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Online thrills

E-commerce start-ups are looking to woo consumers with new experiences and close communities.

By Simon Cashmore
Johannesburg, 12 Aug 2015
Mike Eilertsen
Mike Eilertsen

Lifestyle publisher Mike Eilertsen is looking to raise the pulse rate of South African consumers and marketers. His VaultLife online platform offers shoppers the thrill of online gaming, together with the chance of buying an array of luxury goods at bargain prices. Marketers get an eager audience for their brands, valuable real-time consumer information and potential online sales.

"We have a big catalogue of products full of great brands," enthuses Eilertsen, CEO at VaultLife. They include Radisson Blu hotels, Cruises International and BlackBerry. Founder of lifestyle magazine Live Out Loud, Eilertsen launched VaultLife early this year. He reckons the new service will attract support from both consumers and marketers.

Eager audience

VaultLife offers several forms of high-speed interactive games with big-ticket rewards. Typically, consumers registered with the service are alerted online that an item they're keen to acquire will soon be contested. The first person to respond correctly once the challenge begins, by answering a set of questions, for example, wins the contest and gets the prize. The other contestants are then offered the same or similar product at a low price - but they must take up the offer quickly. They only have five minutes to make the purchase. Successful participants need quick wits, an eye for a bargain and the determination of a seasoned shopper at the department store sales.

Tapping demand

VaultLife is tapping an increasing demand among online consumers for a heightened experience and community. Early entrants to the e-commerce sector built their businesses by providing customers with low prices, a wide selection of products and the convenience of shopping from home. Consumers now want more.

If we can offer our customers a trusted community where we are constantly adding value, they will chose to shop with us.

Gary Novitzkas, Juniva

Keen prices, a wide range of products and quick deliveries are standard today, says Juniva CEO Gary Novitzkas. "New e-commerce firms need to specialise on specific vertical markets and provide something general online retailers can't because of their broad focus," he adds. Launched late last year, Juniva is pitching at the fast-growing health, wellness and fitness market. Novitzkas, a former CEO at local e-commerce giant Kalahari, says Juniva strives to create and sustain a community of people dedicated to health and fitness. "We believe that if we can offer our customers a trusted community where we're constantly adding value, they will chose to shop with us," he says. Juniva provides customers with a variety of educational services, including information and advice from health professionals, ongoing motivational initiatives to encourage clients to 'get off the coach and get fi t' and convenient purchasing facilities for items such as vitamins, health supplements and sports nutrition products. "We want to help people make informed choices about the health products they purchase for themselves and their families," says Novitzkas.

Buying online

Service remains an essential component of successful e-commerce businesses, says Luke Jedeikin, MD at online fashion retailer Superbalist. "If a customer believes they can trust you, they will keep buying from you," he says. Jedeikin points out that in the US, the world's biggest e-commerce market, consumers have a huge choice of online retailers, but most of them only shop at around seven sites. "Research shows that US shoppers tend to support a specific online store for each of their different needs. They'll buy from one utility store, from one fashion site and so on. If they're happy with the service, they'll stay," he says. Sustaining long-term customer relationships is essential for e-commerce firms because initial sales only cover up-front customer acquisition costs, says Jedeikin. "Profits come from subsequent sales," he adds. Superbalist, initially founded as Citymob in 2010, has built a strong online following by providing well-heeled young consumers with a choice range of designer clothing, accessories, artworks and household goods. "Our policy of free shipping and free returns helps build trust among our clients," says Jedeikin. He adds that customers who have successfully returned goods often become the most loyal clients. "They know they won't be penalised if they don't like the product they've bought or if it doesn't fit," he says. Trust in the supplier, together with engagement in the company's ongoing story or conversation with customers, creates a strong sense of community and powerful brand loyalty, says Jedeikin. Long-term relationships are often the most rewarding.

The experience of community delivered by Juniva goes beyond the company's website. It uses several social media platforms to communicate with clients, encourages customers to engage with each other and motivates clients and staff to participate in leading sports and endurance events.

Online communities that promote specific leisure activities or special interests are becoming increasingly popular among South African consumers, says Neil Watson, MD at e-commerce service provider Digital Planet. "To become successful long-term businesses, these sites need a clear value proposition that offers consumers more than just great prices. They have to offer something not easily available elsewhere," he says.

Digital Planet provides e-commerce development, management and operations services. It also operates virtual stores and online loyalty programmes for clients such as HP, Discovery and First National Bank.

"The e-commerce business is exploding. The experience online retailers provide customers and the way they manage clients will have a big influence on revenue growth," says Watson.

Online platform VaultLife is looking to attract clients beyond South Africa. Eilertson plans to launch the business in 27 cities around the world this year. "We'll either hit it big or not at all," he says. If Eilertsen gets it right, VaultLife will certainly provide him with the experience of a lifetime. An attentive community will surely follow.

This article was first published in Brainstorm magazine. Click here to read the complete article at the Brainstorm website.

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