E-commerce offers businesses opportunities to grow, says Nedbank

Like most sectors, technology has had a profound impact on the banking sector, improving efficiencies and enhancing the customer experience. When it comes to e-commerce, technology has enabled a faster and more reliable banking process. 

The Covid-19 pandemic changed consumers' attitudes, behaviours and purchasing habits. People started shopping more consciously, and there was a significant rise in digital commerce. E-commerce transactions in SA grew from $4.4bn in 2017 to $7.1bn in 2022 and is expected to reach $9.2bn by the end of 2023, with the majority of transactions facilitated through a credit card. 

Post the pandemic, the rise in digital commerce has continued and is being accompanied by a shift in the way consumers perceive value. 

To remain sustainable, businesses need to pivot their offerings to ensure they are meeting their clients’ needs, including embracing digital platform business models, says Pascalle Albrecht, national head of commercial card issuing & card acceptance sales strategy at Nedbank. 

The challenge for most small businesses, however, is that they don’t have the resources to invest in the platform economy or to deal with cyber threats effectively. Given increased focus on data privacy and data protection, businesses need to have cyber security initiatives in place to protect customer data. 

Albrecht says the rise of digital technologies has made vast quantities of data available. “Companies have realised the benefits of data insights to help them make better decisions, including allowing them to tap into their customers’ payment habits and experiences. There is growing demand from consumers for payments to be faster, easier, convenient, safer and more cost-effective, which requires more robust payment solutions from financial service providers.”

Digital and e-commerce trends are playing a key role in evolving banking services, she says, adding that client demands for more efficient banking services and payment solutions are responsible for much of the innovation taking place in the banking and fintech space.

Technology is playing a growing role in the customer experience. “Increasingly, clients want to do everything more easily and conveniently on a digital platform. We have, for example, seen a rise in the number of clients who use banking apps and more clients switching to a bank with a digital platform.”

Interestingly, 60% of all e-commerce users are between the ages of 18 and 34. This means, says Albrecht, that businesses need to adopt an omnichannel strategy with solutions that meet the needs of future younger clients as well as current clients. 

Most businesses, she says, will still need a brick-and-mortar presence. “An effective omnichannel strategy requires that the business tests out different channels to find the right balance.” 

Now that growth in the digital and e-commerce has stabilised, the opportunity set in e-commerce is much clearer, says Albrecht. Those businesses who make the shift to e-commerce are able to provide customers with a number of benefits. These include faster buying experiences and greater flexibility, allowing customers to shop anywhere and any time. This provides the business with extended customer reach compared to a physical store, enriching their product listings with more information and providing the business with extensive data to better inform decision-making. 

On the flip side, the platform economy and e-commerce has given rise to more competition. Consumers now have more choice than ever before. In addition to competing on product, price, place and promotion, businesses now also need to compete on customer experience, says Albrecht. 

“Customer experience includes everything from the payment process to efficient and timely order fulfilment and delivery. In the e-commerce space, a significant challenge is a high rate of cart abandonments. Businesses need to ensure that visits convert to a sale and that checkout processes are easy.” 

She cautions, however, that in the drive to go digital to reduce costs and grow, businesses should not lose sight of the need for a human touch and human connections. “Don’t make assumptions about what clients want and always ensure that your offering is relevant and adds value.”

This article was sponsored by Nedbank.