Tag: online

Black Friday goes online

By Georgina Crouth Time for IOL

Deals for more days, greater choice and other enticements, just to keep customers out of brick-and-mortar stores – that’s how retailers are responding to a pandemic Black Friday because Covid or no Covid, the sales bonanza is here to stay.

E-commerce is estimated to have surged by at least 16% this year in South Africa and Covid-19 has changed the game for retailers.

In May, Nielsen found 65% of South Africans shopped less at supermarkets due to Covid-19, while those who already shopped online shopped more (29%) and 21% continued as before.

Marketing agency HaveYouHeard head of insights Claudia Schonitz says: “Many, many South Africans have emerged from the pandemic with considerably less spending power. Not only will this put pressure on brands and businesses to fight for less, they will need to work harder to convince consumers to support them.

Schonitz says the most noticeable shifts have been in three “domains”: social, home and e-commerce.

“When it comes to social, many people have realised just how much they need others and, over the next 12 months, connecting socially will be central to much of our activity and behaviour.

“We have become better at not doing much (while also doing more in the home) and enjoying it. This, I predict, is a behaviour that will persist for much longer.”

HaveYouHeard’s recent survey found 81% of respondents who shopped for groceries online stated that safety from Covid-19 was the biggest benefit to online grocery shopping, but only 27% said they were likely to continue once Covid-19 was no longer a threat.

Remember, remember the sales of November

Last week, announcements came in thick and fast about how brick-and-mortar stores would be offering Black Friday for the entire month of November.

Pick n Pay has extended Black Friday to two weeks, with more deals in store and online. John Bradshaw, retail executive for marketing at PnP, says, “Black Friday is a very busy trading period so we’re extending Black Friday to two weeks to keep our customers safe and able to shop for great deals at their leisure. We will also be limiting the number of customers in our stores at any one time to keep everyone safe, with highly organised queueing.”

The retailer says its stores are better prepared this year, after extensive planning with suppliers, and they’ll be opening as many tills as possible to keep customers from queueing as much as possible.

In-store deals will also be available online, but the retailer will run online only deals before launching its in-store deals, with new deals being added every few days.

Massmart stores Game and Makro are running Black Friday deals for all of November. Game has increased staffing levels and expanded its Uber Eats partnership for Black Friday to ensure it is able to meet customer expectations. It is also offering its 1 Cent Price Surprise on all Black Friday purchases. Both retailers will be spreading their deals out over different weeks. Game’s first set of deals will be announced and launched online at midnight on November 1 and be available exclusively for that week.

Uber Eats is the exclusive delivery partner for small electronics and home office essentials. Consumers are promised a delivery time line of 10 to 14 days on all Black Friday orders, with the delivery fee being capped at R90 – except for large appliances such as fridges and chest freezers, which will carry a R70 surcharge per item, per order. Newsletter subscribers will have early viewing access to all Black Friday deals.

But don’t expect door-busting deals in-store: Game stores will only trade between 9am and 6pm during the week, Saturdays from 9am to 5pm and Sundays from 9am to 4pm.

Cyber Monday will run exclusively online.

Makro similarly says it will be offering “unbeatable specials” for a week at a time, which are not to be repeated.

There’s also 10% back in mRewards for the opening week (November 2 to 8) on all non-promo general merchandise in store and online; the delivery fee is capped at R90 (excluding extended range items and commercial orders); free locker delivery on qualifying orders; same-day delivery on grocery and liquor orders through the One Cart app; 50 new deals every week.

Warrick Kernes from the Insaka eCommerce Academy says brick-andmortar stores have been forced to prepare for an online surge to avoid the risk of Black Friday becoming a super-spreader.

“E-commerce has been growing 25% year-on-year over the past decade but its growth this year has been stepped up: consumers were forced to adopt processes and tech that they should have used before, because of the joy and ease of having things delivered at home or office.”

Kernes says while many industries were negatively affected by Covid, e-commerce has benefited greatly because consumers have cottoned on to the convenience.

The spectre of Black Friday, though, raised concern about super-spreaders: “Even if we don’t see a second wave in South Africa, retailers would not want to encourage shoppers to come in droves to stores for big-screen televisions, etc.”

