SA telcos report gains in online shopping channels

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Local mobile network operators (MNOs) have reported significant traffic increase in their e-commerce channels, as the COVID-19 pandemic drives more consumers online.

During a year of enforced lockdowns and partial closure of physical stores, local MNOs have been accelerating their omni-channel initiatives with an aggressive e-commerce strategy that offers customers a range of mobile products and services, including mobile voice and data contracts, as well as fibre and LTE services.

MTN, Cell C, Telkom and Vodacom say they have made some gains in their online sales channels, which are less costly than stores and call centres, and allow more accurate consumer targeting than physical channels, while increasing safer shopping options for consumers.

The pandemic has prompted a record number of consumers across the globe to shop online, with research showing a 50% year-on-year increase in the 2020 holiday period.

Jacqui O’Sullivan, executive for corporate affairs at MTN South Africa, says from the announcement of SA’s first lockdown last year, MTN saw online traffic only previously seen during the Black Friday promotional periods.

The increase in data consumption has also been a strong contributor to the increased sales on MTN’s online retail channels, she notes.

“Traffic behaviour and patterns have changed since lockdown, so we are now seeing new trends emerge. The usage of the MTN app has steadily grown over the last 10 months, with an increase of recharges between 100% and 200% over the start of the lockdown period last year.

“On a year-on-year comparison, we have seen traffic volumes almost double to our Web site. At the beginning of the lockdown period, we saw the highest number of customers applying for new contracts and upgrades during the months of April and May 2020.”

Besides purchasing airtime and accessing personalised bundle offers, customers have been using the MTN app for more service-related items such as querying their usage details, viewing and paying their bills, and redeeming their MTN YellowBucks loyalty points, notes O’Sullivan.

In terms of the usage of the MTN Mobile Money (MoMo) platform, the telco says it has seen huge success, with the app now exceeding two million active users.

“Most customers use the MoMo app to purchase data and airtime, DSTV subscription payments, playing Lotto, and car licence disk renewal. Although our online retail channels experienced growth since the beginning of lockdown, our physical retail outlets are still experiencing good customer interaction.”

Vodacom says since introducing its new ‘phygital’ strategy, to respond to evolving customer needs during the lockdown, it has seen growth across the My Vodacom app, the Vodacom Web site, as well as other self-service channels such as the *135# USSD string.

“With the closure of our stores, we saw an initial increase in online sales by 50%, but as the restrictions were eased, we saw normalisation in the ‘softer’ phases of lockdown. Our focus on unassisted journeys enabled customers to shop online at their convenience, despite the telesales environment facing challenges during the earlier phases of lockdown,” says a Vodacom spokesperson.

Mid-last year, Vodacom introduced Digital Express stores which offer services that are convenient, simple and paperless. The express physical units, launched as a pilot, were strategically located to ensure brand presence within shopping centres.

“We’ve seen an increasing trend of customers moving fluidly between channels, which is supported by our investment into and continuous focus on our digital, retail and contact centre transformation. Omni-channel is at the core of our distribution strategy and Digital Express stores were in response to the shift within the digital and physical channels, giving birth to our ‘phygital’ model.”

Physical still dominates

The Road to Digital report notes that globally there is evident disconnect between telcos’ digital strategies and physical retail strategies, with over 70% of operators worldwide saying they still generate revenue predominantly from physical stores and call centres.

Cell C says it is working on a strategy that will see the Cell C store of the future being based on a hybrid model, as it looks to further invest in its omni-channel approach.

“Cell C has seen a significant increase in online activity, with a 23% sales increase on the mobile app and 31% increase on the Web site. The positive shift to online shopping has been especially evident in in our SIM-only propositions, which have been in greater demand from customers,” says a Cell C spokesperson.

Telkom says in addition to offering its mobile products and services via its Web site, the telco also enabled its dealers on the ground to sell fibre services digitally, as opposed to signing up customers on the streets and at their homes, as they have done in the past.

“Online shopping has been a preferred method of shopping for many of our customers, which has been amplified by the rise of the COVID-19 pandemic over the past year in particular, and safety and security has been a key driver for doing business with customers,” says Bradley Pillay, Telkom spokesperson.

“In addition, Telkom recently partnered with Takealot to make our prepaid data bundles more accessible.”

Telkom is focusing on improving and optimising the user experience on its Web site in order to grow customers, build better customer journeys and better optimise its channels, adds Pillay.

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