Season set for e-shopping spurt

The steadily growing phenomenon of e-commerce becomes particularly pertinent at this time of year, when scores of consumers are single-minded in their purpose to shop and spend.

Analysts and e-tailers alike are of the opinion that this year's festive season will see little deviation from the trend of a consumerism shift in favour of virtual procurement.

Liz Hillock, head of marketing at SA's largest online retailer, Kalahari.com, says that, while South Africans may still feel the effects of the recession, compelling reasons - including competitive prices and door-to-door delivery - preserve the online shopper's presence.

Economic slump aside, online traffic shows no sign of slowing down. On the contrary, June saw Kalahari.com reaching the record milestone of one million online shoppers. Similarly, Jaco Jonker, CEO of SA's largest online marketplace, BidorBuy, says the company expects over a million people per month to visit its site to browse for gifts and related products during the festive season. “Even though growth in general retail spend looks rather bleak, we expect year-on-year growth in excess of 30%.”

Kim Reid, CEO of e-tailer Takealot, says the popularity and rapid growth of online shopping can be attributed to the fact that it allows the customer to research the product and then make an informed buying decision. Reid says also driving online expenditure are added benefits such as ease of use, wider choice and more control over decision-making.

According to industry sources, online shoppers are leaning increasingly towards consumer electronics, with apparel also ranking high on the popularity list in terms of items purchased.

Hillock says that, while traditionally media items such as books, movies and CDs have been most popular, the last 18 months have seen unprecedented growth in electronics. “This trend will certainly continue this festive season, which is a positive sign that South Africans are becoming more savvy when it comes to shopping online, and trust that high-value items, such as TVs, iPads and computers, will be delivered safely to their door.”

She says the e-tailer has also seen a spike in digital content. “Kalahari.com has over 350 000 local and international e-books listed and we have seen a 100% growth in the last six months alone. Our gobii eReader, the first eReader in SA to retail for under R900, literally sold out within the first 21 days of launch, in August. It is set to be one of our top stocking-fillers this season.”

BidorBuy's Jonker likewise says there is a definite trend towards electronic goods such as phones, laptops and tablets. “It is also very interesting to note that consumers also spend their money on clothing, shoes and various products for the home, such as home d'ecor items, furniture and appliances.”

MD of World Wide Worx Arthur Goldstuck says in a study done by the technology research company on the subject of online retail this year, respondents were asked to indicate which categories of products were available on their Web sites. “Most sites gave more than one category, making it possible to gauge the popularity of specific products according to the number of sites that make these available.”

Goldstuck says apparel was the single category reported by most online retailers in SA, although this was only 16% of respondents.

“The next group of categories, including laptops, computers, cellphones, printers, and multifunction devices, would cumulatively surpass apparel.”

Goldstuck says a significant surge is expected in online activity by 2013. “The critical period for people starting to invest in online activity is five years. Since the initial surge in Internet users came in 2008, we extrapolate that in two years' time a spike in online buying will be at hand.”

“Even as traditional retail sales fell in 2009, in response to the worldwide recession, global online retail sales grew by 14.5% in 2009, to $348.6 billion. The biggest contributor was electronics, making up about 22.6% of the market.”

There are currently over 1 000 retail Web sites in the South African cyberspace. Several factors, says Goldstuck, drive the eminence of online retail in general in SA, including a prevalent shift in consumer preference, increase in online population and the growing phenomenon of social media.

The World Wide Worx online retail report further presented the Digital Participation Curve, which demonstrates that “a powerful relationship exists between the length of time an individual has been on the Internet and that individual's willingness to bank online, shop online, engage in social media and specialised social networks, and generally strive for online actualisation of interaction”.

According to Gartner analysts, the future of e-commerce is steeped significantly in companies' social presence and mobile applications. This was discussed in detail at the Gartner Symposium/Itxpo, in Orlando, last week. “As the number of mobile phones overtakes PCs, customers will use mobile browsers and applications as the main points of interaction.”

Research VP at Gartner Gene Alvarez said e-commerce organisations will have to take heed of the emergence of mobile shopping. “[The organisations] will need to scale up their operations to handle the increased visitation loads resulting from customers not having to wait until they are in front of a PC to obtain answers to questions or place orders.

“In time, e-commerce vendors will begin to offer context-aware mobile shopping solutions as part of their overall Web sales offerings.”

Alvarez adds that, in light of customers clamouring for new and easy ways to interact with the organisations they deal with, no company should think itself immune to this new business dynamic.

“As more people use smartphones, they will expect an extension of their customer experience to be supported by this kind of device while demanding that social aspects of the Web be intertwined with this experience.”

Goldstuck says it has been long-awaited, but smartphones are now entering the retail arena. “Considering that smartphone shipments are expected to overtake other phones in SA by 2013, and that this is a global trend, the capabilities of these phones will have a major impact on retail in the future.

“Already, customers can make payments, order online on the phone, check inventories, and research product information.”

He proposes that consequently, retail Web sites and applications are being formatted for mobile access, led by major brands like Wal-mart, eBay and Amazon. “QRC, or Quick Response Codes, allow a phone user to scan a product bar code and find price comparison at other stores. Other shopping apps include mall maps integrated with gift-giving guides that generate a list of stockists near the user.

“Consumers' own mobile technology opens the way for messaging that can be targeted using the customer preferences, and thus adds value to retailers. Many retailers will, as a result, be playing catch-up, since the consumer is already ahead of them in regard to mobile adoption.”