Ernst & Young`s Global Online Retailing survey found that PC and Internet penetration is increasing, that more and bigger purchases are being made online, and that both consumers and retailers love the Internet channel. Books, CDs and computer equipment are the top online sellers and Amazon.com is the best-known brand.
The report also reveals some less clich'ed trends. Consumers are prone to online impulse buys, are not really concerned about credit card security but rather about shipping costs, and very infrequently access e-commerce sites from banner advertising.
Ernst & Young (E&Y) questioned 3 900 consumers and 28 companies in the US, Australia, Canada, France, Italy and the UK in a survey sponsored by the American National Retail Federation.
"Unplanned purchases are a phenomenon which companies have to take advantage of," says local E&Y partner Reeza Isaacs. "It is something they are battling with."
Canadian shoppers said 18% of their online purchases were impulsive, Americans and Italians followed closely at 16% and 15% respectively, and in France, Australia and the UK 10% of purchases were on impulse. The challenge, the company says, is to lure unplanned purchases from customers by enticing them to browse ever deeper into the site.
When asked what their wish list for Web sites are, few consumers cited total credit card security. The exceptions were Australia and Italy, where 50% and 40% respectively expressed security concerns. Far more complained of high shipping costs associated with e-commerce, with only Australians indicating shipping is not a major expense. Fewer consumers also say touch-and-feel and perishable items are inappropriate online.
"This list looks very different to what it was a year ago," Isaacs says. E&Y concedes that South African consumers may have different priorities, but is recommending that retailers quickly find a way to lower and build shipping costs into the price of their product.
From the company perspective, E&Y principal consultant Robert Harreman points out that 28% of respondent companies use online ads as traffic drivers, but only 19% of American shoppers and 4% of Australians often access sites by clicking through a banner ad. By far the largest percentages access sites from a favourites list or key in a known site address. Malls, comparative engines and unsolicited e-mail did not rank well.
E-tailers said brand awareness is crucial to their success, as is experience and first move advantage. Price and shipping, which consumers rated as their main problems, were not listed as success criteria.
Harreman sees in the survey results a window of opportunity for South African companies. Only 8% of the companies polled said international expansion would form part of their future growth plans. Locking in their home markets by acquiring new customers and expanding into new categories and channels were found to be more important. International sales represented only 5% to 25% of revenues, and the respondents confessed to logistical problems standing in the way of international business.
"There is still time for South African companies," Harreman says. "Not a lot of e-tailers see Africa as a market for them. US companies will work locally and then turn to Europe first."
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