Trends in e-commerce for 2017
Two ground-breaking e-commerce trends are set to come to the fore in 2017, says NetFlorist MD Ryan Bacher.
First, Bacher predicts that, thanks to ride-hailing service Uber and other similar services, in-territory deliveries – the delivery of items within a small radius, such as from Parktown North to Saxonwold – will enable small businesses to be online. This will remove the major barrier presented by the logistics around deliveries and working with couriers.
Small shops such as local fruit and vegetable markets or stationary stores will be able to place their businesses in the online space. In much the same way that you can order an Uber to take you from A to B, so these delivery services will take purchases from the store to the home of the consumer – in less than 40 minutes.
Second, Bacher believes larger enterprises, such as retail stores, will make a greater effort in the e-commerce space by allocating divisions to focus solely on e-commerce. It’s a tipping point for the industry, he says, with small players being enabled by delivery services and larger ones investing in e-commerce. He describes this as the perfect storm for e-commerce in SA.
However, Bacher says e-commerce in SA lags behind the rest of the world. Interestingly, he mentions a recent UBS Global research report on Naspers’s half-year results, which makes no mention of online retailer Takealot.com, which the media company has a stake in. This, he says, suggests just how small the SA industry is relative to the rest of the world. It also indicates how little attention we get from global research papers when it comes to e-commerce.
Bacher admits there are still gaps in the industry, particularly in the mobile space. “While 35% of NetFlorist’s traffic comes from our mobi-site, just 20% of the transactions take place on mobile,” he says. This shows that consumers are not yet as comfortable transacting on their mobile phones as they are on their computers. The challenge for e-commerce businesses will be to close the gap between traffic on mobile sites and conversion rates. “We need to make the mobile experience more user friendly, investing in technology that will enhance the look and feel, and improve navigation around the site,” he says.
It’s not easy to launch an e-commerce business. Because of this, says Bacher, competition within the market comes mainly from existing businesses launching online components, and not from new, “pure-play” e-commerce businesses. This is largely due to a lack of venture capital in the space – a significant amount of capital is required to launch an e-commerce business, and investors remain wary.
Ultimately, Bacher says e-commerce in SA is lagging, and it will be some time before there is significant investment in new technologies. However, he predicts the industry will grow in 2017 as more small and large businesses come online – a positive and exciting move for the industry.
The big take-out: Trends that are likely to shape the e-commerce industry in 2017 include an increased number of large organisations developing e-commerce divisions and more local businesses venturing into the online space, says NetFlorist’s Ryan Bacher.