Clicks’ Strategic Overhaul: Beyond Delivery, a Blueprint for Retail Dominance
One in three products sold at Clicks is now a private label or exclusive brand – a figure rapidly climbing towards 35%. This isn’t just a retail statistic; it’s a signal of a fundamental shift in how South African consumers are shopping, and Clicks is positioning itself to capitalize on it. While the retailer recently reported a 15.9% sales increase, leadership acknowledges past sluggishness and is embarking on a comprehensive overhaul, starting with a complete re-platforming of its e-commerce system.
The E-Commerce Revolution: More Than Just Faster Delivery
The upcoming revamp of Clicks’ online platform – encompassing both app and web – isn’t solely about addressing previous delivery limitations. CEO Albertina Engelbrecht emphasizes a broader scope, hinting at enhanced functionalities designed to elevate the entire customer experience. This move is critical. Consumers now expect seamless omnichannel experiences, and Clicks’ success hinges on meeting those expectations. The focus on convenience is paramount, but the addition of new features suggests a deeper ambition: to create a digital ecosystem that fosters loyalty and drives repeat purchases.
This isn’t happening in a vacuum. The South African e-commerce landscape is becoming increasingly competitive, with players like Takealot and Amazon (potentially) vying for market share. Clicks’ investment in its digital infrastructure is therefore not merely an upgrade, but a strategic defense and a platform for future growth. The re-platforming will likely incorporate features like personalized recommendations, improved search functionality, and streamlined checkout processes – all essential components of a modern e-commerce experience.
Private Label Powerhouse: A Margin Booster and Brand Builder
The impressive growth of Clicks’ private label and exclusive brands – generating R9.7 billion in sales and contributing 25.9% of total revenue – is a key driver of its success. This strategy offers several advantages. Firstly, it boosts margins by reducing reliance on branded products. Secondly, it allows Clicks to control product quality and innovation. And thirdly, it builds brand loyalty by offering unique products that customers can’t find elsewhere.
The target of 35% contribution from private label brands demonstrates a clear commitment to this strategy. This isn’t simply about offering cheaper alternatives; Clicks is actively developing high-quality, innovative products that compete directly with established brands. This approach is particularly effective in categories like skincare and personal care, where consumers are increasingly seeking value and quality.
UniCare Expansion: Filling a Critical Healthcare Gap
Clicks’ UniCare pharmacies, formerly M-Kem, are experiencing significant growth, fueled by after-hours doctor services and strong performance in primary healthcare, diabetes care, and IV clinics. The planned expansion to two greenfield sites and two acquisitions by February next year signals a strategic bet on the growing demand for accessible and affordable healthcare. This expansion isn’t just about adding more pharmacies; it’s about providing a broader range of healthcare services to underserved communities.
The success of UniCare highlights a broader trend: the increasing integration of retail and healthcare. Clicks is uniquely positioned to capitalize on this trend, leveraging its existing store network and brand reputation to provide convenient and affordable healthcare solutions. This is particularly important in South Africa, where access to quality healthcare remains a significant challenge.
Strategic Store Expansion & Format Diversification
With a target of 1,200 stores in the medium term, Clicks is continuing its aggressive expansion strategy. The planned investment of R1.3 billion in 2026, with over half allocated to new stores and refurbishments, underscores this commitment. Importantly, the company is also exploring smaller store formats in low-income areas, demonstrating a commitment to inclusivity and accessibility.
This diversified approach is crucial. While larger stores cater to a broader range of needs, smaller formats allow Clicks to penetrate new markets and serve customers who may not have access to traditional retail outlets. The fact that 53.2% of South Africa’s population lives within 5km of a Clicks pharmacy highlights the convenience factor, and expanding this reach will be key to future growth.
Navigating Challenges: General Merchandise and Market Dynamics
Despite overall positive performance, Clicks acknowledges challenges in the general merchandise category, with revenue down 5.5%. This decline was attributed to stock issues and market oversupply. However, the company is actively addressing these issues by reviewing product ranges and regaining market share. This demonstrates a willingness to adapt and respond to changing market conditions.
Investment analyst Sean Culverwell at Anchor highlights Clicks’ resilience, describing it as a “high-quality, defensive growth play.” This assessment is supported by the company’s strong earnings growth, returns on equity, and ability to maintain margins despite a challenging retail environment. The ongoing share buyback programme further enhances shareholder returns.
Looking ahead, Clicks is well-positioned to continue its growth trajectory. The combination of a revamped e-commerce platform, a thriving private label business, an expanding healthcare division, and a strategic store expansion plan creates a powerful foundation for future success. The key will be to continue adapting to changing consumer preferences and navigating the evolving retail landscape.
What strategies do you believe will be most crucial for Clicks to maintain its competitive edge in the coming years? Share your insights in the comments below!
