The pandemic changed many aspects of our daily lives, but none potentially more so than how we started shopping with potential illness weighing on our minds.
We have seen a lot of data emerging as ecommerce grew in popularity, but now FNB has weighed in with some rather important insights for SMEs.
Not including travel and accommodation, FNB saw the amount spent online by shoppers climb 102 percent between 2019 and 2020. This spending appetite continued in 2021 with spending increasing by 39 percent in 2021. While spending has declined since 2019 with the average spend at R450 in 2019 and only R390 now, it’s apparent that more South Africans are shopping online.
FNB Merchant Services estimates that South Africa’s ecommerce market will reach more than R400 billion by 2025 on the back of more than a billion transactions per year.
As much as pivoting to offering online shopping was important, as chief executive officer at FNB Merchant Services, Thokozani Dlamini explains, that wasn’t the only factor in success.
“Not all major retailers were prepared for the sudden change, but those that were successful were the ones who could adopt a fast reliable logistical solution in meeting the delivery demand. Key challenges to overcome were consumer trust in the fulfilment of sales where physical products had to be delivered, and logistical solutions to meet spiking demand,” says Dlamini.
While many shopping solutions have appeared over the last two years, none has managed to match the convenience offered by Checkers Sixty60. Not only is pricing fair with a flat delivery fee, shopping is delivered within an hour and that’s a hard offer to beat.
When it comes to SMEs, Dlamini notes that the competitiveness of smaller independent retailers has improved. This is likely because larger retailers such as Takealot have to create and maintain their own digital infrastructure daily.
SMEs, however, can focus their efforts elsewhere while making use of out-of-the-box solutions.
“Larger retailers are compelled to have a brand-specific digital and shopping presence that requires extensive day-to-day management and maintenance particularly in the security of payment and customer data. SMEs don’t necessarily have this data security problem as they can leverage off marketplace and payment gateway portals to manage their data and payment risk. SMEs can also specialise, finding niche offerings that counter the need to compete on price,” FNB explains.
Of course, ecommerce isn’t suited for all businesses. For larger ticket items such as televisions and decor, customers are still likely to want to touch and see these items before clicking buy.
This highlights the need for an extensive omnichannel strategy and as time wears on, this sort of strategy will become more important.
“The ability to recognise that window-shopping is migrating to browser-shopping will dictate how future retail develops. Companies that offer the best online experience backed by pricing will become most successful. Ecommerce should be seen as a natural extension of the consumer’s shopping experience,” notes Dlamini.
“Ecommerce is not a static offering: businesses need to constantly monitor consumer demand dynamics and quickly respond to remain relevant. Retailers should not expect to simply replicate their B&M merchandising strategy for their website,” he concludes.
