What do Ubuntu, gin and WhatsApp have in common? Aside from some feel-good vibes, they are also examples of eCommerce trends that will be a bigger part of our future.
In Latin America eCommerce accounted for 34% of business before the pandemic. During March and April 2020, it grew by 50% with 80,000 new eCommerce outlets.
In China, the eCommerce market accelerated in response to the SARS epidemic at the turn of the century. Twenty years on, China has the most developed eCommerce market in the world, not only in terms of
size (more than 1 billion users) but also sophistication.
Imagine browsing through a supermarket, scanning barcodes, and checking
out on your phone, leaving you free to run other errands for the day,
and your groceries arrive at home when you do. The levels of convenience and adaptation to many different lifestyle
patterns is hard to believe.
The global view our international network affords us is always
fascinating, but let’s come back home and look at the key eCommerce
trends that are developing in South Africa. These are worth knowing and
understanding to level up your eCommerce offering for
a changed world.
1. Direct from source
Customers are going to the source, trading directly with manufacturers, producers and growers. A group of farmers formed a Facebook group on 1 May and had almost 50,000 followers in two weeks. This isn’t a unique tale.
The Khula app is growing as fast as a well-tended crop as small-scale farmers use it to connect with people who would like better prices for great produce. And there are many more examples. Here’s the thing about this eCommerce trend: it’s too large and successful to recede after lockdown and it will be even bigger by then. To thrive, the retail industry should find ways to work with this trend rather than against it.
2. Automated regulars
If
you buy groceries online you know that most outlets save your shopping
lists to make it easy for you to re-order your preferred goods.
This trend will become more sophisticated with the option of automating the ordering and delivery of your basics on a regular basis.
Effectively a subscription service, this applies as much to specialised goods (e.g. a curated monthly gin box) as it does to more essential groceries. This level of automation is particularly good for bulk deliveries to organised buyers like stokvels, and for negotiating lower prices in return for customer loyalty and the long-term relationship between buyer and seller.
3. Social commerce
It seems everyone has a side hustle as
people scramble to replace the income lost during lockdown. Actually
‘side hustle’ makes it sound too casual – it’s a matter of survival and it’s urgent. Anyone can own a shop now thanks to
digital tech and the plethora of apps that offer easy points of
entry. Even if you don’t have your own products you can use an
affiliate model and sell products made by other people for a portion of the price.
In South Africa we’re predicting two
distinct patterns in this trend: a) buying in bulk from the source and
selling on within local communities (for that essential cut of the deal), and b) the growth of these side hustles into fully-fledged
small businesses.
Customers are happy to support these businesses because they understand that everyone is going through the same difficulties. Selling to families, friends and their friends creates a wonderful circle of influence around these small businesses.
4. Peri-urban and rural
eCommerce needs to break out of suburbia to meet the needs of
all South Africans, finally democratizing access to digital
convenience. There are two aspects to be solved to make this work.
Last-mile delivery deals with the complexity
of getting goods to peri-urban and rural areas, where recipients often don’t have formal addresses. Businesses like Jumia, a Nigerian eCommerce company that specialises in meeting the challenges of rural delivery, are the ones to watch as they now start to
flex in the South African market.
The second aspect to be solved is creating simple ordering mechanisms that use very little data. Enter WhatsApp, which is no longer just a conversation tool. WhatsApp Business now allows for eCommerce-style catalogues and ordering, using a fraction of the data that a website would use on a smartphone. I believe that the combination of last-mile delivery and simple mobile ordering channels is the real power of eCommerce in this country.
5. Shared spaces
This one is a masterclass in Ubuntu. Spar quickly emerged as a South African Covid-19 hero when a branch offered shelf space to local small businesses so that they wouldn’t go under during lockdown. Another branch also closed their
own produce sections when small businesses selling the same goods in their neighbourhoods were able to trade.
Although none quite as heart-warming as
Spar, other online collaborations are set to become a significant trend
with surprising partnerships developing around the same customer. The
design community in Cape Town already uses their
own online spaces to support other local designers and – hugely
important – has reframed competition into winning together. They’re
sharing physical resources, virtual resources and goodwill, and in the
process they’re exposed to new customers.
In turn, not only do customers get increased convenience and more value but, in these new times, they value spending their money with companies that place humans above money.
6. Bundled value
We’re seeing packaging of products in an eCommerce context currently serving two very different markets.
On one side, retailers are offering convenient care packages of
basic goods and food to keep a family for a week, at lower prices for
the bundle than if the items were bought separately. On the other side
is the bundling of products
for a premium experience and curated value, such as UCOOK packages of food put together with recipes for the creation of specific meals.
In both cases, the customer gets convenience and more value than the sum of the parts, and we’ll be seeing more of this as retailers look for ways to differentiate to meet customer needs.
7. Interdependence
This trend will impact eCommerce inasmuch
as it will impact all business. In South Africa, we’ve seen a shift in
spirit as people have moved from purely transactional relationships with
businesses to interdependent relationships.
We’ve all seen customers rally to support small businesses and we’ve all
seen how this humanises the small businesses.
It’s no longer about my wellbeing depending
on you and what you can give me. Now there is an understanding that my
wellbeing depends on your wellbeing, on your thriving.
If business owners and producers understand that their wellbeing doesn’t depend on the money, attention and loyalty of their customers, but rather on the wellbeing of their customers as fellow humans, then we truly have achieved
connected commerce and we will all thrive.
We know the world has changed. eCommerce affords us a way to test out
how to respond to customers’ needs relatively quickly while listening
to their feedback to co-create a connected experience.
What all these trends have in common is that they present the
different ways humans are finding to connect and build relationships as
they do business together. This shift is towards a more collaborative
way of buying, selling and living, where everyone’s
needs are met in a good way.
