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New faces of e-commerce

By JACQUI MAROUN, Chief Experience Officer, VMLY&R South Africa

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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.

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