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South Africa’s e-tailers cash in amid lockdown restrictions

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COVID-19 has accelerated South Africa’s use of the Internet to find information and engage with brands.

This is according to the 2020 South African Digital Customer Experience Report compiled by marketing agency Rogerwilco.

The survey, carried out during COVID-19 lockdown across SA last month, interviewed 2 000 respondents about their e-commerce experiences. Insights range from online behaviours, fears, payment and delivery issues, and ultimately what consumers are looking for from their online experiences.

The study’s key findings have been supported by qualitative interviews with experts in the South African customer experience and marketing fields.

Charlie Stewart, Rogerwilco’s chief executive, comments that despite government’s decision to ban online shopping for all but essential purchases under level five lockdown, e-commerce has received a shot in the arm with large numbers of consumers making online purchases for the first time.

According to the study, 61% of respondents cited social distancing as a driver for going online. This indicates these consumers were likely to increase their online engagement or e-commerce spending in the future, Stewart says.

Rahul Jain, co-founder of Peach Payments, who participated in the study, reports that his business saw new merchant acquisition increase by 400% in March and April, with the vast majority of his new customers being SMEs that pivoted their business models to launch e-commerce plays.

Biggest winners

Rogerwilco notes the big online category winners were grocery shopping, health and fitness, and education.

It points out that while less than a third (31%) of interviewees had bought groceries online before the pandemic, 15% did so for the first time under lockdown, and 22% said they would make greater use of digital channels to purchase their groceries in the future, despite many of the sample citing limited (and expensive) delivery options, items being out of stock, slow Web sites/apps, issues with payment processing and a lack of online support.

Charlie Stewart, Rogerwilco chief executive.
Charlie Stewart, Rogerwilco chief executive.

Another participant, Vutlharhi Valoyi, CEO of Zulzi, an on-demand delivery app, believes groceries will play a critical role in driving the growth of e-commerce in SA.

“We have seen growth of over 500% during the lockdown and we have maintained the growth even as restrictions eased,” Valoyi notes.

He maintains that provided retailers satisfy customers by working hard on stock levels and delivery windows, the industry will continue to see accelerated adoption of online grocery shopping.

This sentiment is echoed by Sam Wilson-Späth, head of digital at Woolworths, whose company also experienced phenomenal growth in online shopping during lockdown, particularly in the foods area.

“Demand was so high that we launched a ‘Click n Collect’ option across the country to facilitate the huge demand for new delivery slots. This was a project that had been on our roadmap for a while, but lockdown made it an urgent priority…and was rolled out in three weeks,” she says.

Some 42% of the sample reported they had used Web sites or apps to improve their health or fitness before COVID-19 reached South African shores, 15% reported doing so for the first time during the pandemic and 21% said they would use online more for health and fitness-related activities in the future.

The study also says while the major of gyms were quick to add online workouts, consumers also flocked to YouTube and specialist fitness Web sites.

Online Trends 2020 Digital CX report. (Source: Rogerwilco)
Online Trends 2020 Digital CX report. (Source: Rogerwilco)

Taking time to learn

Online education also saw a boost, with 41% saying they had studied online prior to the coronavirus outbreak.

A further 13% took advantage of the lockdown to study online for the first time since lockdown, with 21% indicating they would do so more in the future.

The report also found that platforms like LinkedIn saw a surge in members posting short course certificates, as people sought to update or add to their vocational qualifications.

“Existing behaviours, such as online banking, have been entrenched under lockdown, with more than a quarter of those polled (27%) stating they will make greater use of online and app-based banking solutions in the future (73% already bank online),” Stewart says.

A quarter of respondents said they would increase their frequency of general (non-grocery) shopping (57% had shopped online prior to COVID-19).

In comparison, 26% will step up their use of the Internet to find new products or services and compare pricing (69% had done so before).

Preferred communication channel, 2020 Digital CX report. (Source: Rogerwilco)
Preferred communication channel, 2020 Digital CX report. (Source: Rogerwilco)

Trusting consistent service

However, the report also points out that South African consumers have made it extremely clear that poor experiences erode online’s primary benefit – that of convenience.

Of those who had abandoned an online purchase, 60% claimed to have switched to a rival retailer’s Web site because it made it easier for them to buy the product they wanted, even if it was more expensive than their first choice e-tailer.

It notes that household income had no bearing on this, with lower earners just as likely to place a premium on the quality of experience as their wealthier counterparts.

However, a skew was seen with gender and age. Men were more inclined to pay more for good service than women, as were those in the 25 to 34 year age bracket.

Michael Walker, head of marketing at Gumtree, cites his own company’s research into its top-selling merchants. “Our data shows the most successful rarely have the best priced product – what they do have though is an ability to fulfil buyers’ needs and to deliver a superior sales experience.”

At Cape Union Mart, Kia Abbott notes that while first time customers might select based on price, keeping customers loyal in the long run will depend on the quality of the shopping experience.

But this is no easy task: “Delivering a consistently excellent experience, at scale, across a complex value chain, is easier said than done – and getting the business processes to back the promise requires a company-wide commitment that extends far beyond the marketing department.”

Online has undoubtedly made it easier for shoppers to switch between brands, the study notes. An analysis of the apps respondents have on their phones shows many consumers group their favourite apps by type or functionality.

While general food delivery services such as Mr D and Uber Eats sit next to each other, so do specific food brands like Debonairs and Dominos, it says.

The same is true of banks, grocery retailers, fashion houses and marketplaces such as Takealot and OLX, illustrating that shifting allegiance to a rival is no more than a quick tap away if brands deliver broken experiences.

Overall, the study says 67% of shoppers have abandoned an online transaction, which is similar to 2019 data.

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