An e-business model developed by Business Systems Group (BSG) Africa is expected to open new delivery channels to manufacturers of high-end technology and entertainment products, and at the same time, lower the barrier to purchase for consumers.
Implemented by a virtual fulfillment company called The Virtual Pipeline, the initiative has been live since late October, and has already been used to leverage several marketing promotions run by clients such as Packard Bell, Mustek, JVC, CNA, Relyant and Clicks.
The new model is believed to be the first of its kind in SA, and its proponents say, streamlines all aspects of purchasing, financing, delivery, installation and service attached to the big-ticket items such as technology and luxury products.
Bruce Reinders, MD of The Virtual Pipeline, comments: "By bringing together a series of outsource partners to provide a total solution, the initiative addresses issues important to the South African consumer, including affordability, timeous delivery and installation/set-up."
Reinders points out a key differentiator of The Virtual Pipeline as being its browser-based tracking system, and customer relationship management software which links all parties involved in the transactional process.
This includes on- and off-line points-of-order, financiers, insurance and shipping agents, installers and technical support providers. By using Internet technology to integrate the process, all parties know what is happening both up and down the fulfillment chain.
Greg Reis, MD of BSG (Africa), explains that while the process is for the most part automated, there is always a "pipeline operator" in the background, facilitating transactions and ensuring smooth operation.
"We`re trying to make consumers feel comfortable about purchasing big ticket items online. The ability to validate credit applications almost instantaneously means we can now also take e-commerce to lower income groups."
An advantage to this model, says Reis, is that a consumer could complete part of the application online, and then pop down to the nearest retail outlet to inspect the goods, and complete the transaction in-store. Another upside is that it includes vendors which traditionally could not be part of a business-to-business/business-to-consumer commerce model, he says.
The system was developed around core components provided by BSG (Africa) partner, Silknet. The project began in February, with a team of four developing the system architecture between May and September. Reis notes: "We were able to ensure rapid implementation, because we leveraged off good architecture technology. What we have is a lot of software components, which we can configure to certain business rules, meaning we could get to market quickly."
This flexibility extends to the generation of up-to-date consumer demographics on the fly. As of the end of November, Reis says, 32% of activity came from Gauteng, while the Eastern Cape and the North-West each generated 16% of consumer activity. KwaZulu-Natal consumers came in at 12%, while the Free State generated 5%, and the Western Cape and Mpumalanga, 4%.
Reis says BSG (Africa) is already in discussions to extend the product`s functionality into the short-term insurance market, and overseas.
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