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Now for the attitude divide

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The digital divide between developed and developing countries is no longer only about access to technology. A gulf also exists in attitudes to technology, writes ARTHUR GOLDSTUCK.

It’s pretty obvious that developed countries almost seem to be a on a different planet from those with emerging economies when one considers use of high-tech devices and their visibility in the human environment.

But now an invisible divide between the haves and have-nots has also emerged, and that is the gulf between the attitudes of those living in such divergent economies.

A global study released by Microsoft last week shows that, while most Internet users believe personal technology has improved their lives, far more users in developing countries believe it has improved social bonds.

The report, entitled “Views from Around the Globe: 2nd Annual Poll on How Personal Technology Is Changing Our Lives,” is based on interviews with more than12 000 Internet users from 12 countries.

The most fascinating aspect of the study is how greater pervasiveness of technology seems to result in reduced enthusiasm for specific benefits, like fitness and the sharing economy. Instead, those with greater access tend to express greater concern about issues like privacy. Naturally, such issues are less important in environments where the implications of pervasive connectedness have not yet become apparent.

The key overall findings, according to Microsoft, include:

  • • Most respondents across all 12 countries think personal technology has had a positive impact on their ability to find more affordable products, start new businesses and be more productive;
  • • Most respondents say it has benefited social activism;
  • • More respondents than in the previous year said technology had had a positive impact on transportation and literacy;
  • • Fewer than in the previous year said it has benefited social bonds, personal freedom and political expression.
  • • Concern about technology’s impact on privacy jumped significantly. Most users across 11 of the 12 countries surveyed said technology’s effect on privacy was mostly negative.
  • • Majorities in all countries except India and Indonesia said current legal protections for users of personal technology were insufficient;

However, marked differences began to emerge when responses from developing countries were grouped, says Zoaib Hoosen, managing director of Microsoft South Africa.

“In developing countries, 60 per cent of respondents said technology had a positive impact on social bonds, versus only 36 per cent in developing countries. That’s a very significant difference.

“The sharing economy, with its online services like Uber, are seen as having a positive impact in in developing countries, while in developed countries they still preferred traditional services.

“The issue there is that they often didn’t have a viable alternative in developing countries, whereas such services in developed countries merely add additional options. It’s about leapfrogging traditional services that don’t exist versus disruption of existing services. The former has a bigger impact.”

Nevertheless, says Mark Penn, Microsoft executive vice president and chief strategy officer, “Internet users overwhelmingly say that personal technology is making the world better and more vital.”

The area that saw the greatest divergence was the effect of technology on trust in the media, says Penn.

“By a 2:1 margin, respondents in developing countries think personal technology has had a mostly positive effect on trust in the media. But in developed countries, the impression is the opposite: respondents believe by a 2:1 margin that the effect on trust in the media has been mostly negative.”

The key factor behind this attitude divide appears to be the media habits of respondents, and dependence on social media.

“These opposing views are borne out in the two kinds of countries’ media habits,” says Penn. “In developing countries, 70 per cent of respondents get most of their news from social media, compared to only 31 per cent in developed countries.”

With social media access accelerating in developing countries, thanks to rapidly growing access on phones, that divide is unlikely to be bridged very soon.

* The poll, conducted in the last two weeks of December 2014, included Internet users in Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Africa, South Korea, Turkey and the U.S.

* Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee, and subscribe to his YouTube channel at http://bit.ly/GGadgets

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Online retail gets real

After decades of experience in selling online, retailers still seek out the secret of reaching the digital consumer, writes ARTHUR GOLDSTUCK.

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It’s been 23 years since the first pizza and the first bunch of flowers was sold online. One would think, after all this time, that retailers would know exactly what works, and exactly how the digital consumer thinks.

Yet, in shopping-mad South Africa, only 4% of adults regularly shop online. One could blame high data costs, low levels of tech-savviness, or lack of trust. However, that doesn’t explain why a population where more than a quarter of people have a debit or credit card and almost 40% of people use the Internet is staying away.

The new Online Retail in South Africa 2019 study, conducted by World Wide Worx with the support of Visa and Platinum Seed, reveals that growth is in fact healthy, but is still coming off a low base. This year, the total sale of retail products online is expected to pass the R14-billion mark, making up 1.4% of total retail.

This figure represents 25% growth over 2017, and comes after the same rate of growth was seen in 2017. At this rate, it is clear that online retail is going mainstream, driven by aggressive marketing, and new shopping channels like mobile shopping. 

