Before up became down and up again as the landscape shifted societally, culturally and economically at a rush rate as Covid-19 bust through the gates, South African e-commerce had anticipated a year on year growth.
The value at that time was sitting with apparel, media products and consumer electronics, with pureplay Etailers such as TakeAlot, Superbalist and OneDayOnly dominating the market.
“And then, suddenly, groceries became the new focus as a necessity due to lockdown trading rules,” says Justin Dennis, global e-commerce executive at Smollan. “We have seen over this time, FMCG growth anywhere between 6- to 10-times over the previous year’s trading.
“With the current trajectory, we expect e-commerce to be closer to 2% of retail by the end of this year, as opposed to 1,4% back in 2019.
“Beyond the pureplay Etailers, there has been a demand for ‘Brick & Click’ and ‘contactless delivery’, which has seen exponential growth on platforms like Checkers, Clicks Online and Sixty60 and on demand platforms like Zulzi and OneCart benefitting greatly.”
All businesses now face unprecedented challenges, Dennis adds. In the commerce sector with omnichannel opportunities, those challenges are twinned with opportunity. The commerce evolution with its accelerated pace has given rise to a range of new competitive requirements, and consumer behavioural shifts from the initial panic buying space to a more mindful approach to commerce, with e-commerce brands in particular shining brightly.
Nielsen, when looking into scenarios beyond the pandemic identified three-time horizons for market regeneration. Rebound was the early return to normal living conditions (schools, restaurants etc. re-open), followed by Reboot, a medium-term scenario that is positioned in Q4 of this year. And then a longer-term view of Reinvent, which is a return to normal living conditions at some point in the first half of 2021 as the world fundamentally recalibrates.
In a recent Winning Strategy Report by Ascential Edge, key recommendations from a tactical as well as strategic perspective were offered, around stores of the future, shopper engagement and retention, supply chain and fulfilment and ecommerce and digital ecosystem management.
For the store of the future, in line with the rise in e-commerce and the increased cost of competing all putting pressure on store-based retailer profitability, the industry must develop a direction for physical store networks to drive traffic and sales.
With consumer sentiment still hedging on the side of caution in terms of in-store purchasing, retailers, brands and business owners need to make sure the online explosion is not at the expense of the in-store experience.
As chain retail continues to take market share from traditional retail and channel blurring intensifies, retailers will need to find ways to drive shopper engagement around return trips and foster loyalty with so much choice at hand.
Retailers need to meet shopper expectations by offering options that fit into their busy lifestyles. As investment in e-commerce and fulfilment take their toll on profit margins, efficient and cost-effective supply chains will become even more important.
With the expected growth in e-commerce, it is crucial for retailers to develop sound platforms and operate successful digital ecosystems to drive sales. Now more than ever, nrands are advised to offer personalisation opportunities to customers on their digital platforms.
The D2C trend, growing exponentially around the globe and taking a foothold in South Africa, is where brands can truly manage their brand experience and offer something beyond what a marketplace can. In so doing, offering more than just a digital transaction and introducing the option to play with personalisation, subscriptions and more within their own portfolio.
“Physical retail will remain the largest part of retail for the foreseeable future,” says Dennis. “However, if global markets and Covid-19 has taught us anything, e-commerce has a massive part to play, and an ever-increasing role in the future.
“We do not believe in neglecting either, but rather ensuring that both are driven adequately. E-commerce will see increased growth and will grow its share of retail. The key is to already have learnt the lessons and driven the business online while it is still in its infancy. Otherwise brands may be playing catch up down the line.”