JSE-listed retailer TFG, formerly known as The Foschini Group, is on a shopping spree that could see it become a leading tech-led retail firm in Africa.
Earlier this month the 98-year-old retailer announced the R2bn purchase of Tapestry Home Brands, the owner of Coricraft, Volpes, and Dial-a-Bed chains. In 2020, the clothing, homeware, and jewellery retailer also bought Jet stores from rival Edcon.
TFGs voracious appetite has also seen it move into the tech space. In September last year it bought the specialist mobile app Flat Circle, and in December it bought Quench — a digital shopping platform and last-mile delivery provider, signalling its biggest push into e-commerce.
The Quench acquisition is expected to enhance TFG’s existing capabilities across the fulfilment network through proprietary software and engineering. That said, one wonders whether TFG’s acquisition of Quench and Flat Circle circles are different or part of the industry’s race to build the shopping experience of the future.
Furthermore, do TFG’s bosses ask themselves tough questions posed by Accenture in its latest report, The Retail Experienced Imagined? What do modern shoppers expect? What will delight them?
“Now is the time for retail brands to ambitiously reimagine their relationships with customers, and to set a high bar. This entails focusing the whole business on the delivery of exceptional experiences, which is what we call the Business of Experience,” the report reads.
“It entails the rewiring of the customer-facing functions of the organisation — marketing, commerce, sales, and service. The Business of Experience is an approach that allows organisations to become customer-obsessed and reignite growth. Future success will depend on a retailer’s ability to adapt business models and create shopping experiences that engage and delight.”
TFG’s journey to create a new shopping experience started in 2018 when it launched what it termed SA’s first online marketplace: myTFGworld, a platform supported by 2,600 physical stores. The platform was aimed at repositioning the group’s e-commerce strategy by offering local consumers a marketplace that would take on global e-commerce marketplaces such as Amazon and Walmart.
Today, TFG has finally been rewarded for its foresight. “Our e-commerce offering in SA was profitable for the first time, which reinforces our commitment to remain on the forefront of digital transformation,” TFG says in its 2021 financial results. myTFGworld has more than 26-million customers, making it the envy of rivals.
In June, after seeing the benefits of investing early in e-commerce, TFG intensified its push to be Africa’s top tech-led retailer. Last year, it established TFG Labs, a tech division not dissimilar to ShopriteX, a digital business hub that combines data, technology, and innovation with its operational strength to improve the customer experience.
TFG Labs, which is run by ex-Takealot executives and Superbalist founders Claude Hanan and Luke Jedeikin, has also launched a Sportscene app and TFG Jewellery online, including Galaxy & Co. — its first purely digital offering.
“We are laying the foundations to become the largest, most reliable, and most profitable e-commerce destination on the continent via a simplified, customer-centric approach,” Hanan said at the time.
“We started viewing our stores as mini DCs [mini distribution centres] over a year ago, via our one-stock initiative — enabled by RFID [radio frequency identification] — making every stock unit ‘visible’ to customers, regardless of its location.”
During the year, TFG invested R346m on its digital transformation strategy to support the rollout of RFID, online inventory fulfilment, Yoobic, and mobile point-of-sale system.
Over the past five years, it has spent R1bn on digital transformation and e-commerce and plans to invest a further R500m over the next three 5 to five years.
While chasing the dream of being a top technology-led retailer, TFG — whose brands include American Swiss, @home, Exact, Fabiani, Foschini, Galaxy & Co., G-Star Raw, Hi, Markham, Totalsports, Sportscene, and Sterns — isn’t leaving its workers behind.
“We made meaningful investments over the past few years to digitally equip our employees to be more customer-centric and work more efficiently,” the company said recently. “These investments include one of the largest RFID roll-outs in the world and the optimisation of our OneStock order management system.”
TFG has also teamed up with digital lender TymeBank to integrate end-to-end financial services in-store and through its digital platforms.
We also hope it will quickly integrate the new acquisitions such as Tapestry into its tech-led retail model, all the while remembering that using technology does not guarantee success; it is just one piece of the puzzle.
• Lourie is a former correspondent for Thomson Reuters, Business Report, Fin24 and Finweek magazine. He is also the founder and editor of techfinancials.co.za
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