Spreading out the sale makes sense for any seller because there’s less “noise” around the day, customers get to pick their deals calmly and they aren’t bombarded by marketing material.

Massmart’s strategy is “genius”, he says: “Consumers aren’t going to shop around as much, so the retailers can close sales quicker. Their teams can handle the influx of deals and the processing and dispatching of orders. Spreading it out allows for a quieter team, which means retailers can deal with more sales and not overload the couriers.”

Towards the end of a year scarred by a pandemic and economic devastation, online retailers can expect a bumper sales period because shoppers would want to avoid physical retail stores and shopping malls over Covid19 fears – and capitalise on deals, more than ever.

Kernes believes this is a massive opportunity for online sellers in South Africa to benefit.

 

Source: Business Insider SA

Online business registrations are surging in South Africa, FNB says.

The dire financial consequences for many during South Africa’s lockdown have forced business owners to change their strategies and business plans in order to survive, it believes.

Many have used the lockdown period to either open their own personal services, or to formalise existing business for relief funding and operating permits.

Online business registrations are surging in South Africa, says First National Bank, as South Africans change course to adapt to the impact of the coronavirus pandemic on traditional businesses.

The country’s strict lockdown meant that mining and manufacturing ground to a halt for weeks. The impact on the hospitality sector was also devastating, resulting in job losses for many South Africans and a sharp economic decline.

The dire financial consequences for many have forced business owners to change their strategies and business plans in order to survive, with many using the lockdown period to either open their own personal services, or to formalise existing business for relief funding and operating permits, the bank believes.

FNB data shows an increase in the number of businesses using a government initiative where entrepreneurs use the BizPortal.gov.za website to register their new businesses at the Companies and Intellectual Property Commission (CIPC).

Gauteng led with 44% of applications followed by KwaZulu-Natal at 13%, Mpumalanga at 10%, and the Western Cape at 9%.

“We are seeing a strong uptake through this portal as well as an increase in applications through our normal CIPC interactions, where clients can register a company on FNB’s website. This indicates that more and more entrepreneurs want to formalise their businesses in order take advantage of new opportunities presented as a result of Covid and further benefit from financial support provided by both private and public sector,” says Lauren Deva, head of sales for transactional products at FNB Business.

“When the BizPortal started, we initially had an average of 700 registrations a month. However, this significantly increased to 14,000 registrations during the lockdown period, between April and end of August. On average 2,800 businesses were registered per month via the portal,” says Deva.

 

Makro and Game unveil Black Friday plans

Source: Supermarket & Retailer

Massmart has revealed the Black Friday 2020 plans for its Game and Makro retail stores. Both Game and Makro will be running Black Friday deals throughout November 2020, instead of their previous strategy of only releasing deals for a restricted three- to five-day period from 27 November.

This year, Black Friday deals from both stores will run from 2 – 29 November.

Massmart added that this plan will involve spreading deals over the month of November rather than concentrating deals into just one week or day.

“Black Friday traditionally sees high concentrations of shoppers in retail stores across the country, which can create a challenging shopping environment,” said Massmart Corporate Affairs Executive Brian Leroni.

“Therefore, we have taken the decision to reimagine the way we do Black Friday in 2020.”

“In an effort to create a more consumer-friendly Black Friday experience while adhering to all COVID-19 and social distancing protocols, Makro and Game have taken the decision to extend the duration of our Black Friday promotion,” Leroni said.

South Africa’s most popular Black Friday stores

Leroni added that Massmart’s research has shown that Game and Makro are South Africa’s most popular Black Friday shopping destinations.

“To further improve the shopping experience during this period, Game and Makro have, after analysing the Black Friday shopper information available to us, taken the decision to provide our customers with more opportunity and time to benefit from the Black Friday prices by rather releasing new Black Friday deals each week during the month of November,” Leroni said.

“These unbeatable specials will only run for the week in which they are announced, and will not be offered again – so we encourage shoppers to take advantage of the deals each week, rather than waiting until the end of November as they normally would.”

