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The retail industry is defined as ‘establishments selling merchandise for personal or household consumption and consists mainly of apparel, technologies, food and pharmaceuticals’ (Lucintel, 2016:1). During the years 9000- 6000 BC, the earliest form of retail was established as barter systems in which cows, camels and sheep were traded as currency (Braun, 2015). As accounting systems and technology, such as cash registers developed, the first modern day department store was constructed in 1890. Originally, retail was conducted in the form of single-product or local ‘corner stores’ that governed the late 1800s and early 1900s and choice was limited for consumers (Leibowitz, 2013). However, with the introduction of the automobile and in- house refrigeration, these specialty stores transformed into department stores that

offered consumers a wide range of products, services and brands from one location (KPMG, 2009).

By 1929, the first supermarkets opened in America and consumers could find various grocery items under one roof (Braun, 2015). As department stores transformed into hyper- and supermarkets, the retail landscape changed from category-specific stores to ‘one-stop’ shops (KPMG, 2009). Between 1930 and 1960, the shopping mall culture was established with the invention of the first shopping cart and electronic cash registers (Braun, 2015). Aided by advances in technology and developments in direct marketing and distribution systems, retailers created new ways to reach and satisfy their consumers’ needs, resulting in the ability to reach a larger consumer base.

The consumer base continued to expand with the introduction of global online shopping in 1994 and the establishment of Amazon. The retail industry has experienced much growth over the past decades and continues to grow globally and locally. Lucintel, a global market research firm, predicts that in 2017 the global retail industry will reach approximately $20,002 billion with a growth rate of 3.9% from 2012 (Lucintel, 2016). In their report, Global Retail Industry: 2012-2017: Trends, Profits and Forecast Analysis, Lucintel also indicates that the global retail market is largely driven by the Asian Pacific region, which represents 35% of the global retail market (Lucintel, 2016). Although dominated by developed countries, the global retail industry is also largely affected by emerging economies.

The global retail industry is largely focused on developing nations with rapidly expanding middle classes, such as the Black Diamond consumer group in South Africa, attracting large businesses to these countries. The growing middle class is one of the key factors driving international retail expansion in developing countries on the African continent (More in store for African retail & consumer businesses, 2016). The modern retail industries in the BRICS (Brazil, Russia, India, China and South Africa) countries are said to have maximum growth potential and according to reports, global retail sales reached $24 trillion in 2015 (Agarwal, 2015). These figures highlight the importance of the retail industry in the economies of all countries, but especially in developing nations, such as South Africa (Ward, 2015).

The economic performance of South Africa underwent drastic change in the 1900s during the country’s political transformation to a democratic society. From 1984 to 1994, South Africa experienced poor growth performance rates due to international sanctions and local opposition to the Apartheid government (Du Plessis & Smit, 2006). The transition to a free and democratic South Africa in 1994 welcomed stable economic growth, an increase in consumer income and gave rise to a growing black middle class (Retail in South Africa, 2011). Following the 1992 economic recession in South Africa, the country was again affected by a recession in 2008 (South Africa goes into recession, 2009). The country fell victim to a decrease in consumer spending and lower overall household spending during 2009. However, fiscal policies, increased infrastructure spending and tourism income from the 2010 FIFA Soccer World Cup, gave the economy and retail sales a much-needed boost (Retail in South Africa, 2011).

Today, the South African retail industry is one of the largest retail industries in sub- Saharan Africa and was ranked 6th _{in the African Retail Development Index (A.T}

Kearney, 2015:1). The Index ranks the most attractive markets, as well as those markets with the most growth potential. In 2011, the tertiary sector (the economic sector concerned with the provision of services) contributed 69.1% to the South African economy, of which the retail and wholesale trade sector contributed 13.7% (Aye, Balcilar, Gupta & Majumdar, 2013:2). The importance of the South African retail industry is further illustrated by the employment figures that the industry boasts. The retail industry generally contributes to approximately 7% of total national employment figures, the highest being 7.9% in 2006 (The Retail Industry on the Rise in South Africa, 2012:24). Statistics prove the retail industry to be one of the leading industries in the country, in terms of share of employed labour force (Aye et al., 2013).

Even though retail industries in South Africa and across the world are important to economies and are characterised by a stable growth rate and rising consumer demand, various risks such as poor governance and logistical problems still pose threats to the retail industry. Retailers are responding to these threats and changes within their environments by adapting their business strategies and in response, consumers are adapting to these changes by adjusting their shopping behaviour. Due to Internet advancements and changes in consumer preferences and need sets, the use of the Internet for commercial activities is gaining momentum as one of the

strategies employed to adapt to the changes in the retail setting and consumer shopping behaviour. More than ten years after the origin of online shopping in the country, the majority of South African retailers still have brick-and-mortar stores that consumers visit to purchase products. However, many consumers are shifting from this traditional shopping channel to using the Internet as a shopping channel, or using both channels depending on situational variables. As traditional retailers face increasing competition, it is imperative that they strive to improve their offering by integrating an in-store channel and online presence via the Internet (Spence, Puccinelli, Grewal & Roggeeveen, 2014).