Publications
Partners
Cape Town - After many years hovering around the 1%-mark, Spree predicts online shopping’s share of total retail sales in South Africa will increase exponentially over the next three years, rising to about 4% by 2021.
According to the online fashion retailer, barriers to entry such as lack of internet access and limited online payment methods are rapidly being overcome. There are also great improvements in the experience and convenience of online shopping that will draw shoppers online.
Vincent Hoogduijn, CEO of e-commerce at Media24, the company that owns Spree, says growth figures have been exponential for their online fashion business.
“In mid-2017, total sales at Spree were up 88% year-on-year, sales on the shopping app more than doubled and daily transactions increased by 76%. If this growth continues and is mirrored by other players we will see online retail gaining serious ground and growing market share measurably over the next couple of years,” he said.
Hoogduijn added that South African shopping trends often follow big global ones.
“Globally, online retail currently stands at 11% of all retail sales with China coming in well over 20% and large markets such as the UK and Germany standing at 18% and 11% respectively,” according to the Centre for Retail Research, Emarketer and Internetretailer.
Hoogduijn’s top reasons why online retail will see its potential realised in SA over the next few years:
Barriers have fallen
New research from #AfterAccess showed that 55.5% of South Africans now have a smartphone – and this figure is rising steadily. So the connectivity gap is no longer a major barrier.
Many South Africans leapfrogged the desktop stage straight to mobile, so the growing penetration of smartphones is likely to deliver a big boost for online retail.
Technological advancements and an increasingly digital lifestyle also help to break down barriers such as lack of trust in delivery and payment, as multiple digital payment options - and even digital credit - are now being offered.
Tech helps to create best lives
Shopping is increasingly about personalisation, with machine learning building up a psychographic profile of every customer at a granular level and suggesting products accordingly.
For example, Spree has introduced a fashion image search feature. This functionality allows shoppers to upload a photo in the Spree app, which then suggests visually similar items.
In the US, drone deliveries and smart distribution tech are already reducing a three-day delivery time to three hours. Next to faster and more accurate deliveries, SA is likely to see at least some local deliveries arriving by drones in 2021.
The mall will embrace digital too
The way consumers shop at a mall is likely to evolve as physical and online shops increasingly work in tandem. More and more shops in malls will be shop fronts with limited stock – essentially more a brand presence than a store.
Shoppers will browse there but want to buy online. This will mean that even mall shoppers will be making purchases online, demystifying the process.
Creative delivery
Increased variety in the online retail space and novel ways of approaching this will also help grow the sector. Media24’s e-commerce division capitalises, for instance, on synergies between media and e-commerce.
* Fin24 and Spree are both part of Media24.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