More information about the incredible deals including some big-ticket items such as large appliances, electronics, home living items, televisions and more will be provided in the coming weeks, the company said.

It added that sneak previews of some of the deals will be available on the Game and Makro social media feeds and email newsletters.

“Customers can subscribe to Game and Makro newsletters on each of the brand’s websites for sneak previews,” Massmart said.

 

Online grocery shopping sees a surge 

By Ross Jenvey, founder and general partner at Kingson Capital 

There can be no question that Covid-19 has changed the way the world operates. Some trends are temporary, and some are more permanent, with the common question nowadays being: what will the new normal look like? As investors in early-stage technology companies, we at Kingson Capital are trying to establish what trends are likely to stick around long term after lockdown truly ends and identify the right companies to invest into that will benefit.

We believe that e-commerce will permanently benefit from people wanting to, or being forced to, socially distance themselves. One of the sub-sectors in this space is online grocery shopping. Adoption risk is common in most early stage companies, where new technology is built to change the way things are done, but people are often resistant to adopt the change. However, once forced to try something different, as many people have been in the last six months, the inertia is broken, and they often refuse to go back to the way they did things before.

Data released by Pitchbook on the US online grocery market shows that the early stages of lockdown in 2020 allowed grocery sales to regain some of the market share it had lost against restaurants and take-aways. More sophisticated technology, coupled with a slew of online grocery shopping options offered by stores and independent tech companies, have seen global online grocery delivery & pickup   increase from $1.2bn in August 2019 to $6.6bn in May 2020, a 450% increase in just nine months.

Pitchbook Research furthermore predicts that in the US, online grocery shopping is going to grow from 4.9% of total grocery spend in 2019 to 11.6% by 2025, a 2.4x increase in wallet-share. No matter how you look at it, this represents significant growth. The poster-child of the online grocery shopping industry in the US is Instacart, which raised $225m in a VC-funded round in June 2020, ballooning its valuation from $7.9bn in late-2018 to $13.7bn. Delivery Hero is a similar company, listed in Germany, and in the just over nine months to mid-September 2020, its share price has increased 28% (to a valuation of €18.0bn) as investors continue to take a positive view on this sector.

In South Africa, we are seeing equally positive developments. The main local players – OneCart, Checkers 60/60, Bottles, Quench and Zulzi – have all completed or embarked on funding rounds in 2020 led by JSE-listed companies. The main differentiation between these players is based on multiple versus single retail platforms that a customer can choose from. We are also aware that several of these players have seen anywhere between 200-500% growth in their daily orders since lockdown was implemented in March 2020. Google search analytics has shown that after an initial surge, the reduction of lockdown restrictions in South Africa has correlated with a reduction in online searches for “Online Grocery and Delivery services”. However, that search is still roughly twice as popular as pre-lockdown levels, and the growth in order volumes referred to above talks to the stickiness we would expect, as people become repeat customers. This is the kind of growth that usually attracts competition, and one place we foresee it coming from will be UberEats, after Uber bought the Mexican grocery delivery app business, Cornershop, in October 2019. New apps will also likely spring up.

Research released by the South African Council of Shopping Centres in May 2020 posted an expectation that retail sales will be down as much as 15% from current levels, and there will be slow recovery in shopping centre activity as GDP and employment both contract. Their survey revealed that 22% of respondents were not comfortable with visiting shopping centres and preferred online shopping, and 32% said they were regular online shoppers. This will likely accelerate the trend towards e-Commerce, as retailers try to protect their market share by pushing into this space, to the benefit of the incumbent tech solutions in the market. Interestingly, the major South African retailers such as Woolworths, Pick n Pay, Checkers and MassMart have all recently partnered with or acquired e-Commerce on-demand service providers. The ultimate winners will be the providers that can win consumer trust with consistent excellence in fulfilment and on-time delivery percentages.

Online grocery shopping is likely to be one of those sticky trends which will benefit greatly from the new way the world will work post-lockdown. Pitchbook analysts seem to think this will happen globally, and we think that South Africa will show equally exciting growth, even though we have traditionally been late adopters of e-Commerce. It’s also a sector that is creating jobs, since the shoppers and drivers employed now in this industry are new jobs, and the low skill requirements of the jobs is important in a country like South Africa. Necessity often brings about change, and consumers clearly need to operate differently in the new world they will find themselves in.”

