Online shopping is here to stay and set to grow – substantially. According to research by Euromonitor International, online sales in South Africa will grow almost three times as fast as in-store sales in the period 2018-2023.
“Evidence from South Africa, as well as other countries, shows key behaviours,” explains Jonathan McCabe, products management consulting lead for Accenture in Africa. “Consumers are not returning to physical stores in the same numbers despite the easing of lockdown restrictions. They are consolidating shopping engagements and purchasing larger baskets both online and in-store. Consumers who had the resources and ability but limited desire to shop online were forced to try the channel, and a high proportion will continue to buy online.”
McCabe cautions that the challenge is that this channel is more costly for retailers, with overall profitability under pressure. “The ecommerce costs are largely incremental to the existing operational costs of physical retail. On the positive side, the online opportunity for retailers is to capture more of the customer’s total basket, as a result of this shift.”
McCabe recommends that retailers consider that not all capabilities need to be built internally. “Look for ecosystem partners that can rapidly deliver capabilities to a retailer. Average order value (AOV) is critical to retailers’ online strategies. Because online costs are higher, fulfilling orders with low AOV presents a significant challenge, best served by organisations with the scale to absorb these costs.”
The quickest route to market
Louw van Riet, owner and director of eCommerce Development South Africa and Canada, says it has never been easier to start an online business. “All one needs is an internet connection and laptop. You could start the journey on your own or use a company to guide the process.”
If going solo there are free resources such as blogs, local Facebook groups and YouTube channels that explain the process in detail. Van Riet proposes consulting a company with extensive experience in the sector, as they will know what works best for a unique product or service.
The next step is selecting a viable platform. “Shopify, WooCommerce and Ecwid are probably some of the best known,” says Van Riet. “We recommend Shopify for our customers because of the advantages associated with a hosted platform – 24/7 live chat, email, and phone support help when new to the space. Agencies also recommend WooCommerce as it does not include a per-transaction fee and the hosting might seem cheaper. Our experience is that this is not always the case.”
Door to door
Online businesses can benefit from collaboration regarding delivery services. “uAfrica developed an app that integrates with your Shopify store and allows order information to be sent to their system,” says Van Riet. “This generates quotes from courier companies and streamlines delivery immensely. ScrubBill can ship from multiple locations and only costs R5 per waybill. Pargo has partnered with an extensive network of physical locations that customers can choose as pickup points; this is especially popular in rural towns where shipping costs tend to be higher.”
eCommerce Development SA is doing significant work in the B2B sector, adds Van Riet. “Wholesale customers are starting to expect the same level of service and user experience as retail shoppers, including browsing a product catalogue. There are also big changes in how sales reps operate. They can be integrated into an online store and businesses can track sales per representative.”