Over the past 10 years, international competition for SA's media and entertainment industry from major online players has grown from a blip on the radar into a major threat.
The advent of affordable broadband and falling bandwidth prices over the past couple of years has increasingly made it viable and attractive for South African middle-class consumers to devour content and services from international media and entertainment retailers and service providers.
Unlike banks, telecoms service providers, or FMCG retailers, media and entertainment firms operate in an industry where there are few geographical, logistical or regulatory barriers to protect them from international competition.
Knowing better
There's little reason why a consumer can't order a DVD or a book from Amazon, use Google to aggregate news, or download a few songs in MP3 format from an online service. Compared to the local players, many international companies offer a broad selection of product, aggressive pricing, and personalised service based on Web 2.0 principles and technologies.
To compete, South African companies need to start investing in the functionality and features of their online sites. Companies such as Google and Facebook know more about South African consumers than most media companies do, and they're leveraging this knowledge to sell advertising.
Likewise, companies such as Amazon are closer to their South African customers than most local e-tailers in the entertainment space. Amazon can offer customers highly relevant and personalised recommendations, and has rich features, information and interactivity across its sites.
User-unfriendly
The functionality that most local players in this industry offer on their Web sites is anaemic and outdated.
John Ziniades is CEO of Consology.
By contrast, the functionality that most local players in this industry offer on their Web sites is anaemic and outdated. In short, the online experience that most large media and entertainment companies in SA offer is fragmented as well as thin on features and functionality.
Many sites lack even the most basic personalisation features, such as product recommendations. They often don't allow users to find out when an out-of-stock product will be in stock again.
If a user wants to change or cancel an order or account details, this will often need to be done via e-mail through a manual process, rather than allowing the user to carry the transaction out at the portal. It can often be difficult or impossible for a user to access basic historical information online.
Different competition
What's more, large media players often have little or no visibility into the way their customers interact with their various offerings, from the Internet, through to their print and broadcasting properties.
All of these shortcomings need to be addressed if companies want to remain competitive with the world-class competitors they're increasingly compared to.
Of course, there is no South African company that can compete with the resources of Google or Amazon, organisations that have massive technology budgets and huge teams of Internet development specialists working on their interfaces, databases and back-office systems.
Local companies instead need to look at packaged self-service solutions to help them integrate sophisticated functionality into their online offerings.
Self-service applications allow consumers to interact and transact with the companies they do business with when it is convenient for them using channels such as the Web, mobile, kiosks and interactive voice response.
Checking up
Electronic self-service channels allow companies to offer consistent and convenient service to their clients, which leads to more customer satisfaction and loyalty.
Other benefits of self-service include cost savings from automating transactions, reduction of customer-support costs, cross- and up-sell opportunities, and deflection of calls from the contact centre.
Self-service solutions allow companies to gain an integrated view of customer service and sales activity, and to offer a consistency of service that is generally not possible with the manual processes.
Media and entertainment companies need to start looking at these solutions as a way of reinvigorating their Web sites to compete with international players who are targeting their customers.
* John Ziniades is CEO of Consology.
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