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Why Yuppiechef flipped the script

| Store Openings

SA e-commerce pioneer Yuppiechef is the latest in a string of legacy online retailers (Amazon included) that have opened physical stores.

It seems customers — the digital generation, too — want it all: to touch and feel products before purchasing them and to shop online. The Financial Mail interviewed Yuppiechef co-founder and CEO Andrew Smith about flipping the script.

As an online player, what precipitated Yuppiechef’s move to brick-and-mortar retail?

It’s important to go back a little bit. We were two guys (Shane Dryden and myself) working from a lounge in Plumstead, Cape Town. We didn’t start with all the money in the world, a huge team and brand or lots of logistics.

Our decision in 2006 that online was the way to go was made partly out of necessity. Our background is in technology and online marketing and building brands, so it was fairly easy to start and we grew really quickly. Online was perfect for us.

We started to reach a point, however, where our growth was slowing a bit because there was suddenly a lot more competition online. The physical retailers had eventually got their act together and started selling some of the same brands, categories and products as we did — as did other specialist retailers — so it became very much a price game.

We had also reached a big part of the market in terms of people who were comfortable shopping online and who were loyal to us, but it’s not as though we could reach the whole of SA — not any time soon.

About 98% of retail still happens in physical stores. People hang out in malls on the weekends. To stubbornly say "we’re online and we’ll only ever be online" meant we would miss out on a market and the types of shopping our customers want to do.

There are certain products for which people are happy to shop online, and there are other times when they just want to browse.

What do you envision in terms of the brand’s rollout — location, store numbers, size?

Our first store is in Willowbridge, Cape Town. It’s a bit of an experiment, but we have plans to open in Gauteng, where there’s a huge economic population.

The pilot store is designed by renowned interior design firm ARRCC. Only 20% of what we sell online fits in the store, so in future we might need bigger stores.

Customers can look at a product online, and then come into the store to make a final decision and walk away with a purchase. They can also browse in the store, but then have their order delivered so they don’t have to carry it around.

We believe the future of retail is "omnichannel", which means a combination of physical stores and e-commerce.

What are the current challenges for e-commerce in SA?

Payment was a challenge for a while, in terms of credit-card adoption and the ability to transact online and the hurdles that the Reserve Bank and various others put in place, which actually just get in the way of customers being able to transact. There have been connectivity issues, but I think that excuse is dead.

The main challenge for online shopping in SA has been that there hasn’t been anywhere to shop online in the country.

It’s been almost a chicken-and-egg situation. The big retailers, which would have come with supply chain and logistics capabilities and the trust of customers, all sat around 10 years ago and said no-one was shopping online. We got stuck in that cycle for a long time.

Remember that in countries such as the UK and US, customers were happy shopping from catalogues and having products delivered to them. SA shoppers are used to touching something before buying.

The challenge now is mostly around logistics.

If you think of the UK, which has a very high proportion of online spend, you can almost throw a package and it will reach its destination — it’s a high-density region, with a very strong postal service that is trusted.

In SA, we have a small [shopping] population that is spread out over quite a large area and we can’t use the postal service for delivering anything that needs to arrive in one piece.

To what extent have Jamie Oliver/MasterChef/The Great British Bake Off spurred at-home foodie culture?

In the 1990s, if you gave someone a frying pan for Christmas or their birthday they would have hit you on the head with it.

The kitchen was seen as a utilitarian space at the back of the house — somewhere people mostly shied away from.

A lot of houses are now built with open-plan kitchens, so people can entertain while they’re cooking. These days men and women will cook for each other when they’re dating, to show off. Cooking at home has become sexy, and we’ve been able to ride that wave.

We’re not selling to real chefs — were selling to ordinary people. The word "yuppiechef" is based on the idea that even if you’re just making a tomato sandwich, if you cut it with a nice knife and serve it on a fancy plate you can feel like you’re a Jamie Oliver.

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