Why Takealot beats out Makro

Takealot is South Africa’s largest online shopping platform, with over 2 000 employees and sales of around R1 billion per month, according to MyBroadband.

Where Takealot succeeded: 

  • Takealot’s dominance is due to its logistics – the acquisition of Mr Delivery in 2014 gave the business ownership over its own logistics network through the Takealot Delivery Team division (formerly Mr D Courier).
  • Takealot offers unrivalled service levels and support
  • Takealot centralised its marketplace logistics, which means shoppers who purchase a product through its platform receive a consistent experience, independent of the seller.

Where Makro falls short:

  • Makro is a trusted brand with a national network of stores, exceptional buying power, and established logistics partnerships
  • Makro’s logistics fell apart – many online shoppers wait for weeks for their Makro orders to be delivered, and their support channels are a mess
  • Makro has a decentralised model which leaves it up to third-party sellers to send packages to shoppers.

 

Online stores suffer major delivery delays

Online retailers in South Africa are struggling to deal with the onslaught of orders during the country’s coronavirus lockdown.

  • Takealot is suffering delays of between two weeks and a month. One MyBroadband user sent the publication a screenshot of an order that had been placed on 26 May but was due to be delivered by 30 June. Consumers have also complained of an inability to get hold of customer service agents in order to schedule returns and get refunds
  • Yuppiechef customers have complained of slow delivery and of changing stock. One reader complained of her order being changed to “out of stock” three times
  • Makro consumers have been complaining of delayed deliveries, incorrect orders and a lack of access to anyone in customer care to deal with returns or refunds
  • Online grocery app Zulzi has also been plagued with complaints of incorrect deliveries, lack of customer service and outstanding refunds

By Vukani Mngxati, CEO for Accenture in Africa

COVID-19 is a global pandemic, evolving at unprecedented speed and scale. It is creating a universal imperative for governments and organisations to take immediate action to protect their people. Self-quarantine. Social distancing. Community spread. These formerly obscure terms are now everyday words. New habits and behaviours are forming that in many cases are not likely to go away after the crisis passes.

And while the impact to the economy is not fully known, both direct-to-consumer (D2C) and business-to-business (B2B) organisations are scrambling to meet the immediate needs of their marketplaces. In particular, those who have viewed digital commerce as a secondary channel now need to reorient every aspect of their business towards a digital commerce mindset. There exists an opportunity to double-down on digital commerce, augmenting existing offerings and creating new lines of service.

While this represents an opportunity to grow revenue, attract new customers and drive channel shift, it depends on digital channels and capabilities having appropriate scale and stability to handle the crush.
Reassure your customers and employees

There is unprecedented confusion on what, where and how to buy things, as customers are concerned about who to buy from, whether they are paying a fair price or even whether they will be able to find the essentials they need.

Unfortunately, some businesses who proved to be opportunistic and exploited customers by loading prices of critical items, contributed to this issue. This may have yielded profits in the short term, but in the long term, they will lose market share as customers are increasingly gravitating towards companies that are truthful, transparent and driven by a clear purpose.

These principles extend through customer channels and their engagement with retailers, as well as into B2B relationships and how companies work with their distributors, wholesalers, or manufacturing direct suppliers. This is amongst other confirmed by a study that was released in collaboration between the World Economic Forum (WEF) and Accenture in January 2020, which indicates that companies who execute stakeholder-eccentric leadership, display stronger financial performance.

If this was the case then already, this pandemic that currently affects the whole of mankind, has no doubt brought the need for human-centredness to the fore. Companies who can demonstrate these attributes will deliver a differentiated level of customer service and make themselves more relevant and connected to their customers – old and new – on an ongoing basis.

