This holiday season promises to be a good one for the online retailers that managed to ride out 2001`s market turbulence.
The factors boosting the trend towards online shopping, say industry insiders, include the fact that local e-tailers have overcome their teething problems and have significantly improved their offerings and services, and the fact that South Africans are growing increasingly comfortable with the online environment.
Last year saw more South Africans shopping online than ever before, and this trend looks set to continue this year.
In addition, consumers appear to be in a shopping mood this season. Earlier this month, a retail survey released by the local Bureau for Economic Research and sponsored by business advisory firm Ernst & Young, indicated that in general, retailers expect sales of food, beverages, household furniture, appliances and electronic equipment - which includes PCs and computer peripherals - to be buoyant over the festive season. The retailers said the slump in retail business conditions appeared to be coming to an end.
Providing an indication of overall online shopping trends, online retailer Kalahari.net says it has already doubled its turnover over last year`s festive shopping season. Marketing manager Gary Hadfield says the online retailer traditionally regards November as its peak holiday shopping season.
"We saw exceptional growth last month over the previous year." Hadfield says that in addition to new customers coming aboard, many existing customers returned to make multiple purchases, spending more than they did previously. The site`s new gifting service, offering delivery of wrapped gifts with personalised cards, proved to be a major drawcard for consumers. Extensive advertising, book promotions and a free delivery offer also spurred sales.
Hadfield adds: "People are becoming more comfortable shopping online. They now have several payment options to choose from if they don`t have or don`t want credit cards, and they are coming to appreciate the convenience and competitive pricing they get through shopping with us."
Digital Mall said earlier this year that it was seeing evidence that South Africans are increasingly confident about shopping online, even though only 10% to 15% of the South Africans who have Internet access currently shop online. Digital Mall financial director Meir Gonen said sales were picking up as the year drew to a close, and expressed confidence that this festive season would be profitable.
CEO Yaron Assabi says Digital Mall is seeing a retailer-specific improvement in sales of between 20% and 30% over last year. The mall itself is seeing far greater increases because it has additional sites with larger product ranges this year. Assabi says toys, books, DVDs and other gifts are selling particularly well, with a lot of orders placed by expatriate South Africans sending gifts to friends and family in SA.
"Importantly, we are seeing the same customers coming back, with an average 62% repeat purchase ratio within 60 days, across the board," he says. "These customers also spend a lot more on subsequent purchases. It may be that having tested online shopping via Digital Mall, they discover that it works, and are then prepared to make bigger purchases."
A survey conducted by International Communications Research (ICR) also predicts that this festive season will be a highlight for e-tailers as speed, convenience and the ability to do comparison-shopping drives increasing numbers of consumers to do their Christmas shopping online. The ICR survey shows that 25% of global shoppers will shop online this festive season, with 25% planning to spend more than R3 000 online.
Eddie van Rensburg, GM of M-Web Business Solutions, says an analysis done by M-Web reveals that nearly 80% of shoppers visiting M-Web Shopping are male. It also revealed that a significant percentage (over 10%) of M-Web Shopping visitors are international shoppers (shop from international destinations), which Van Rensburg sees as being encouraging for the South African e-commerce industry.
"The analysis further revealed that Gauteng is still the most active e-buying province with nearly 50% of the M-Web buying base residing in this province. Western Cape is snapping at its heels with just over 20%," Van Rensburg says.
"Online shopping is a great solution for sending gifts to friends and family that are far away. Especially when a site offers shoppers the ability to split orders (sending gifts to different addresses from one purchase). Gift-wrapping, wish lists that can be sent to family members and gift cards are all value-added services that shoppers should look out for when shopping online this Christmas. Shoppers must also remember to do their shopping in advance to accommodate shipping and delivery cycles," Van Rensburg concluded.
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