Online shopper: Lessons from 2016

Online since 1.03.2017 • Filed under Retail • From Issue 5 - March 2017 - August 2017 page(s) 90
Online shopper: Lessons from 2016

2016 Was a turbulent year for consumers. However, as the online environment became more flexible and secure, it is online shoppers who may have escaped with the least scars.

While the estimated R8.9 billion spent annually online in South Africa may not be on a par with the UK or USA, things are changing as demographics and perceptions shift.

Karen Nadasen, CEO at PayU South Africa, says: ‘eCommerce growth is being driven by an increasingly sophisticated consumer market that values the convenience of online shopping and recognises the layers of security that surround online payment solutions. Our business, for example, has witnessed a 15% increase in volumes over and above our projected year-on-year increase for November – largely thanks to Black Friday and Cyber Monday. We have also seen a 76% decrease in the number of chargebacks processed in 2016 versus 2015, through effective fraud monitoring tools.’

According to a survey undertaken by Urban Studies for the South African Council of Shopping Centres, security – especially around credit cards – was a major concern in 2013 but this has reduced significantly over the past three years. The survey found that credit card security dropped from the second biggest issue in 2013 to one of the lowest in 2016. Now, the primary consumer concerns are being unable to touch or see a product and uncertainty around quality and size.

Leading payment gateways recognise that consumers want to enjoy a host of payment methods (credit card, debit card, EFT and scan), and there is a decline in consumers carrying sums of cash.

‘People want a variety of payment solutions they can trust,’ adds Nadasen. ‘For instance, we have seen EFT as an online payment method grow by over 92% year on year, coupled with a 183% increase in EFT as a payment method for November 2016 versus November 2015.’

It seems that the hard work put in by financial institutions and payment solution providers has paid off – 2016 was the year when Black Friday and Cyber Monday took flight in South Africa. In an interview on IOL,

Takealot’s Chief Marketing Officer, Julie-Anne Walsh, revealed that the site saw 300% of the usual traffic, while Facebook showed it to be the biggest online shopping day of 2016 in the country.

The trends that truly shaped online shopping in 2016 were an increased demand for variety and free delivery. The biggest drivers of online shopping are convenience and time – people are increasingly frustrated with queues, traffic and delays when heading out to spend money, whether on groceries or gifts.

As trends go, the new Amazon offering hits the proverbial nail on the head. Recognising that shoppers don’t want queues and inconvenience while still wanting to experience the tactile pleasures of the items they purchase, Amazon has created a store with no checkout. Consumers simply download the Amazon Go app, enter the store, take what they want and leave. It’s a unique blend of the physical store with the convenience of the online shop and it will be interesting to see how successful it is when it launches to the public in 2017.

However, back on the African continent, innovation appears to be redefining local eCommerce trends. The PwC Total Retail 2016 report showed that innovation is where consumers are spending – people want the omni-channel experience that seamlessly carries them from social media to online store to product, and playing at home.

‘It could be that when we look back at 2016 we will see the year when innovation and consumer trust turned the eCommerce corner in South Africa,’ notes Nadasen.

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Issue 5 - March 2017 - August 2017

Issue 5 - March 2017 - August 2017

This article was featured on page 90 of SABI Magazine Issue 5 - March 2017 - August 2017 .

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