Stabilise your digital channels, platforms and infrastructure

With the closure of cafés, restaurants, bars and hotels and the grounding of airlines, much of this demand will need to be met by the grocery sector, online. That’s the new reality as mass quarantines and unpredictable retail stock availability cause online commerce to skyrocket. While this represents an opportunity to grow revenue, attract new customers and drive channel shift, it depends on digital channels and capabilities having appropriate scale and stability to handle the crush. Businesses must flex quickly to capture the opportunity, and systems must be prepared to withstand the increased loads.

Reconfigure and extend your offering for seamless online delivery

With the closure of retail establishments, and the disruption of supply chains, the rules for merchandise and inventory have fundamentally shifted. Historical data on what sells online vs. offline is out the window. Companies now have a lot of inventory that they are sitting on in retail outlets that they need to figure out how to get online.

Businesses that have historically invested in digital commerce sales tools will likely have an easier time adjusting to this new, digital first economy, while those that have only made moderate strides will be more greatly disrupted. For example, traditional auto auction houses are shutting down, while on-line auctions are fast becoming the norm – even in a reduced volume business, those that are digital-prepared are seeing increases. As businesses are realising the value of e-commercialising, this will in all likelihood also lead to a decline in the need for brick and mortar operations.

Power up your value proposition through power networks

All evidence points to the fact that the economy will continue to decline and that there will remain a requirement for social distancing for time to come. For this reason, customers will keep on abandoning brands they’ve been loyal to and migrate to companies who can deliver what they need in the fastest, easiest and most cost-effective manner. Better yet, if they can get it all from one single, service provider. This will require businesses to move beyond just creating ecosystems, to establishing power networks through symbiotic partnerships and collaborations to collectively expand their value proposition all together. At the same time, it is an enabler to establish lean and mean operations in an uncertain economic climate, whilst accelerating growth exponentially.

Leverage new behaviours for new growth

Naturally, the national lockdown forced business and society to start doing things differently. Gyms are helping their customers to stay fit through online fitness programmes. The healthcare industry is using virtual assistants and hotlines to respond appropriately to the COVID-19 crisis. Restaurants are providing online cooking classes. Consulting businesses and academies are providing information and counsel through webinars, online learning tools and systems. Businesses are enabling their staff to work remotely and are using online platforms such as Microsoft Teams to conduct meetings. Parents are using online mechanisms to educate their children, and tertiary students are tapping into online learning.

All these new behaviours can be leveraged for new business growth. For example, as South Africa has just moved to level 3 of the national response to the COVID-19 pandemic, only a portion of our children are able to return to school, and only some tertiary students are able to return to their educational institutions. This necessitates an extreme acceleration of the virtualisation and digitalisation of education, supplemented by substantially increased access to the internet, especially for those learners in disadvantaged and rural areas.

Unlock the potential of emerging trends

There is a myriad of trends that are emerging in this COVID-19 world, that present businesses with new potential avenues for growth. Health and safety are for example currently the first and foremost priority for both business and society and will in all likelihood not just remain a trend but become part of the new normal. Whilst discretionary spend is generally bound to decrease significantly, people on the higher end of the market who have been robbed of the pleasure of traveling for leisure, may be more likely to spend money on luxury items such as jewellery, to spoil themselves. In addition, every single person now requires enhanced access to the internet, more efficient technology and mobile devices to live, work and play from anywhere, at any time. This is a time to conceptualise novel solutions for at-home activity, at-home education, at-home entertainment and at-home workspaces.

Reassess relevance and reframe your strategy

Some of our industries that have been hit the hardest by the COVID-19 pandemic are the tourism, entertainment and beauty sectors. Businesses in these sectors have no choice but to reassess their relevance and adjust their strategies accordingly. While people are no longer able to go out and explore the whole wide world, the tourism sector will have to innovate ways to bring the whole wide world to them, by i.e. creating virtual tours or expanding their offering to include entertainment such as gaming. Entertainers can leverage online platforms to create worldwide events and distribute their material digitally. Hairdressers and beauty salons can provide ‘how to’ channels on a subscription basis and develop e-commerce channels for their customers to get the necessary products quickly and effortlessly.

