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Lockdown online shopping habits are here to stay

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The habits picked up by consumers during the COVID-19 pandemic, including online purchases and contactless payments, will stay for the long-term.

This is according to Colleen Harrison, head of marketing at PayFast, remarking on the second annual PayFast E-commerce Performance Index (PEP Index).

The PEP Index is based on payment data collected from the PayFast engine from 1 September 2020 to 31 August 2021, buyer data collected from the engine for the same period, an online survey with PayFast merchants in September 2021, as well as interviews with industry experts within the PayFast ecosystem, which were also done in September.

Over the course of 2020, SA’s retail industry adapted to constantly-changing lockdown restrictions, and ever-evolving customer experience requirements, notes PayFast.

“Despite a difficult year, 48% of merchants saw an increase in revenue, spurred on by a 50% increase in online sales. This highlights the importance of meeting customers where they are – online.”

Harrison says the online payment gateway’s findings show consumer habits won’t return to the old normal in terms online shopping. “A step change took place in May 2020, and this happened when online deliveries for non-essential goods were permitted after the hard-level lockdown in April.

“Even though the lockdown restrictions continue to ease, online payment volumes didn’t drop or return to pre-COVID levels. In May this year, we see volumes also indicate a pretty healthy year-on-year growth rate off a much higher new lockdown baseline.

“What we expect in 2021 is for the share of online retail to rise to 4%...which indicates a positive sign for businesses and consumers who are embracing digital transformation as their new norm.

“It really doesn’t matter whether it’s wearable tech, a phone, e-wallets and contactless payments, these are no longer a gimmick – they’ve actually made an impact in our day-to-day lives.”

According to Harrison, the most popular payment methods online continue to be card payments – this is where the cardholder types in their details or uses a token stored on a merchant’s website. Card payments account for 67.3% of payments via PayFast’s engine.

In addition, instant EFT is still popular, with just over a third (31.5%) of transactions conducted via this payment method.

Harrison says quick response (QR) code payments have managed to carve out a significant slice of PayFast’s payment method mix, with 3.5% of all payments being made with the scan-to-pay option.

While it might seem like QR code payments represent a small slice compared to the other payment methods, they almost tripled in the last 12 months, she notes.

“We saw a 178% increase in QR code payments, and a 55% growth in mobile usage for online shopping over 2021. This indicates the habits picked up by consumers during hard lockdown are here to stay,” says Harrison.

“This year’s index analyses the long-term impact of the pandemic on consumer behaviour, and offers extensive insight into the e-commerce landscape heading into 2022.”

In terms of the most popular devices used for online shopping, mobile still trumps the rest.

The survey found mobile usage for online shopping reached 64%, followed by desktop with 35% and tablet usage at 1%.

This, it states, indicates mobile usage for online shopping has grown by 55% year-on-year, compared to desktop, which has grown by 27%.

The index also shows 76% of businesses said they have optimised their e-commerce stores for mobile, with 56% of merchants saying they saw an increase in mobile shopping over 2021.

Furthermore, online shopping trends reveal Tuesday has become the most popular day for online transactions, with a 63% year-on-year increase in the number of online transactions on Tuesdays.

Online shopping also peaks between 9am and 1pm, the index notes.“The biggest year-on-year increase is between 5am and 7am, indicating more consumers are shopping before work in the morning.”

The PEP Index notes the top three regions for online shopping are Gauteng with 56%, Western Cape 24% and KwaZulu-Natal with 11%.

On the hand, the index shows social commerce is being recognised as a crucial tool for businesses’ growth.

Among PayFast’s merchants, 52% are already selling goods or services directly within a social media platform, and 70% make use of multi-vendor marketplaces. Of these, 92% use Facebook, 76% use Instagram and 6% use TikTok.

Also, 41% of merchants that do not currently use social commerce expect to do so within the next year.

“With the vaccine rollout under way and a return to business-as-usual on the horizon, 76% of our merchants are feeling positive about the year ahead – versus 63% at the start of 2021. Considering the rate of growth, innovation and digital adoption across the country, the future of SA’s e-commerce industry is something local businesses can be very excited about,” concludes Harrison.

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15 Aug
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