A South African model for e-commerce
There will be a shift in e-commerce in SA this year, particularly in terms of innovation around delivery, collections and returns, says Robyn Cooke, head of e-commerce for the Foschini Group (TFG).
Cooke says market players have no choice but to become more innovative because this is what consumers expect in the e-commerce space. However, she adds that local retailers have come to realise that simply mirroring the logistics practices of e-commerce retailers in the US and Europe doesn’t work in our market.
E-commerce in SA is still in early and rapid growth stage. Existing online retailers are achieving double-digit growth in trade each year, as more and more consumers become aware of the accessibility and convenience of online shopping. As such, the market is also becoming more competitive.
“For the consumer, this creates an environment where online shopping is an exciting place to shop. It’s new enough that not everybody does it, and it has not yet become a routine activity,” says Cooke. However, she adds, this is set to shift as the handful of online shoppers move from early adopters to the mass market. That said, this can only happen in SA if online retailers are smart about meeting the specific financial, logistical and technological needs of the market.
Mobile e-commerce is showing the fastest growth and online retailers need to be positioned as mobile-first in order to succeed in this market. However, they need to remember that credit access is limited for many South Africans, making it necessary to provide various payment methods that allow customers to shop online. In addition, delivery processes must be adjusted to address the unique living patterns of South Africans.
Cooke says TFG has a number of projects under way in this area. The Deliver 2 Me (D2M) initiative, for example, is being piloted in Cape Town and will shortly be launched in Johannesburg and Durban. D2M delivers the customer’s purchase directly to him or her wherever they are at the time of the delivery, using an Uber-like geolocation service. “We believe this is a world first, driven by the unique needs of our market,” says Cooke.
Personalisation will also come to the fore in 2017, she says. Once again, this is a concept that will need to work in accordance with the needs of the SA market. As such, Cooke explains that it’s about asking consumers for their feedback – what they want to experience online, what would make the experience more convenient and efficient and ultimately add value. And when it comes to value, Cooke adds, it’s important to add value that the customer doesn’t expect to receive.
The biggest challenge facing SA’s e-commerce businesses, Cooke believes, lies in educating the market. Online shopping is a new concept in this country, which makes it rather intimidating for some consumers. Retailers therefore need to demonstrate security, show value and ultimately ensure that the customer journey is as simple as possible. Simplifying, improving accessibility and offering more benefits to customers must be an ongoing process – otherwise why would consumers disrupt their normal shopping life to take up online shopping, she argues.
Ultimately, e-commerce needs to be as democratic as possible, providing access and opportunity to as many South Africans as possible. This, according to Cooke, is what all retailers should keep in mind for 2017.
The big take-out: A truly South African e-commerce model needs to meet the unique needs and lifestyle habits of consumers, says TFG’s Robyn Cooke.