McCarthy Retail is to shift focus to its core businesses - McCarthy Motor Holdings, McCarthy Financial Services and McCarthy On-Line.
At a press briefing yesterday, group CEO Brand Pretorius explained that the poor performance of Bonus Building Supplies and the Retail Apparel Group, other businesses within the McCarthy stable, had adversely affected the group`s overall performance in the previous year.
"It has turned a blue chip company into sort of a slap chip," Pretorius quipped.
The announcement followed a cautionary notice of capital restructuring of McCarthy Retail Limited.
Key strategy
A key issue is that of the increasing the significance of McCarthy On-Line (MOL) in McCarthy Retail`s multi-channel market strategy.
[VIDEO]Pretorius commented that MOL gives the group access to new markets and customers, and managed e-tailing as a fully integrated channel. The division also handles e-procurement, and Pretorius believes, is transforming other elements of the business.
He cited the example of the Call-A-Car division, which sells new and used cars via the Internet and call centre operations. It boasted a record profit of R168 million last year - a performance boost thanks in part to incremental effort through MOL. The operation will be expanded this year, through a programme of franchising in non-metro areas. The boost is expected to double Call-A-Car`s vehicle stock database.
It has also developed its dealer network, conducting trial operations with 10 non-McCarthy dealers.
"There is absolutely no doubt that Call-A-Car`s customer base is shifting towards the Web. In July 2000, Call-A-Car closed 90 Internet deals - by November last year this number had increased to 250. Currently, between 40% and 50% of all Call-A-Car deals are done on the Internet. This was less than 5% three years ago when we launched Call-A-Car," said MOL MD, Lourens Botha.
Mega changes for MegaShopper
Another major change in the MOL division relates to its business-to-consumer online shopping site, MegaShopper.
[VIDEO]"MegaShopper is performing above expectations in a South African e-commerce market that is very small and hampered by bandwidth limitations. It has got a 20 000-strong database and 1 000 regular shoppers with over 15 000 products available. Its average basket size comes to R575 and, after only 18 months of operation, it has reached profitability," reported Botha.
Recently MegaShopper was awarded the Spar e-commerce contract, which gives it access to one of the biggest retail networks in SA. The e-tailer will soon offer one-click grocery purchasing on a national basis. The resultant brand - Spar Online - will be launched later this year.
Convergence rules
Another industry trend is that of convergence of technology platforms - something which Botha terms u-commerce - commerce that is ubiquitous and unbounded; not constrained by lines and hardware
"U-business is the core future business strategy. We are seeing a convergence of marketing and sales strategies and customer retention - if you don`t have an integrated approach, you`re dead. You can`t have these various departments working in isolation. Thanks to u-commerce and digital addresses, you can communicate with that customer for life. The various u-commerce platforms - call centres, Web sites, customer databases, mobile communications and brand equity - are all ingredients of the future u-commerce business strategy."
Until the telecommunications sector is deregulated and competition introduced, said Botha, Internet connectivity will remain limited - at least for another two years. In the mean time, however, he believes a key customer relationship marketing tool will be SMS. "It completes the electronic marketing loop. In terms of this tool, the customer can be accessed 24-hours-a-day, seven-days-a-week. It`s flexible too, in that the customers can asked to be SMS`d when, for instance, McCarthy On-Line has a special on a specific vehicle."
[VIDEO]The emphasis now, said Botha, is on the e-enablement of corporates. "Through its division Eliance, McCarthy On-Line assists corporates in entering the e-business world.
In the business-to-business space, MOL will capitalise on Procuretrade, a joint venture with the AST group. The joint venture facilitates e-procurement through an application service provider interface, and has recently signed Iscor, which holds a 10% stake, Engen and BarloWorld.
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