Grocery wholesaler Spar says retailers are faced with a host of hi-tech challenges tied to high costs and innovation complexities as SA’s hardware industry embraces digital transformation and smart technology.
While many opportunities exist in the growing demand for energy-efficient solutions and smart home devices, the group has warned that the road to modernisation is fraught with financial and operational risks.
High investment costs in automation and Artificial Intelligence (AI) pose a threat to financial resources and return on investment when not managed effectively, Spar said in its annual report.
The need to continuously adapt to emerging technologies also complicates the transition, presenting integration challenges that could disrupt operations and profitability, it said.
“Investments in automation and emerging technologies like artificial AI are important for operational efficiency and value creation. Embracing new technologies can address operational challenges and enhance service offerings.”
Despite these challenges, the shift towards smarter, more sustainable solutions is reshaping the industry.
Spar said consumers are increasingly seeking eco-friendly materials such as solar-powered systems and recycled products, alongside digital tools that enhance convenience, including online ordering and virtual consultations.
It said these trends offer retailers opportunities to expand their product lines, drive operational efficiencies and improve customer engagement.
“SA’s hardware retail sector is undergoing a dynamic transformation, driven by rapid advancements in smart home technology, sustainable materials and digitalisation.
“As consumer preferences shift towards eco-friendly and tech-savvy solutions, the industry is evolving to meet these demands with innovative products and experiences,” said Spar.
However, the retailer has warned that the benefits of innovation may not be equally distributed.
Economic pressures could limit some homeowners’ ability to invest in hi-tech and sustainable solutions, while others may struggle with accessibility due to a lack of technological literacy, it said.
This could also widen the gap between tech-savvy consumers and those less inclined to adopt these advancements.
“The shift to digitalisation requires significant investments in technology and training, which may present financial and operational challenges for some retailers,” said Spar.
“We remain committed to supporting retailers through advisory services and technology investments. We aim to balance cost management with enhancing retailer profitability and customer satisfaction.”
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