According to Dirk Dijkstra, head of communications at Ensight, an international multi-channel marketing company, too many South African retailers are focused simply on having a functioning website as their sole point of contact, despite a recent report by PayU that 75% of local respondents actively participate in e-commerce.
“Currently, the approach is not about actively engaging with clients on multiple platforms, such as web, mobile and social media. Getting the e-retail model right locally, from a communications perspective, is key to the growth of the e-commerce sector.”
More needs to be done to engage consumers effectively to make e-retail a thriving sector, a source of employment and a viable alternative to traditional shopping.
He explains that South African consumers, of which over 8.5 million and 4.5 million use the Internet and Facebook respectively, are becoming increasingly savvy and, like their European counterparts, expect e-retailers to respond to their needs in a personalised manner across multiple channels. “No longer are they willing to tolerate scattershot, impersonal SMS and email communications that do not speak directly to their requirements, but look to retailers to provide them with information and offers that are relevant to their lives.”
High growth rates
According to research by Cisco Systems, global e-commerce, which includes online retail sales, will increase 13.5% annually over the next three years and reach an estimated $1.4 trillion in 2015. The research also estimates that while the US, UK and Japan will command more than 53% of e-commerce sales by 2015, countries such as Spain, Brazil, China, Russia and Mexico each will grow e-commerce at rates of 26% or more annually through 2015.
Dijkstra says that a thriving e-commerce sector will aid skills development in South Africa, as well as create more jobs to stimulate the economy. Christo Botes, Executive Director of Business Partners, a specialist risk finance company for SMEs echo this sentiment, saying that some of the company’s existing clients are thriving in the e-retail space, but the key to growth is finding a niche.
“For example, one of our clients is enjoying significant success with a virtual showroom model whereby he sells cars online. South Africa definitely has massive potential in the e-commerce arena which can potentially be a key driver for SME growth in the country going forward,” says Botes.
End 2011 stats reveal that the UK is currently Europe’s leading e-retail economy, with sales estimated to have reached £68.2 billion in 2011 and accounting for 17% of total retail sales in the UK. Sales via mobile devices in the UK have also grown from 0.4% of total e-retail sales to 5.3% in just two years.
“In 2011, more than 10% of all mobile Internet users in South Africa shopped online using their mobile phones and globally, it is estimated that 50% of online purchases originate from a combination of online search and social media content. These channels need to be embraced and utilised by local e-retailers, to improve the frequency of consumer engagements.”
Dijkstra advises that local e-retailers should adopt the mind-set of a physical retail store and treat consumers accordingly, by continually managing their expectations. “For example, some consumers have to currently wait over two weeks for a product to be delivered and their expectations during this process need to be managed via multiple communication channels.”
He says that myriad factors such as rising fuel costs and the introduction of Wi-Fi on-board domestic flights, creating captive audiences, all point to e-commerce becoming more of a viable option for consumers, if the right communication channels are utilised.
“Online shopping has become universal and anything that you can buy at a store can now be bought via e-retailers, from computers and clothes to groceries and cars. The list is endless, as is the potential for growth of South Africa’s e-commerce sector,” concludes Dijkstra.