A cross-section of local e-tailers last night discussed their experiences over the past festive season at First Tuesday Johannesburg, reaching the general consensus that better was still not good enough.
The panel, consisting of representatives from gift voucher site Streetcar.com, broad-based retailer Megashopper, big-brand aggregator Digitalmall.com, Wooltru retailer Inthebag.com, and coupon site Tutuka.com, agreed that the 2000 Christmas season treated e-commerce sites well, but identified consumer reticence and small product ranges as problems needing attention.
Digitalmall, Streetcar and Megashopper declared conversion rates of browsers to shoppers in the 6% to 9% region, while Tutuka.com said 35% of its sales for the year were conducted over the festive period. Megashopper, on the other hand, said Christmas was nothing special even though 85% of the month`s sales were done before 16 December.
Holding consumers` hands
Steven Frankel, co-founder of Streetcar, said his company did deliveries on Christmas day and the day before, trying to offset the inherent drawbacks of the Internet as a shopping medium.
"There is nobody to hold your hand in the online world as there is to guide you offline," he said. "That is why you need to go the extra mile."
Inthebag, only founded in November, said Christmas was a rude awakening, with consumer fears playing a large role. Marketing manager Amanda Reekie noted that 64% of visitors to the site are female, indicating that mainstream household shoppers and not tech-savvy Internet users form the bulk of users. And those users are worried about security.
"We need to hold their hands a little," she said. "Our call centre and even our drivers play a very important role."
She tells of drivers from the in-house delivery service being confronted by customers concerned about site and credit card security and "being grilled for hours".
Garin Toren, sales and marketing manager for Digitalmall, said 60% of first time buyers on the site require assistance through the call centre, which also acts as an independent sales channel, but that the 50 000 calls a month through the centre only means more work needs to be done.
"Taking an example from one of our merchants, it costs about R6 to do an order through the call centre. Over the Internet it costs 60c."
Product spread
Popular products over Christmas varied greatly from site to site, with Megashopper marketing manager Jan-Louis Pretorius reporting dog food, bread and long-life milk as best-selling items. Appliances and homeware also did well, contrary to seasonal expectations.
"Rather than buying gifts [customers] were taking the year-end bonus and buying something practical," he noted.
Inthebag also did not see gifts making a big impact, with 50% of sales consisting of foodstuffs from Woolworths. "In its biggest week, gifting represented only 15% of our sales for December," said Reekie.
This was despite having CDs and videos on offer, a fact Reekie ascribes to a small range.
"You just can`t compete with somebody like Amazon in this area. They have so much more on offer."
The spectre of Amazon also loomed large in the minds of other speakers.
"I think most of the sales from SA still go to Amazon.com," said Tutuka CEO Rowan Brewer. "Not bad for a company that has never spent a cent on marketing here."
Brewer likens e-tailers` statistics to Christmas presents under the tree. "It is very prettily wrapped and looks exciting, but when you open them you get a lot of socks."
He urged online retailers to look at sales figures and the number of returning customers rather than visitors who only browse or page impressions. And as in the offline world, value is paramount.
"We need to increase the value that we offer buyers and work out a viable way to compete with the real world," he said. "Then, hopefully, next year will look better."
Related stories:
E-Santa makes a killing (2000)
Twas the season to go (online) shopping (1999)
Record Christmas for SA e-commerce (1998)
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