Unlock the value of data to engage consumers optimally

As the landscape we find ourselves in is changing faster than ever before, the wants and needs of customers are also evolving at an unparalleled speed. The businesses who will be able to successfully deliver on these wants and needs, are the ones who are ever attuned to exactly who their customers are, what their preferences are, and what they may also need in future, before they even know it themselves. To this end, it is critical to acquire the most suitable technology to intelligently collect and interpret client data. However, in this ultra-competitive online race, it is no longer sufficient to simply deliver what customers want and need, it is also important how you deliver it. The businesses who will grab and retain their target audiences’ attention, will be the ones that leverage high technology to create immersive virtual spaces and continuously deliver the most engaging digital experiences.

Embrace e-commerce as a necessity, not just a priority

In conclusion, in this brave new COVID-19 world, digital commerce is no longer a priority, it is a necessity for the very survival of business. But whilst establishing their e-commerce facilities, business should never lose sight of what is first and foremost for their customers: Trust, relevance, convenience and economy.

Pick n Pay expands its online range

Pick n Pay Online is now offering a larger range of non-food items for delivery. This followed the recent announcement by Minister Ebrahim Patel that all permitted goods may now be sold online.

The non-food items that will be available online for delivery or “Click n Collect” under level four lockdown includes home entertainment items, such as televisions and gaming, and white goods, such as fridges, freezers, ovens, dishwashers, washing machines and tumble dryers. Camping and patio furniture will also be available.

Delivery of these heavier items is available in all major cities nationally and “Click n Collect” lets customers purchase their items online and collect their order from any hypermarket.

The COVID-19 outbreak has significantly accelerated the demand for online shopping and many shoppers turned to Pick n Pay Online for their grocery shop. Since the end of March 2020, Pick n Pay’s online shop has had more than 144,000 new customers registered online. This is 8x more registrations than the previous year. Pick n Pay online also experienced a 200% increase in active transacting online customers during the period.

Last year the retailer significantly enhanced its online offering, which included changing its logistics partner and investing in a dedicated online customer services team. Jessica Knight, Head of Pick n Pay Online, says that this helped them rapidly increased the online shop’s capacity and reach to meet the needs of many new customers who have turned to online shopping since the country went into lockdown.

“We have increased our delivery slots for our online shop, which has meant customers can now get a slot within a few days of placing their order. Customers can currently get a delivery slot within three to five days, depending on the area.

Knight says they are seeing a high percentage of returning customers. “This shows how many first-time online shoppers are really enjoying the ease and convenience of online shopping. We’ve also made it very easy to shop online, for instance, customers have their own personalised ‘aisle’ with their favourite items and they can create a shopping list for regular purchases.”

Pick n Pay also leveraged its partnership with the Bottles app to launch their “Grocery Essentials” same day delivery service. This was done within days of the lockdown being announced and they now pick from over 95 stores across the country. This extended reach has helped Pick n Pay deliver to areas previously outside its delivery network, such as Port Elizabeth, Soweto and Diepkloof.

Knight explains the trends they have seen with customers using their online delivery options during lockdown. “Our average PnP online shop customer will place a larger order through our website and these are usually weekly or monthly shops to restock core grocery items, and cleaning or hygiene products. Our ‘on demand’ customers, placing orders through the Bottles app, generally shop more frequently and use the same-day delivery to top up on essential items and fresh produce.”

Many of Pick n Pay’s franchise stores are still offering ‘Click Direct’ which encourages customers to email or WhatsApp their orders directly to the store, for collection or delivery.

By Nomzamo Radebe, CEO of Excellerate JHI

There can be no doubt that digital processes and technology will underpin future retail, but what does this really mean for local brands and companies? Arguably, the first step towards future-proofing retail is to understand what the customer of the future looks like.

Today, with endless information at their fingertips, consumers are well informed, demanding, and in a rush. And while many ‘gurus’ have foretold the death of the brick and mortar store, consumers continue to go to malls for both shopping and entertainment. Essentially, retailers and property development partners have to balance out contradictory messages and trends: are they preparing for a digitally driven environment with e-commerce at the centre? Or must retailers find a way to merge hyper-connected, digital habits with physical shopping experiences?

