About half of consumers will switch brands if their expectations are not met, pushing African retailers to continually innovate. Yet across the continent, growth is slowing.
In South Africa, real retail growth has declined in recent years due to economic stagnation and inflation. In East Africa, GDP growth remains strong, but formal retail is hampered by infrastructure gaps and logistical inefficiencies.
To compete in a more digital and data-driven market, retailers are scaling up technology investments. Gartner projects African retailers will spend $300 million on cloud-based enterprise applications in 2025, growing 10 to 12 percent annually over the next three years. Still, many are struggling to turn those investments into measurable business outcomes.
Three challenges holding retailers back
- Fragmented systems and processes
Many retailers deploy multiple best-of-breed applications and centralize data in a data lake but fail to deliver seamless customer engagement, real-time visibility, and operational reliability. Disconnected systems, incomplete data context, and AI treated as an add-on rather than embedded into workflows cause inefficiencies.
For example, a shopper might see a product online, call a store to confirm availability, visit in person, and find a different price. Or they may buy online but be unable to return in store due to unsynced data. This lack of integration between customer data, inventory, pricing, and orders disrupts the experience and drives up costs.
A Gartner survey found that 66 percent of organizations say application sprawl and complexity hinder their digital goals, leading to inefficiencies and reduced reliability.
- Data remains underused
African retailers collect vast amounts of data from point-of-sale systems, loyalty platforms, mobile apps, and third-party sources. But 55 percent of business leaders cite poor data quality and fragmentation as their biggest barriers to data-driven decision-making.
Much time is spent managing data and building dashboards instead of making decisions, underscoring the need for streamlined processes.
- AI without a foundation
While AI is a popular topic in boardrooms, scaling projects beyond pilots remains a challenge. Globally, nearly three-quarters of organizations face this problem. In Africa, poor data quality, outdated IT infrastructure, and a lack of AI-ready processes create additional obstacles, leaving many AI efforts as isolated experiments with no significant return on investment.
The case for a unified platform
Industry leaders are turning to connected, industry-specific application suites to run their value chains with confidence. This ensures consistent customer experiences, minimizes stock-outs, supports on-time delivery, and enables seamless omnichannel shopping.
SAP’s Business Suite, for example, automates processes, delivers actionable insights, and optimizes workflows. Its Business Data Cloud integrates and harmonizes organizational data, creating a foundation for AI at scale.
This approach allows retailers to unify sales, inventory, promotions, and customer behavior data to enable AI-powered decision-making. End-to-end process integration supports cross-functional workflows and taps into a global ecosystem of innovations.
Retailers using SAP’s connected platform and AI capabilities report a 20 to 30 percent drop in customer churn, 30 to 50 percent fewer stock-outs, up to 40 percent productivity gains, and a 20 to 30 percent reduction in IT spending.
For African retail to realize its data-rich, AI-powered future, companies must move beyond legacy systems and embrace unified platforms that combine applications, data, and AI to drive competitiveness.
