It would seem that the number of South Africans that are now
opting to shop online has increased, or be it that the number of players in
this market has increased. What I find interesting is how long it has taken for
South Africans to catch on to this lifestyle. Some of the more obvious factors
that may be driving this wave include the fact that high speed, affordable internet
is still relatively new to this country.
South Africans have also shown themselves to be great
innovators with their “maak a plan” attitude that saw the development of many
South African products through the 20th century.
What has happened is that the large retailers have been very slow
in filling this gap. This has allowed local aspirant internet-entrepreneurs to
rise to the challenge.
What will shape the market going forward? Naturally, as with
all emerging sectors there will be somewhat of a natural selection. I would
like to propose that the market will be shaped strongly by a combination of
these factors.
The availability of a well functional mobile shopping
alternative; mobile shopping will be a great driver, if for no other reason but
its shear convenience. This would ultimately mean the mobile payments also
opens up for vigorous players.
One of the few interesting notes I remember about e-commerce
from a first year varsity lecturer paraphrased was that “e-commerce is a powerful
tool, in context” he argued that people might be more willing to purchase
non-perishable groceries and capital goods such as TVs and computers than they
might be comfortable buying clothes on-line (for some walking in and out of the
fitting room is an important part of the shopping experience). Though, I wonder
if this proves to be close to the reality that we see today.
That brings me to the next issue, the grouping of products.
Many online shopping sites sell themselves as the buy-anything/sell-anything store.
However there might be some advantage to be gain from a speciality store, such
as a more purpose fit designed store.
No retailer could ever underplay the importance of after sales
support. This is going to be big. Can I propose that this might be the ace-card;
this could prove to be a greater determinant than the actual shopping
experience; i.e. the pretties of the website (barring that it still has minimum
levels of aesthetic appeal and guarantees security).
One question I wish to have answered is whether online
shopping results in true savings for the consumer. Let’s investigate this
somewhat. Firstly online shopping allows the consumer to compare prices among
several retailers at almost no cost and in a matter of minutes. Online-stores
can avoid the high costs of rentals and shop-fitting which are associated with
shopping malls. The trick though is that both the online store and the retailer
compete in the same market for the same customer. They would not be faulted for
seeking to take advantage of the arbitrage. And with the convenience that
online shopping brings forth as its value proposition, economics might tell us
that the consumer would be willing to pay a premium. The conclusion, I do not
see any great savings resulting on the side of the consumer.
Though there might be value in just being present, there is no
doubt that if chain retail stores wish to compete in this segment they will
have to act fast. The ability to decouple their online business from their
stores will prove to be crucial in ensuring that they can compete with more
agility and thus retain the customer.
