South Africa's Retail Sector Is Likely To Increase Spending On ICT Despite The Country's Struggling Economy

South Africa's retail sector is said to be likely to increase spending on ICT (Information & Communications Technology) products and services despite the tough economic environment in the country.

This is according to new analysis by Frost & Sullivan titled "ICT Enterprise Spend in Retail, South Africa, Forecast to 2019".

According to the report, cloud-based services, managed services and mobile connectivity are expected to represent approximately $135 million (R1,8 billion) in retail ICT spend by 2019.

"The demand for lower-priced solutions within the retail sector presents IT and telecom service providers with an opportunity to differentiate their services portfolio by developing innovative usage- and value-based pricing models," said Naila Govan-Vassen, Digital Transformation Senior Industry Analyst at Frost & Sullivan.

The report further observes that the focus of ICT spend is South Africa's retail sector looks to be shifting from bigger capital expenditure to smaller operational models.

"Flexible service-level agreement (SLA) contracts, along with focus on the client's business and IT strategy, will be crucial for the service providers to increase competitiveness," added Govan-Vassen.

Some of the key growth opportunities for ICT vendors targeting the South African retails sector, as stated in the report, are:

  • Cloud-based services as a measure to increase work effectiveness;

  • Workforce mobile solutions to nurture efficiency across key working groups along the value chain and ensure real-time communication;

  • Retail analytics focussed on developing strategies and plans that aid in mitigating stock outage and stock layout challenges, while enabling track routing systems and store optimisations.

"Although retail enterprises seek to implement IT solutions that empower employees and decision makers, reduced budgets will force them to accomplish more objectives with limited technology," concluded Govan-Vassen.

It will be interesting to measure how South African retailers spend on ICT services and products leading upbto 2019 to see if they buck the trend of other industries in South Africa where spending on ICT is declining.

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