SMEs
the product, and then go home and order it
at a lower price on Amazon,” he says. In an
effort to take advantage of this phenomenon,
even Amazon has announced that it’s going
to launch a physical store in Manhattan. As
much as Amazon epitomises eCommerce,
even it has recognised the trend towards
having an offline presence.
Other retailers have already taken the
plunge, and it’s a lesson to South African
eCommerce wannabes.
“Bonobos started as a pure online tailored
clothing company, and has now gone offline
too,” says Higgins. “Consumers go into a
physical store, get their measurements taken
and then order online, and can do so for as
long as their measurements don’t change. It’s
about giving buyers the chance to choose the
channel they want to use to interact with you
on. Some research online and buy offline,
for others it’s the other way around. But the
omni-channel movement is all about giving
people the option.”
The fallback excuse for many South
African online retailers has been the lack
of penetration of credit cards, or even bank
accounts. But Higgins says the tide is turning
because of a host of new payment options.
“Debit cards are becoming more prevalent,
but we’re even seeing that EFT still accounts
for about 30% of online transactions, which
is a more common and trusted method of
payment for South Africans,” he adds.
The Standard Bank-driven PayD system,
still in its infancy, allows consumers to pay
online with their ATM cards, while mobile
payment systems are also gaining traction in
the shape of Nedbank’s PocketPOS or ABSA’s
Payment Pebble solutions.
“We launched in Nigeria recently and the
most common payment method there is cash
on delivery (COD), and these mobile point
of sale (mPOS) systems are making it much
easier than giving cash,” says Higgins. “People
can still pay when they receive the goods
using a chip and PIN-type device, which is
affordable and accessible – and everyone
wins”.
Higgins’ advice for local retailers struggling
to find an online foothold is to specialise in
niche products and increase their customer
service. “For example, a smaller retailer
is never going to be able to compete with
massive retailers like the one set to be created
by the merger of Kalahari and Takealot.
They’ll sell, for example, a Samsung TV at
a wafer-thin margin and be able to back
it up with great customer service. What
we’re seeing in the international market is
that really successful, smaller online stores
<18
I have my favourite site
& almost always buy
from them
18-29
30-39
I am very price
sensitive & will buy
from the cheapest site
40-49
50-59 60+
I will buy from the cheapest
well-known site but not
from a site I have never
heard of before
eCommerce patterns in South Africa, gathered from surveying over 116 000 respondents during the 2014
South African eCommerce Awards.
have thrived through selling niche products
like their own fashion brands – something
unique. That way, they’re not competing with
the behemoths and can still use platforms like
bidorbuy to sell their items.”
uAfrica runs the annual South African
eCommerce Awards, which in 2014 saw usual
suspects like Kalahari, Zando, YuppieChef
and bidorbuy sweeping up the majority of
awards. Higgins says their customer service is
what sets them apart from other retailers, but
it’s not enough
for new entrants to the market to simply
focus on great service.
“That’s because it’s almost impossible
for newcomers to work on the kind of scale
that those companies do. The opportunity
remains in filling those niche areas and giving
themselves the chance to work
with the big retailers – rather than
against them,” says Higgins.
THERE ARE A LOT OF
GREAT TOOLS OUT
THERE THAT HELP
PEOPLE SET UP
ECOMMERCE STORES,
BUT THE CHALLENGE
FOR THEM IS TO GET
TRAFFIC TO THOSE
STORES TO ACTUALLY
MAKE SALES.
Edition 12 | BANKERSA
SME's.indd 31
31
2014/12/18 10:07 AM