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Johannesburg – South African online consumers have ranked Kalahari as the online retailer providing the best customer experience, according to online research company Columinate's Online Retail SITEisfaction Survey.
In second place was Yuppiechef, third Woolworths, fourth Takealot.com and Groupon in fifth place.
The research study was commissioned to better understand what South African consumers are buying online, who they are buying it from and their level of satisfaction with online retailers.
When shoppers were prompted about why they like shopping online, references to "convenience" and "saving time and money" were top of mind.
However, the data revealed that consumers might not be as rational about their motivations for online retail therapy as they think.
About 64% of online purchases were made within the "wants" category, including travel, music, books, games, DVDs and event tickets, whereas only 36% of purchases were made on "essential" goods such as groceries, clothes and health supplies.
This is very different to total (online and offline) spending habits, where bigger portions were spent on essentials for these same range of items.
“People believe that they purchase online to save time and money, but with purchases being skewed towards non-essential items, the report indicates that "saving" isn’t necessarily the main driver,” said Columnate CEO Henk Pretorius.
“This creates an opportunity for online retailers to increase sales in the 'needs segment'. Online retailers should focus on promoting the time and money that consumers can truly save by purchasing essential items online."
For example, buying a DVD online may save a few minutes in a mall, but buying the week’s groceries online could save one an hour or more.
Price a main reason
About 77% of respondents claimed that they had placed items in their online shopping cart, but left the site before checking out.
The main reasons stated for not following through with the purchase were linked to price (29%) and the consumer changing their mind (21%).
Consumers cited reasons such as “I realised I was being impulsive” or “I realised I didn’t need it”, to explain why they abandoned their online cart.
Only 7% cited delivery or payment method issues as a barrier to online shopping.
The next frontier
Looking ahead at the future of the industry, Pretorius identified "mobile-readiness" as an opportunity for the industry.
“Considering the growth in smartphones and app usage in South Africa over the last year, a surprising result from the survey is the lack of mobile impact in the digital shopping space," said Pretorius.
"There is both a lack of stores that offer shopping apps, as well as a lack of usage of the apps currently available."
He said there is definitely more to be done in this space if stores want to fully engage shoppers and create on-the-go shopping opportunities for consumers.
Mobile and tablet apps are a promising area of focus for all retailers, he recommended.
Online shopping channel a must
Pretorius warned against thinking of online shopping as something that is optional.
“All indicators point to an increase in the size of the online retail market in South Africa and recent investments from both local and global players have confirmed the intention for growth in the industry,” he said.
“Traditional offline retailers need to embrace this trend. Dedicated online stores such as Yuppiechef, Kalahari and Takealot are well placed to take a chunk of consumers’ total spend on non-essential items."
Items such as grocery shopping, health supplies and cosmetics also show promise, as less than 50% of consumers indicated that these are items they need to see or touch before purchasing them online.
"As such, these online-only retailers could pose a significant threat to traditional stores if they branch out into ‘needs’ segments,” said Pretorius.
* Fin24 and Kalahari are both in the Naspers stable.
In second place was Yuppiechef, third Woolworths, fourth Takealot.com and Groupon in fifth place.
The research study was commissioned to better understand what South African consumers are buying online, who they are buying it from and their level of satisfaction with online retailers.
When shoppers were prompted about why they like shopping online, references to "convenience" and "saving time and money" were top of mind.
However, the data revealed that consumers might not be as rational about their motivations for online retail therapy as they think.
About 64% of online purchases were made within the "wants" category, including travel, music, books, games, DVDs and event tickets, whereas only 36% of purchases were made on "essential" goods such as groceries, clothes and health supplies.
This is very different to total (online and offline) spending habits, where bigger portions were spent on essentials for these same range of items.
“People believe that they purchase online to save time and money, but with purchases being skewed towards non-essential items, the report indicates that "saving" isn’t necessarily the main driver,” said Columnate CEO Henk Pretorius.
“This creates an opportunity for online retailers to increase sales in the 'needs segment'. Online retailers should focus on promoting the time and money that consumers can truly save by purchasing essential items online."
For example, buying a DVD online may save a few minutes in a mall, but buying the week’s groceries online could save one an hour or more.
Price a main reason
About 77% of respondents claimed that they had placed items in their online shopping cart, but left the site before checking out.
The main reasons stated for not following through with the purchase were linked to price (29%) and the consumer changing their mind (21%).
Consumers cited reasons such as “I realised I was being impulsive” or “I realised I didn’t need it”, to explain why they abandoned their online cart.
Only 7% cited delivery or payment method issues as a barrier to online shopping.
The next frontier
Looking ahead at the future of the industry, Pretorius identified "mobile-readiness" as an opportunity for the industry.
“Considering the growth in smartphones and app usage in South Africa over the last year, a surprising result from the survey is the lack of mobile impact in the digital shopping space," said Pretorius.
"There is both a lack of stores that offer shopping apps, as well as a lack of usage of the apps currently available."
He said there is definitely more to be done in this space if stores want to fully engage shoppers and create on-the-go shopping opportunities for consumers.
Mobile and tablet apps are a promising area of focus for all retailers, he recommended.
Online shopping channel a must
Pretorius warned against thinking of online shopping as something that is optional.
“All indicators point to an increase in the size of the online retail market in South Africa and recent investments from both local and global players have confirmed the intention for growth in the industry,” he said.
“Traditional offline retailers need to embrace this trend. Dedicated online stores such as Yuppiechef, Kalahari and Takealot are well placed to take a chunk of consumers’ total spend on non-essential items."
Items such as grocery shopping, health supplies and cosmetics also show promise, as less than 50% of consumers indicated that these are items they need to see or touch before purchasing them online.
"As such, these online-only retailers could pose a significant threat to traditional stores if they branch out into ‘needs’ segments,” said Pretorius.
* Fin24 and Kalahari are both in the Naspers stable.
