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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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Showmax launches in Nigeria

Basketmouth and Bovi are the hosts of an exclusive Big Brother Naija recap show, Big Brother Naija Hot Room, as Showmax launches in Nigeria.

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Showmax has launched its video-on-demand service in Nigeria. The video streaming service features a dedicated slate of Nigerian TV shows and movies, international hit series, Hollywood blockbusters, and a Big Brother Naija partnership with live streaming and exclusive new BBNaija shows.

The launch brings two important firsts: the first time a wide range of popular Nigerian series can be binged from the beginning, and a partnership with Big Brother Naija featuring live streaming of the Sunday night evictions as well as two new BBNaija shows that are exclusive to Showmax. One of the new shows will be hosted by comedians Basketmouth and Bovi, who will provide commentary on happenings in the Big Brother Naija house.

“We’re aiming for the sweet spot that other services may have missed,” says Niclas Ekdahl, CEO of MultiChoice Group’s Connected Video division. “Taking a generic service and tacking on a few Nollywood movies won’t cut it, so we’re coming in with a strong mix of bang up-to-date Nigerian shows, international hits and favourites from across Africa, and now, as something completely new: on-demand and live Big Brother Naija content.”

Showmax will live-stream all Sunday eviction episodes of Big Brother Naija as well as the finale, and recordings of the nomination shows will be posted on Tuesdays. In addition to this, two brand-new shows, exclusive to Showmax, have been produced. Big Brother Naija Extra View is a 25-minute compilation of unseen footage and will be added to the site daily from Tuesday to Saturday. Big Brother Naija Hot Room is a 25-minute satirical commentary on the week’s main drama and action, hosted by legendary comedians Basketmouth and Bovi, with new episodes coming every Sunday evening ahead of the evictions.

The following shows will be added daily, as they air on Africa Magic channels, with all past episodes available to binge from the beginning:

– Tinsel, one of Nigeria’s longest running TV series and Africa Magic Viewers Choice Best Drama 2017

– The Johnsons, featuring City People Award winners Olumide Oworu and Charles Inojie

– My Flatmates, starring 2018 Savanna Pan-African Comic of the Year Basketmouth

The new Showmax service will feature hundreds of Nollywood movies and thousands of TV show episodes and Bollywood shows. Telenovelas will also be part of the lineup, as will hits from the rest of Africa like Kenya’s Supa Modo, winner of 50 international awards, and South Africa’s big Africa Movie Academy Awards winner Five Fingers For Marseilles

The lineup of international shows on the new service includes ChernobylVikingsPowerGame of ThronesTrue Detective (starring Mahershala Ali), InsecureBillions, Ballers, and Luther (starring Nigerian BAFTA winner Wunmi Mosaku opposite Idris Elba). The latest episodes of Big Little Lies are added weekly.

There’s also a major focus on kids, with shows like Paw PatrolPJ Masks, and Doc McStuffins.

To get Showmax, visit www.showmax.com. Showmax has a risk-free trial: once signed up, cancel within the first 14 days and pay nothing. Once the 14-day free trial is over, the cost is N2,900 per month.

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Want a competitive edge? Unlock your business data

By Dr YUDHVIR SEETHARAM, head of analytics, insights and research for FNB Business

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The businesses which will be able to count themselves amongst the most successful in the coming years will be those that have succeeded in fully harnessing the power of data. But while you’d be hard pressed to find many businesses that are not currently building or acquiring systems and technical resources aimed at unlocking the value of data, the same priority does not appear to have been given to embedding data-driven organisational cultures.

This failure to focus on culture in parallel with technology not only reveals a lack of understanding of the symbiotic nature of the relationship between the two, but also presents a real risk that the massive investments being made into data might not deliver the returns that companies are hoping for.

The problem lies in the fact that while data analytics and processing are relatively exact sciences, a data-driven culture is significantly more difficult to define. So while company owners, managers and executives may not be able to tell you exactly how data analysis works, they can tell you what they want to get out of it. The same isn’t true of their understanding of a data-driven culture, and so the creation of such a culture is either assigned a lower strategic priority, or simply handed off to the organisation’s Chief Technology Officer, Chief Data Officer or HR executive.

This approach is very unlikely to unlock the full value of being data driven. To do that, every person in the organisation has to recognise the importance of being fully data-driven as a competitive differentiator and embrace the need to build a data-driven culture within that organisation.

