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Online shopping leaps in SA

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A new MasterCard survey reveals 58% of highly active Internet users in South Africa shop online. World Wide Worx provided local industry context at the launch of the findings.

According to the latest MasterCard Worldwide Online Shopping Survey, online shopping has increased significantly in South Africa and continues to show potential for growth, with price, convenience and security key factors to consider making a purchasing decision.

The survey revealed that the number of South Africans shopping online has steadily increased over the past two years, with 58% of respondents in a survey of highly active Internet users saying that they use the Internet for shopping. This is an increase from the 53% that said that they shop online in 2010, and the 44% that gave the same answer in 2009.

When choosing an online retailer from where to make their purchases, the majority of respondents cited lower prices (91%), payment convenience (90%) and secure payment facilities (90%) as their main motivators for doing so. They also said that websites should have a good reputation, be user-friendly, and that the online retail provider of choice should offer low or no extra charges for delivery.

‚The numbers speak for themselves,‚ says Anna Jones, General Manager, South Africa, MasterCard Worldwide. ‚The latest MasterCard survey found that among those shopping online, a majority 89% of respondents are satisfied with their overall online shopping experience, with 73% likely to make a purchase in the next six months. While these responses have remained static since last year, they show that the level of satisfaction has remained consistent as the number of online shoppers has grown.‚

The survey, which serves as a benchmark that measures consumers’ propensity to shop online, was conducted across 25 markets between 5 December 2011 and 6 January 2012. The South African report surveyed banked consumers who access the Internet at least once a week. They were asked questions about their online shopping habits.

‚The findings back up our research into the way online shopping evolves,‚ says Arthur Goldstuck, MD of World Wide Worx, which conducts annual studies on the size of the online retail market. Goldstuck provided local industry context at the launch of the findings.

‚We have shown that, once people are experienced Internet users and go online regularly, their propensity to shop online increases dramatically,” he said. “”The key is to convert that propensity into shopping behaviour, and this survey pinpoints where and why that conversion is happening.‚

South Africans who shop online do so because they find it convenient and easy, and that the wide range of goods available is appealing. They also look to online portals to research purchases they are planning on making with 78% of online shoppers saying that they look at online reviews before they purchase, while 73% said that they investigate online reviews of the retailer themselves before making a purchase. In a show of confidence for the online retail environment, 74% of respondents said that they would return to an online retailer from which they had already made a purchase.

Among the most popular purchases made online were products and services related to coupon/deal sites, online gaming, applications, music downloads and tickets to arts or music events.

Ninety-five percent of respondents mentioned that they had visited deal or coupon websites, which have made a noisy entrance onto the local online environment since the last survey was conducted. One quarter of visits to these sites ended in the purchase of a deal.

‚This shows how the online world can work in tandem with the bricks-and-mortar environment, with online spend driving spend with conventional outlets,‚ says Goldstuck. ‚Many people now conduct product research online before making a purchase in-store. Retailers that avoid the virtual option for fear of cannibalisation of customers are in fact missing out on a powerful driver of traffic through their physical stores.‚

The research also revealed increases in the number of people who are shopping online (versus offline) for travel purposes: 87% of respondents (up 10% from 2010) have made purchases from airlines and 71% (up 9% from 2010) have made hotel bookings online in the last three months.

On the opposite side of the coin, South Africans revealed that they prefer not to shop online for their groceries, with only 9% making this their first choice to avoid the chore of grocery shopping. This is a decrease to the previous survey’s result of 27%, showing a18% decline.

‚We’ve also found that online grocery shopping has declined , mainly because people want to choose fresh products personally, delivery schedules are too inflexible and too many mistakes are made by in-store stock pickers,‚ says Goldstuck.

When it comes to paying for online purchases, the majority of respondents (84%) use payment cards or EFTs or a combination thereof. Encouragingly, security is less of an issue than it has been in the past years with 38% of respondents saying that they are not convinced that the medium is safe. This is down from 47% in the last survey, which itself was a drop from the 59% of the 2009 results.

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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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