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SA e-tailers focus on providing frictionless experiences

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 11 Feb 2022

South African online retailers have learned to meet the extra demands of the December holiday shopping season.

Ninety percent of surveyed companies say they coped with extra staffing demands and more than two-thirds say their technology could handle the increased traffic.

These were the key findings of the second phase of the Online Retail in South Africa 2021 study, conducted by World Wide Worx, with the support of Mastercard and Standard Bank.

The new research is based on telephonic interviews with 101 online retailers, focusing on success factors, challenges and outlook. The bulk of the project, released last year, interviewed 16 000 people and provided an in-depth analysis of the performance of major retailers.

The first phase of the study showed 66% total growth for online retail in SA in 2020, bringing the total of online retail in the country to R30.2 billion. The forecast for 2021 is 30% growth to R42 billion.

The single biggest challenge, according to the report, was managing customer queries and challenges, cited by just over half (53%) of respondents.

ITWeb previously reported that the e-commerce boom in SA, spurred by the COVID-19 pandemic, left many online retailers struggling to cope with the increased demand and disruptions to their supply chains.

Innovative technologies and business models have played a key role in enhancing retailer performance and the customer experience, and will continue to do so in future, says the report.

“The research was of particular significance due to the major glitches that bedevilled online shopping during peak times in recent years,” says Arthur Goldstuck, CEO of World Wide Worx and principal analyst on the project.

“The findings were encouraging, despite ongoing challenges like fulfilment disruption and inventory forecasting.”

The key success factors for most retailers were good customer service (98%) and a good user experience (90%). Quality of products came in third at 83% of respondents, while pricing came in sixth – cited by only 73% of respondents.

The Christmas holiday season remains the most important time of year for online retailers, with 73% of e-commerce players rating it as important, while 60% regard Black Friday as important to their sales.

In contrast, Valentine’s Day and Mother’s Day are regarded as important by only about a quarter of respondents, and back-to-school by fewer than one in five.

Retailers were upbeat in their turnover expectations in 2022, with more than a third of respondents expecting more than 60% growth, and well over half expecting more than 20% growth, notes the report.

This is in contrast to around half of respondents that anticipated less than 20% growth for 2021.

The report notes eight out of ten online retailers are already using parcel tracking, and a similar proportion are offering collection and return points − a trend that may feel like the norm to the online shopper today, but was almost unheard of only five years ago.

Just over half offer QR code scanning and this is expected to increase this year. Only one in five participants use artificial intelligence and this is not expected to increase by much in 2022, it notes.

“Consumers want frictionless, convenient check-out regardless of whether they check out online or on mobile,” says Gabriël Swanepoel, country manager at Mastercard, Southern Africa.

“When you consider cart abandonment rates nearing 70%, due to security concerns or often complicated checkout processes, the concept of frictionless quickly moves from a nice idea to a must-have. If friction can be removed, it should be removed.”

The study further found that online retailers were almost unanimously confident in the industry’s prospects. Nine in ten said they were very optimistic about growth in the online retail industry over the next five years, while 2% were neutral or pessimistic.

“The findings anticipate an economy emerging from the darkest shadows of the pandemic,” says Arno van der Howen, head of digital, e-commerce and housing platforms for consumer high net worth at Standard Bank.

“Consumers remain under pressure, but the retail sector is assisting by making the shopping experience and the payment process increasingly seamless.”

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