The retail sector is undergoing a fundamental transformation that has little to do with the tired old debate about whether online shopping will kill the high street. Instead, what’s actually unfolding across South Africa and globally is the digitisation of physical retail spaces – a shift that’s redefining how stores operate and serve customers. Minesh Manga, enterprise and retail executive at NEC XON, who’s spent two decades at the intersection of retail innovation and technology, tells us this debate about online versus bricks-and-mortar is increasingly irrelevant.
“The narrative used to be online versus bricks and mortar,” Manga explains in conversation with SA Report. “But what we’re seeing now is that stores are becoming digitally connected environments that enhance the customer experience rather than compete with it.” This shift represents far more than cosmetic upgrades – it’s a structural reimagining of how retailers operate, fulfil orders, and engage with customers across both physical and digital channels.
The reality on the ground in South African retail tells a compelling story. When you walk into a modern store today, you’re entering what industry experts call a “connected store” – a space where digital infrastructure has been woven seamlessly into the physical shopping experience. This isn’t some distant future scenario; it’s happening now, from Johannesburg to Cape Town, as retailers race to stay competitive in an increasingly omnichannel marketplace.
The digitisation of retail is transforming how South African stores operate and serve customers
One of the most visible symbols of this transformation is the rise of electronic shelf labels (ESLs) – those digital price tags you’ll increasingly spot in modern retailers. What started as a simple automation tool for managing prices has evolved into something far more strategically important. These aren’t just about convenience; they’re becoming central to how retailers connect their products, inventory systems, and customer experiences.
“Electronic labels are no longer just about changing prices,” Manga points out. “They connect the product, the shelf and the customer in ways that allow retailers to deliver much richer information and services.” Modern ESL systems now incorporate near-field communication technology, allowing customers to tap a label with their smartphone to access detailed product information, special promotions, or loyalty programme rewards. It’s a simple interaction that fundamentally changes how shoppers engage with products.
The technology has become particularly crucial for retail logistics, especially as online ordering and rapid delivery services have exploded in popularity. Services like Checkers Sixty60 have shown South African consumers just how quickly groceries can arrive at their doors, yet this hasn’t spelled doom for physical stores. Instead, it’s forced retailers to rethink their entire operating model.
Manga explains that consumer behaviour has become remarkably sophisticated. “Convenience items like groceries are increasingly ordered online,” he says. “But when customers are buying appliances, clothing or electronics, they still want to go to a store, see the product, touch it, and talk to someone.” This hybrid shopping pattern is exactly what’s driving the transformation we’re witnessing across the retail landscape.
Global research backs this up impressively. According to McKinsey & Company, more than 70% of retail purchases still involve a physical store at some point in the customer journey, even when the initial search begins online. What this tells us is crucial: the store isn’t disappearing – it’s becoming a digitally enabled environment that complements online channels rather than competes with them.
The operational revolution happening inside stores is equally significant. Online fulfilment services require employees – known in the industry as “pickers” – to move quickly through stores locating products for delivery orders. This is where digital shelf labels and location guidance systems become game-changers. By helping pickers locate products faster and with greater accuracy, these technologies dramatically reduce the time required to fulfil orders.
“Speed and accuracy are everything in delivery fulfilment,” Manga emphasises. “If pickers can locate products faster and avoid mistakes, the entire operation becomes more efficient.” In some markets, retailers have taken this concept further by introducing “dark stores” – specialised warehouses designed exclusively for online order fulfilment rather than customer browsing. These facilities, already common in parts of Europe and increasingly appearing in South Africa, allow retailers to process orders at lightning speed while keeping traditional stores focused on what they do best: creating engaging customer experiences.
Research from Deloitte reveals that retailers investing in digitally enabled fulfilment systems can reduce order processing times by up to 40% – a critical advantage in the increasingly competitive rapid-delivery market that South African consumers have come to expect.
Despite the rise of e-commerce, many retailers remain firmly committed to physical expansion. New shopping centres continue to be built across South Africa, reflecting an enduring reality that often gets overlooked: stores still drive discovery, impulse purchases and cross-selling in ways that purely online platforms struggle to match. “When someone goes into a store to buy bread and milk, they often leave with half a trolley,” Manga observes. “That kind of spontaneous purchasing is far harder to replicate online.”
There’s also a profoundly social dimension to in-store shopping that digital channels simply cannot fully replace. Physical retail spaces provide human interaction, expert advice, and genuine community – experiences that remain deeply valued by many South Africans, from retirees to knowledge workers operating from home who crave the social experience of shopping.
Looking forward, the connected store is likely to evolve dramatically. Mobile self-scanning, digital loyalty integration, and real-time inventory visibility are all expected to become standard features of modern retail environments within the next few years. Customers may increasingly use their smartphones to scan products, receive personalised offers tailored to their preferences, and complete payments without ever visiting a traditional checkout. For retailers, the challenge will be integrating these innovations without losing the distinctly human elements that define truly great in-store experiences.
“The goal isn’t to replace the store,” Manga emphasises. “It’s to enhance it.” In essence, the future of retail is neither purely digital nor exclusively physical – it’s both, seamlessly connected through intelligent technology that serves the customer journey at every touchpoint.