Seamlessly connected, 24/7

As of 2017, there were 3.4 billion global Internet users, which equates to 46% of the population, according to Euromonitor. By 2022, that figure will reach 58%. Along with more people becoming connected, more ‘things’ will become connected – with devices of all kinds constantly generating and sharing data. Yes, this is the Internet of Things (IoT), which will become fundamental to individual lives and purchasing habits. In homes, connected fridges will automatically send notifications when certain things are running low – and may even send a grocery list directly to the owner’s device.

For retailers, the rise of the Internet of Things and overall hyper connectivity means that consumers will be very specific in what they are looking for – and will demand that the retail experience deliver on their needs both seamlessly and instantaneously. Retailers will have to harness technology, including IoT, to create a ‘friction-free’ environment. For instance, the use of chatbots can make sure that when consumers are online they receive immediate and data-driven feedback or help.

Embracing cash-free living

With the enormous popularity of cash-free or cashless services such as Uber and Lyft, even credit and debit cards are beginning to look obsolete. Already, some analysts are forecasting the shift towards an entirely cashless society – and consumers are increasingly demonstrating their keenness to ditch cash. In South Africa, many are already leaving their wallets at home as smartphones become the new [digital] wallet. According to a study by PayPal, 85% of respondents used their mobile phones to make a purchase in 2017, and 46% said being able to shop on their mobile phones has made them buy more. Tellingly, the majority of South Africans would rather leave home without their wallets than leave home without their beloved device.

Conscious living, conscious shopping

With dramatic climate change now firmly on the global agenda, consumers are becoming increasingly aware of their environmental impact – which includes their shopping habits. According to research firm J. Walter Thompson Intelligence, ‘consumers expect brands to be sustainable and are willing to pay more to support those that are.’ In a 2018 study titled New Sustainability, the firm stated that 89% of those surveyed ‘care personally’ about protecting the planet; 92% said they are trying to live more sustainably, while 83% would always pick the brand that has a better record of sustainability.

With digital transformation now becoming a global business imperative, local retailers will have to ensure that their digital strategies closely reflect the evolving needs – and values – of their customers.

The true cost of customers’ online experiences

By Charlie Stewart for Roger Wilco

By 2021, over 20-million South Africans will shop online. This is a third of the country’s population. But, while the commercial opportunity is obvious – currently eCommerce accounts for R14-billion of the total retail pie, or 1,4% – local brands aren’t taking full advantage. So reveals The Cost of Online CX: A R34-billion Opportunity, 2019 South African Digital Customer Experience Report. Commissioned by performance marketing agency, Rogerwilco, it was released today.

Among key findings the study found that 71% of South African online shoppers abandon a purchase at the digital tillpoint. The commercial cost of this for local e-marketers is staggering accounting for a loss of around R34-billion* worth of goods per annum.

So what’s going wrong? According to online South Africans, payment failure is a big issue (57%), while site speed (38%), being unable to find what they are looking for (37%) and difficulty in navigating the site (27%) all impact the likelihood of an end sale.

“Brands are hell bent on brand building and client acquisition – at the detriment of conversion. I see brands throwing heaps of money to get people to their sites and then they spend less on creating an ideal environment when they get there. If they curb their acquisition budget and put it into the very fundamental elements to give it a better experience, they will convert more customers,” says Charlie Stewart, CEO of Rogerwilco.


Provide a helping hand – or bot

Customer service and support is also a big pain point, with over half of those surveyed saying that there is no-one to help them when they get stuck. “There needs to be an improved on-demand support for customers and also brands need to look at why customers need help to make online purchases in the first place – you shouldn’t need a support service if the experience works. What is failing in the customer journey that is causing customers to feel that they need support? This is a big red flag. Digital shouldn’t be a channel where you need customer service, it should be seamless self-service,” comments Julia Ahlfeldt, a Certified Customer Experience Professional.

Chatbots might well be the answer, although there are some misperceptions about what a chatbot is. “Businesses can address this by creating a persona that has some human traits which make it more relatable. Anything that can ease the journey is a good thing,” says Stewart. “Doing so can lead to a 30% saving in customer service costs. Furthermore, chatbots are bringing in the bacon; it is estimated that by 2023 retail sales via chatbots will account for $112-billion.”