But it is equally clear that not all retailers are getting it right. According to the study, the unwillingness of business to reinvest revenue in developing their online presence is one of the main barriers to long-term success. Only one in five companies surveyed invested more than 20% of their online turnover back into their online store. Over half invested less than 10% back.

On the surface, the industry looks healthy, as a surprisingly high 71% of online retailers surveyed say they are profitable. But this brings to mind the early days of Amazon.com, in 1996, when founder Jeff Bezos was asked when it would become profitable.

He declared that it would not be profitable for at least another five years. And if it did, he said, it would be in big trouble. He meant that it was so important for long-term sustainability that Amazon reinvest all its revenues in customer systems, that it could not afford to look for short-term profits.

According to the South African study, the single most critical factor in the success of online retail activities is customer service. A vast majority, 98% of respondents, regarded it as important. This positions customer service as the very heart of online retail. For Amazon, investment back into systems that would streamline customer service became the key to the world’s digital wallets.

In South Africa online still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature. 

Clothing and apparel is the fastest growing sector, but is also the sector with the highest turnover of businesses. It illustrates the dangers of a low barrier to entry: the survival rate of online stores in this sector is probably directly opposite to the ease of setting up an online apparel store.

A fast-growing category that was fairly low on the agenda in the past, alcohol, tobacco and vaping, has benefited from the increased online supply of vapes, juices and accessories. It also suggests that smoking bans, and the change in the legal status of marijuana during the survey, may have boosted demand. 

In the coming weeks, we can expect online retail to fall under the spotlight as never before. Black Friday, a shopping tradition imported “wholesale” from the United States, is expected to become the biggest online shopping day of the year in South Africa, as it is in the USA.

Initially, it was just a gimmick in South Africa, attempting to cash in on what was a purely American tradition of insane sales on the Friday after Thanksgiving Day, which occurs on the third Thursday of November every year. It is followed by Cyber Monday, making the entire weekend one of major promotions and great bargains.

It has grown every year in South Africa since its first introduction about six years ago, and last year it broke into the mainstream, with numerous high profile retailers embracing it, and many consumers experiencing it for the first time. 

It is now positioned as the prime bargain day of the year for consumers, and many wait in anticipation for it, as they do in the USA. Along with Cyber Monday, it provides an excuse for retailers to go all out in their marketing, and for consumers to storm the display shelves or web pages. South African shoppers, clearly, are easily enticed by bargains.

Word of mouth around Black Friday has also grown massively in the past two years, driven by both media and shoppers who have found ridiculous bargains. As news spreads that the most ridiculous of the bargains are to be had online, even those who were reticent of digital shopping will be tempted to convert.

The Online Retail in SA 2019 report has shown over the years that, as people become more experienced in using the Internet, their propensity to shop online increases. This is part of the World Wide Worx model known as the Digital Participation Curve. The key missing factor in the Curve is that most retailers do not know how to convert that propensity into actual online shopping behaviour. Black Friday will be one of the keys to conversion.

Carry on reading to find out about the online retailers of the year.

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Cars

Merc joins the battery push

A new interactive sculpture in Cape Town symbolises rapid advances in car technology, writes ARTHUR GOLDSTUCK.

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First there was IQ, or intelligence quotient, to test how clever we are. Then came EQ, for emotional intelligence, to test how well we engage with the world. Now, Mercedes Benz is introducing a new form of EQ, for electric intelligence, or how well our cars prepare us for the future.

That will be the branding for a new range of vehicles being developed now by the world’s leading luxury vehicle maker, as it aims to drive automotive technology beyond connected and self-driving cars.

Last week, it unveiled the Concept EQA, a compact, sporty electric car that is expected to have a range of 400km on one charge. It has one electric motor on the front axle and one at the rear, allowing for greater flexibility in driving settings. More important, though, it will have zero carbon emissions, and is part of Mercedes-Benz’s push into the electric car market.

According to Johannes Fritz, the company’s co-CEO in South Africa, battery-electric models will account for 15-25 percent of total unit sales by 2025. The big variation in forecasts is a result of uncertainty around both customer preferences and public infrastructure. 

Johannes Fritz, Mercedes-Benz South Africa co-CEO.

The common perception is that the lack of government interest in an electric vehicle future will hamper roll-out of a charging network, and that lack of public interest means there is little incentive for car makers to increase production.

To counter this perception, and advance its vision of EQ, Mercedes-Benz combined the unveiling of the Concept EQA with the opening of a unique pavilion at the V&A Waterfront in Cape Town.

Continue reading about the electric vehicle push in South Africa. 

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