Coronavirus to drive permanent uptick in SA’s online shopping
As SA grapples with the effects of the coronavirus (COVID-19) pandemic, the 21-day lockdown has led to shifts in consumer shopping behaviour, with the reduced footfall in retail stores expected to lead to a permanent uptick in online shopping.
As COVID-19 tightens its grip on nations across the globe, governments have instituted lockdowns in an attempt to contain the pandemic, which is expected to wreak havoc on global economies, as a recession looms.
Grocery chains, spaza shops, pharmacies,some telco outlets and those producing and selling essential goods remain open during lockdown, with some resorting to enforcing limits on certain items to stop stockpiling, as supply chain disruptions lead to shortages of some essential items.
South African retailers Game, Pick n Pay, Makro and Shoprite say consumers are adapting their purchasing behaviour to cope with this rapidly-evolving situation, which has led to a surge in online grocery orders, with new unique online customers hopping onto the e-commerce bandwagon.
Globally, grocery delivery platforms such as Shipt, Walmart Grocery and Instacart are seeing dramatic spikes in sales, while Amazon is hiring more than 100 000 workers in the US to keep up with consumer demand amid the coronavirus pandemic.
Jessica Knight, head of online at Pick n Pay, SA’s largest grocery online service, says the PnP mobile app and Web sites have seen an increase in online orders in the past few weeks.
To maximise its delivery capacity, the supermarket recently launched a four-hour service in partnership with delivery app BOTTLES app.
“Pick n Pay’s grocery online service has been in high demand over the last few weeks. We’ve already increased our delivery capacity per week, and we are working really hard to get groceries to as many customers as we can, as quickly and efficiently as we can, for those who prefer to shop online.”
The BOTTLES app service allows users to order essential grocery items directly from selected stores and deliver to customers.
“While the vast majority of Pick n Pay customers will continue to rely on the physical stores, one way we’ve made life easier for customers is through the introduction of our ‘Click Direct’ e-mail ordering service where customers can e-mail their shopping lists to participating stores for collection,” explains Knight.
Massmart Group, which announced a prize freeze across its essential services brands Makro, Cambridge Food, Game and Cash & Carry stores for the duration of the 21-day nation-wide lockdown, says it has also witnessed a massive surge in online consumers.
“In the last few weeks, Makro has seen increased online sales of essential products, and Game has also seen an increase in sale of essentials online,” says Refilwe Boikanyo, communications manager at Massmart Group.
“In fact, Game didn't sell essentials online until a week-and-a-half ago. It had initially planned on introducing essential items online later on this year, but due to consumer demand, the team worked very hard to bring a small selection of favourites online.”
Goods which have seen increased demand during this period include breakfast cereal, canned fish and canned beans, with toilet paper remaining the bestselling of all products, notes Boikanyo.
Shoprite says it has extended its one-hour delivery time on its online shopping app Sixty60, while delivery app OneCart has reportedly seen a 300% spike in order volumes since the start of the coronavirus outbreak in SA.
“Due to high order volumes which impacts delivery speeds, deliveries may take longer than an hour. During lockdown, orders have been limited to a maximum of 30 items in total,” states the Shoprite Web site.
While SA has lagged behind the rest of the world in e-commerce uptake – with around 2% of consumers compared to an average 10% globally, analysts believe current consumer behaviour is expected to result in an increase in online shopping even after the pandemic.
However, retailers have to be ready from a capacity and infrastructure point of view.
Derek Cikes, commercial director of online payment gateway Payflex, says health and safety concerns have led to more locals using online shopping as an alternative.
According to Cikes, countries that have implemented only social distancing have seen online shopping thriving across different categories, while in countries where lockdown has been implemented, online has grown in the essential service categories.
“In countries which have experienced an earlier spread of the virus, there has been a marked increase in online shopping, with people staying away from crowds and public spaces.
“We strongly believe the current health crisis will motivate people to overcome their inertia to learning and adopting online shopping. Once they experience the security, simplicity and convenience of shopping in the online environment, the virtual world will become more familiar to them and they will be more inclined to choose the ease of online shopping even after the pandemic has ended.”
Gareth Paterson, retailer lead for consumer research firm Nielsen SA, says 57% of South African consumers prefer the physical store and 40% enjoy the in-store experience – but this will change as store access is restricted.
“As yet, complete retail online shopping data is unavailable, but we expect that many of the consumers who were willing have now started to trial online shopping. In China, many new consumers ventured online for the first time – especially older and less adventurous consumers. In SA, we expect that this will also be a significant driver for shifting to online shopping, provided the main barriers or hesitations that non-users had expressed in the past can be addressed, and infrastructure and supply can be bolstered by retailers.”