Despite the commercial opportunity, bots aren’t every brand’s best friend, yet. “A percentage of our Customer Service queries can be solved using AI, but the majority can’t – highly personalised recommendations are an important part of our offering. Over time we intend to build a repository of information that will enable AI chatbots to deliver at a similar standard, but this is years away. Will a chatbot be able to talk a customer through the essentials for a summit of Kilimanjaro; it will take time before it can really understand customer needs,” comments Cape Union Mart’s Kia Abbott.

Better experiences = better returns

When brands do get it right, 44,5% of consumers report that they’ll spend more online. This also increases in relation to higher incomes; almost 60% of those who earn over R30 000 a month said they will buy more from a brand if the online experience is a good one.

“We consistently see that customers who have a seamless experience on our platform spend more money with us, so it makes clear commercial sense to continue to identify and remove points of friction. This can be as simple as enabling buyers to set up alerts so they are notified as soon as a product they’re looking for becomes available and having automated prompts that guide advertisers on how to categorise their products with tools that rate the quality of the images that accompany their ads,” comments Gumtree’s digital marketing manager Michael Walker.

Up against the best in the world

Notwithstanding site speed, good navigation and customer support, local brands are also being compared to international giants like Uber and Amazon, whose apps often sit side-by-side local brands. “Look at anyone’s mobile phone screen and it’s likely you’ll see local and international brands’ apps sitting side by side,” says ovatoyou’s Amanda Reekie. “Consumers dip in and out of these brands all day long, switching from Uber to News24 or Netflix to Takealot in milliseconds. And they expect a seamless experience across all of their apps; there is no differentiation in their minds between South African and global brands – they all need to work as well as each other.”

To overcome this brands must invest more in their apps’ usability to make sure that the experience is intuitive and not only be as good as their nearest competitor but as good as Uber.

Face to face

While banking online or via an app is the most common reason why consumers are online in the first place, with 85% of the sample reporting they use the platform for this reason, not everything can be fulfilled online; consumers still want a degree of physical contact, especially with financial services.

“When considering our customer journey, across income groups, consumers prefer to engage with us through human-manned channels. They’re comfortable with searching for information in the first part of their journey, when looking for options to meet their needs, however when they get to the buying phase they seem to be hesitant to make that in a digital environment and they want to fulfil the buying decision in a human environment, such as a call centre or face to face. This is a nuance of financial services as people tend to like human touch points,” comments a CX expert from a leading insurance provider.

Reinforcing this preference for a human over machine, 37% of those surveyed said it’s easier to go into a store or a bank branch.

Vicious venting

If customers don’t get what they want online, they are very quick to bad mouth a brand: a whopping 99% of consumers said they would tell friends and family about their ordeals. “In a world where people rely more and more on advice and recommendations from friends and family – and that then influences them as to where they spend their money – these experiences are more powerful than above the line marketing; you believe your friend over an ad. For existing brands, if there are negative experiences out there it just piles onto the brand. People still talk about experiences that happened years ago; it’s hurting you today and will hurt you tomorrow. On the other hand, those that had a good experience leads to a repurchase (44,5%). I think that if brands can look at this and understand this, that if I deliver a good experience, then 44% will spend more and recommend to friends and family, what is the knock-on effect of this? Bad experiences are the silent killer; you don’t feel the pain until it’s too late,” says Ahlfeldt.

Getting it right

While there are no quick fixes, brands that have online platforms, can and should address common consumer challenges. “Given the rate at which South Africans are coming online and using the digital platform to engage with and buy from brands, businesses should be investing far more than the average 10 – 24% of their marketing budget on their sites, to prevent them throwing billions of Rands down the drain thanks to high incidences of shopping cart abandonment!
“Site speed, good UX, offering customer support and making sure products are available online are all relatively easy things that brands can do to improve their customers’ experience and which when implemented will significantly increase consumer loyalty, return visits and ultimately sales.”

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My Office News Ⓒ 2017 - Designed by A Collective


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