Online business and bricks-and-mortar businesses, once considered enemies, are finding that sound business strategy remains the common denominator for success, says McCarthy CE, Brand Pretorius.
Speaking at an Ernst and Young-hosted panel discussion on e-commerce at the Gordon Institute of Business Science on 16 May, Pretorius said his company sees the McCarthy Call-a-car e-commerce venture as complementary to the traditional dealership business.
"With 1 100 physical outlets and an R8 billion turnover, it was obvious we had a working business model. Our main problem was to avoid disempowering the outlets and dealers, but we couldn`t afford to ignore the new economy."
According to Pretorius, McCarthy management realised that cyber shopping will become mainstream retailing in the near future, and decided it was time for the company to break out of the geographical boundaries that the bricks-and-mortar outlets had imposed.
"We realised we had to adopt a business model that was appropriate to the new millennium and that is why, when we approached our shareholders, they immediately agreed to back the e-commerce initiative."
McCarthy decided to initiate the call-a-car e-commerce site offering only its used cars, as higher profit margins are earned on used cars as opposed to the new car trade. This meant that if sales volumes on the site were low, there would still be sufficient profit generated to make the business viable.
The Web site operates using call centres to complement the fully enabled e-commerce facilities. Pretorius believes it will be a long while before customers are ready to do away with human interface completely, especially for a large purchase such as a motor vehicle.
"At the moment we are selling in the order of 450 cars a month, with a R70 000 profit."
Pretorius said South Africans are becoming more comfortable with making major purchases on the Net. Currently 30% of call-a-car Internet sales leads are closed compared to 10% through the call centre.
McCarthy is investigating other avenues of e-commerce and has launched MegaShopper.co.za, an online supermarket. While not yet in the black, the venture is receiving McCarthy`s full backing.
Ernst and Young has a series of panel discussions planned. The next discussion is titled "eValuation of companies in the new economy". The event is expected to take place on 27 June at the Gordon Institute of Business Science.
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