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Growing online retail requires the right partners

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As South African e-commerce gains momentum, retailers can expand their reach by adding online and mobile channels, picking the right technology and also choosing the right partners, says WESLEY LYNCH, CEO of Realmdigital.

Digital participation curve

According to a 2012 report by technology research company World Wide Worx (WWW), e-commerce growth is accelerating. The study predicts that the Internet economy will increase its contribution to the overall economy from 2% in 2011 (R59-billion), to as much as 2.5% by 2016.

The authors say this can be explained at the hand of a ‚’digital participation curve’. ‚”It takes up to five years before new Internet users gain the confidence and experience in the medium to become active participants in the Internet economy. With the number of Internet users having accelerated from 2008, the number of experienced users will begin accelerating in 2013.‚”

This trend will continue until 2018, the authors say.

In the trenches

South Africans are becoming far more comfortable buying online, with value offerings like Groupon’s group buying playing a crucial role in making it more attractive.

The natural appeal of e-commerce is the accessibility it gives products, something that store-only retailers cannot offer. The convenience of buying from anywhere in the world and having a physical product delivered at your doorstep is hard to beat.

The market for digital products has further grown substantially, with music, books and other downloads leading the way. The instant gratification of a digital download is even more of an incentive to buy online.

Online boost

Academic book retailer Van Schaik confirms excellent uptake of its online presence, www.vanschaik.com as well as a significant change in trading patterns and a net growth in sales.

The company says a massive increase in website traffic occurred after Realmdigital took over its development in 2011. ‚”From 5 000 unique visitors per month 12 months ago, the site now registers on average 340 000 visitors per month,‚” says digital manager Melvin Kaabwe, adding that the company has had to invest in considerable extra capacity to manage the load.

Besides the effect of a new partner, he puts it down to a combination of progressively cheaper Internet access over time and the proliferation of non-PC devices sold with data bundles.

The prevalence of low-cost BlackBerrys on campuses for two years the youth’s favourite phone according to the Sunday Times Generation Next survey has also helped. ‚”We view mobile commerce as key to accessing this market, and a boon for our serious entry into e-commerce as an academic resource. Making the site as accessible as possible to mobile users was one of the formative briefs for the site, and Realmdigital did that for us.‚”

Opportunity

If retailers dither about the online investment and the additional cost of selling (including distribution to customers), they should consider the spike in volumes they are likely to experience.

While Van Schaik’s increase in online sales has been less pronounced than its increase in visitors (30% up year-on-year in February), retailers must not expect to be Amazons overnight. That is a healthy increase in anyone’s terms. In addition, online retail is now pretty competitive, with Kalahari, Loot, Wantitall and others all making their mark and there can be no clearer argument for getting online now.

Kaabwe concedes other extraneous factors. ‚”Only about 2% of South Africans are shopping online ‚’properly’, in the sense of using credit cards. The course most likely to lend itself to card purchases is the MBA students are a more affluent demographic.‚”

Future

With e-commerce finally shaping up to be the force it was always expected to become, real-world retailers will have to work out how to compete with a new generation of leaders Amazon, Kalahari, Wantitall, Loot and many others.

At the heart of embarking on this new direction will be choosing the right digital partner, one that can greatly assist with working out a winning e-commerce and marketing strategy that will get the volumes to justify the leap into new territory.

With competition intensifying, Van Schaik is currently piloting a number of initiatives that will give it an edge over competitors, including multiple digital entry points to the company’s catalogue, any-device downloads of texts, same-day delivery and extra call centre capacity.

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Telcos want one face

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The investments that telecommunications service providers are making in reshaping their online properties into customer-centric portals reflects the growing maturity of self-service and Internet uptake in the industry, says KEVIN MELTZER of Consology.

Many telcos around the world are overhauling their websites to offer customers more holistic portals that give them a single point of entry into the organisation.

They are doing so because they recognise that service will be a key point of differentiation for their businesses in a market that is becoming increasingly competitive. They have also realised that they have a major opportunity to shift customers away from expensive contact centres towards low-cost electronic channels.

In the past, most telecommunications operators ran multiple sites across multiple domains and subdomains. These web-based properties were built around the way that telcos structured their own businesses rather than around the needs of the customer. But we are now seeing the leading operators take a more user-centric approach to the way that they design their web and mobile sites.

This coincides with a change in the industry from slicing customers into numerous segments and then serving them across a range of functional and product areas. For example, many operators split customers into prepaid and postpaid segments or voice and data users, distinctions that are becoming less meaningful in a world of technology convergence. They now want to present a single face to the customer rather than servicing the subscriber through silos.

These changes are starting to percolate through to operators’ customer service and sales strategies. Telcos are starting to pull together disparate products and services that once resided across multiple sites into customer service portals.

These sites put a wide range of information at the subscriber’s fingertips, he adds. Increasingly, for example, subscribers can log directly into their accounts from the operator’s homepage and then access a wealth of services and information. This marks an evolution from the fractured and inconsistent customer experience of the past.

Leading operators are even thinking about how their Self-Service platforms should be integrated with social media strategies to allow customers to pay their electronic bills or top up airtime with a single click from within a social network.

Whereas Self-Service portals on telco sites were once purely about account management functions, they increasingly offer far richer functionality. In addition to allowing subscribers to pay their bills and check their account information, they are also increasingly becoming the first stop for service and commerce.

Operators have started to recognise that splintering their e-commerce, service and account management functions simply makes no sense. Customers want to be able to do everything through one interface rather than needing to visit two or three Web sites, or eventually possibly needing to phone a call centre or visit a store for certain transactions.

Integrated and easy to use online customer service channels will be central for telco operators who want to be competitive in the markets of tomorrow. They form an advantage in an industry where it will be customer relationships rather than cost or service that drive loyalty and purchasing decisions.

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Talk for less with MWEB Talk

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Today, MWEB announced its consumer VoIP package called MWEB Talk, which allows users to make free network calls and get discounted rates made to landlines and mobile phones.

MWEB, today launched its new Voice over IP (VoIP) offering to South African consumers. The service, MWEB Talk, will offer users’ free on network calls to fellow MWEB Talk users’ and cheap calls to landline and mobile phone numbers. This follows the success and demand of the ISP’s existing VoIP products in recent months.

‚”We have seen a noticeable transformation in users’ Internet behaviour with consumers wanting services that complement their ADSL connectivity solution. We have seen phenomenal growth and by the end of the year will deliver over 100 million minutes on our VoIP platform,‚” says Carolyn Holgate, General Manager of MWEB Connect, the ISP’s Consumer and Small Office/ Home Office Division.

MWEB has made significant investments in its infrastructure and VoIP has been prioritised on its network to ensure performance and stability of the MWEB Talk service for both businesses and consumers.

‚”In addition to the high quality of the service, MWEB Talk is also simple to set-up and users’ should experience a significant reduction in their telephone bills. By implementing a VoIP service consumers and small businesses can cut their monthly telecommunication bills by up to 55% to landline and mobile numbers,‚” says Holgate.

With no subscription fee, existing MWEB customers can log into their MWEB account, register for the service and download the application for PC and Mac as well as mobile applications that turn an iPhone, Android, and Nokia smartphone into a VoIP phone. Customers will also be able to purchase a Desktop VoIP Handset for R99 which will be HD voice ready and will support multi-extensions.

‚”We believe that VoIP is the future of telephony in South Africa and we are extremely excited to see the consumer market shift into the VoIP space,‚” concludes Holgate.

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