South African consumers spent R20 million at Internet retail sites during the 2000 holiday season, according to a survey conducted by Acuity Media Africa during the first half of January 2001.
More than 110 South African online retailers were included in Acuity`s Holiday 2000 E-commerce Retail Survey, which revealed that online retail had surpassed expectations by as much as 50% for the period 15 November to 24 December. Despite this, a number of established retailers experienced great disappointment.
"The big success stories came about as a result of careful attention to customer needs," says Arthur Goldstuck, MD of Acuity Media Africa, part of the JSE-listed Acuity group. "In the past year, sites like Kalahari.net and Digital Mall improved dramatically, and they reaped the rewards over the holiday season."
Total reported spending on retail sites came to R20 657 176, which made up 24.5% of the year`s online retail spending. Online retail spending for the year came to more than R80 million, double the original projection of R40 million. Holiday season online sales had been forecast to reach around R14 million for the retail sector.
This, however, still represents a small proportion of the year`s total of around R5 billion in all online consumer spending. The retail figures exclude big-ticket items like houses and property, as well as online investment and travel purchases. It represents an even tinier proportion of all traditional retail spending, which amounted to about R200 billion for 2000.
As an example of the long hill that online retail still needs to climb, one single online car dealer, McCarthy Call-a-car, achieved double the total turnover achieved by the general online retail sites. In the business-to-business space, Massmart alone saw online sales of R48-million during the holiday period, while its online business-to- business sales for the year, R238 million, dwarfs the total for online retail consumer spend.
Leading brands in the traditional retail space had been expected to dominate South Africa`s "e-Christmas", but made little impact.
"The big names arrived on the Web with a splash towards the end of the year, but they made strategic errors which prevented them from taking the lead in online retail," says Goldstuck. "Failure to integrate their web presence with in-store marketing was the most obvious flaw at Edgars and Woolworths. The likes of Musica and bluebean.com may have integrated web site marketing into their overall marketing strategies, but they lost the impetus due to poor navigation on their sites.
"What all these brands did achieve, however, was a dramatic increase in awareness of online shopping, and that benefited those retailers that had got the customer focus and site navigation right."
The holiday season online retail market was so small in 1999, that sites were able to report an average increase in sales for the holiday period of 645%.
The top ten individual sites in holiday season sales were, in alphabetical order, African Cellular, Cybercellar, Digital Planet, Incredible Connection, Kalahari.net, Megashopper, NetFlorist, Shoppingmatrix.com, StopQ, and Streetcar.com.
The leading payment gateway was ECNet, representing several dozen online retailers, while the leading online mall, comprising a number of stores, was Digital Mall.
The research excluded auction sites, which will be polled in a separate survey.
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