SA retail falls short of online demands
Local retailers are falling behind their international peers when it comes to online shopping offerings and are not matching consumers’ online demand, according to Dirk Prinsloo of Urban Studies.
The retailing study, Prinsloo did on behalf of the South African Council of Shopping Centres (SACSC), also revealed that a new form of shopping, omni-channel, would be among the big challenges facing local retailers this year.
Omni-channel is the simultaneous use of online shopping, as well as physical shopping, among other methods.
Amanda Stops, the chief executive at SACSC, said consumers were always pushing retailers to improve the shopping experience, whether it was in-store, online or a combination of the two. “This is resulting in a gap between consumer expectations and the actual shopping experience.”
The study also showed that this year, Asia Pacific was set to be the leading region for e-commerce sales at 33.4 percent, with North America at 31.7 percent and Western Europe at 24.6 percent. These three regions are set to take more than 90 percent of global e-commerce.
Africa and the Middle East’s share would remain at just about 2 percent. “However, the future potential was phenomenal,” Prinsloo said.
Arthur Goldstuck, the World Wide Worx managing director, said most of the big local players were not catching up to their peers overseas.
He pointed out a few local retailers that he believed had made an effort in online shopping offerings, namely Woolworths, Cape Union Mart and pure online retailers such as Takealot.com and Net Florist.
According to Prinsloo, the websites that online shoppers used the most in the last 12 months were Woolworths, Exclusive Books, Pick n Pay, Incredible Connection, Cape Union Mart, Mr Price, Edgars and Makro. Favourite online stores included Kalahari, Takealot.com and Amazon.
Goldstuck said last year around R6 billion was spent on online retailing in South Africa, indicating growth of about 35 percent compared with previous years.
“What we have been seeing is consistent growth of about 35 percent for at least five years. What this tells us is that this growth is coming off from a very low base.”
Gerard Dumont, a retail industry architect at IBM, said local online shopping was gaining traction and was forecast to grow at between 30 percent and 40 percent a year.
The study also revealed that retailers would need to make large online strides if they wished to remain relevant to consumers.
Prinsloo said: “In South Africa, the lion’s share of retail sales is still happening in-store. With only slightly more than 1 percent of shopping done online, it is easy to discount the importance of online shopping… But doing so would be a mistake.”
He added that consumers were increasingly combining online and physical retail. “This behaviour is driving multi-channel retail growth, and if retailers want to stay in touch with consumers, they must plan now and formulate workable and easy-to-use omni-channel strategies.”
Dumont said the winners in the online shopping race of today would be the leaders of tomorrow. “Traditional retailers… are seeing (online retail) as an active opportunity to identify shopper needs, to connect with them by helping to generate shopping lists and then to move into the fulfilment of (the) sales cycle across channels.”