis: Key Restraints, South Africa, 2017–2019
7. ICT Spend Analysis: Competitive Landscape Analysis, South Africa, 2016

1. ICT Spend Analysis: Macroeconomic Environment, South Africa, 2017
2. ICT Spend Analysis: ICT Spend Forecast in Retail Sector, South Africa, 2016 and 2019




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