This is by no means a small ask. Apart from the significant challenges – both technical and human – that a business is bound to face en route to becoming truly data-driven, it’s likely that every person in a company has little to no idea of what the concept of ‘culture’ actually means in a company, let alone what a data-driven culture looks or feels like.

And that’s why the process of transforming a culture to be data driven must begin with the end in mind. That, of course, begs the question: What is a data-driven culture? Unfortunately, there is no simple answer as every business is different and will have different culture parameters. However, it is relatively safe to say that, irrespective of how businesses look or work, their data-driven cultures will have a few things in common.

For one, a data-driven culture will be built on the broad recognition of data as a vital, strategically essential business asset; one that allows the business to make well-considered decisions based on facts and figures rather than on intuition or past experience. Having a data-driven culture will also mean that the business fully recognises and embraces the ability of data and its application to empower all employees to perform their functions much more effectively. And lastly, a business will know that it has completed its transformation to a data-driven culture when it is able to identify and align its technical and business challenges and leverage data to solve both together.

When you consider these factors as characteristics of a data-driven culture, it becomes obvious that being data-driven is not solely a technical strategy. So, while it is important to recruit skilled and talented data scientists and technology professionals to give physical effect to the data-driven vision, trying to become data-driven in isolation from the business and all its other employees is almost certainly a recipe for failure. Which brings me to the second obvious question that will, or at least should, be asked by every business that wants to be able to unlock the full potential of data as a transformative, business building asset. And that is: How do we do it?

This, too, is a simple question without a simple answer. Most of the global organisations that are considered to have succeeded in becoming data driven still admit to being in the learning phase when it comes to embedding a data-driven culture. FNB is no exception. But we remain committed to the process and, I believe, have gained some valuable insights into the steps that businesses, and especially financial services organisations, need to take to move closer towards achieving a data-driven culture.

The first of these is to start by transforming thinking. You need to get the entire leadership body to commit to supporting and promoting a data-driven culture. Even if very few of them understand what that means, a good first step is to simply get board and executive management agreement to being willing to embrace a culture of openness and collaboration.

Then, with that leadership support, start to communicate with the entire organisation to create an understanding of the meaning and value of being data driven, both for the company and its employees and customers. Ultimately, any shift in culture is only possible when culture is mainstreamed. It cannot be the domain or responsibility of HR. So, an organised and strategic education campaign is essential to explain the benefits that embracing a data-driven culture will provide.

The next step is to commit to democratising data. When employees have access to data, its impact becomes obvious. Break down silos and protectionism. Make data, and its analyses, readily available, understandable, and transparent across the organization.

Obviously, it’s dangerous to just give everyone in the organisation unfettered access to all its data, since they probably don’t have the skills or tools to make use of that data. And that’s where the real culture shift happens, or must happen. Businesses need to focus on building collaborative, multi-functional teams. While tech experts may understand the technology and systems, data is first and foremost a business asset. So a data-driven culture has to be driven by the business. And since it’s unlikely that you’re going to find too many employees with a balanced combination of business and data skills, you need to build your data-driven culture on collaborative teams in which every team member is willing to acknowledge what he or she doesn’t know, and work closely with teammates that do. This approach should also inform all future recruitment decisions. In a data-driven culture, you don’t recruit just for a vacancy, you recruit to make teams stronger.

Finally, be patient. Changing a company’s culture takes time, effort and commitment. Even when the leadership sets the example, the shift only happens through organic growth and evolution.

Realise that there are legacies that have to be changed. The technology legacy systems are actually the easy part because you can throw money at those. But human legacies around how things have always been done in the past are much more difficult to shift. But it must be done, because it is impossible to change to a data-driven culture if all your people are not willing to recognise and embrace data as a key success facilitator.

While the need to build these types of data-driven cultures is becoming increasingly obvious, the unexpected, and valuable, side effect of achieving such a culture is that it has the potential to massively enhance employee morale and productivity. That’s not just because data-based decisions are infinitely more effective than those based on hunches. It’s also because employees grow as people when the work they do has meaning.

Data has the ability to quantify the impact that each employee is having on the customers and the business. And when staff see the tangible value of the contributions they are making, they become far more connected to the company values and their own professional goals, and the result is incremental improvements in personal performance and, of course, bottom-line results.

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