This week`s unbundling of Tanua Holdings has again raised the question of whether online shopping is a viable prospect in the current SA market. However, online retail specialists believe e-commerce has a future in SA.
Standard Bank`s consumer Web site, bluebean.com, which announced this week that it had ended its online shopping partnership with Tanua, is still positive about the future of online retail. Bluebean CEO Dave Parratt says that while the relationship with Tanua has ended, the company`s involvement in bluebean.com saw more than R6.4 million in sales notched up in only three months.
Parratt says turnover exceeded expectations and reaffirmed bluebean`s confidence in the growing trend towards online shopping.
"While shopping is not core to bluebean`s offering, our customers expect to have this facility on our site, and we will continue to offer it." Parratt points out that South Africans have been relatively slow to adapt to online shopping because the country does not have a background of mail order catalogues and remote shopping.
However, bluebean`s initial strategic plans forecast that Christmas 2001 would be the real start of major online retail in SA, and Parratt still expects this to be the case. "The major retailers now have their back-ends right, and consumers are becoming more accustomed to the idea of online shopping."
Meir Gonen, financial director of digitalmall.com, which provides outsourced Internet retail, call centre facilities and CRM to retailers, says online shopping is showing definite growth in SA. Gonen says South Africans are growing increasingly confident about shopping online, even though only 10% to 15% of the two million South Africans who have Internet access currently shop online.
Gonen says December holiday sales via digitalmall.com are already picking up, and he is confident this festive season will be a profitable one.
Proving that local retailers haven`t lost faith in e-commerce, digitalmall.com is currently adding sites for CNA and the Reliant Group (Sleep City, Furniture City and Appliance City) to its offering. These sites will go live later this month.
Gonen feels other online retailers have failed because their approach to introducing business-to-consumer (B2C) offerings has been wrong. In the case of those with only an online offering, customers may feel unsure about whether their purchase will be backed by any guarantees or follow-up service. In existing retailers taking their offerings online, the implementation costs of e-commerce infrastructure can prove crippling.
"One advantage to a service such as digitalmall is that we have already put the expensive e-commerce infrastructures in place, lowering the barriers to entry for retailers," Gonen points out. "So the retailer faces far less risk and expense."
Gonen adds that having an online presence does more for a retailer than just selling goods over the Internet. "It also serves as a customer service and marketing tool," he says. A service such as digitalmall.com also processes large numbers of telephone orders for customers who do not have Internet access. This too, is proving highly popular in SA.
Parratt concludes that bluebean`s online retail success in partnership with Tanua could be attributed to an acute understanding of what works in online retailing, as well as of customer needs and behaviour.
Combining traditional and online shopping environments, together with a dedicated call centre, appears to be the best way to go. In addition, quick turnaround on orders and secure payment methods - including the option of paying with something other than a credit card - also improve a retailer`s chances of success in the online B2C sector, says Parratt.
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