Are South African retailers failing online? A recent study by the South African Council of Shopping Centres (SACSC) published by BusinessTech has revealed that South African retailers did little to advance their sub-par online shopping offerings in 2014. Issues emerging from the study are:
Reasons why South African retailers fail online
- There is a big gap between what retail customer’s expectations about their shopping are and what they are actually experience. Retailers do not deliver on the shopping experience expectations of their customers;
- Omni-channel retail which is the simultaneous use of two or more channels, like using a smartphone when shopping in a store, or watching TV and using a tablet, will be among the big challenges, and key opportunities, for South African retailers in 2015. The report noted that South African retailers’ multi-channel retail offerings were below par when compared with many of their international counterparts, which offer consumers higher-quality designer websites and online shopping.
- Almost 63% of shoppers research purchases online before buying in stores. “This supports growing evidence that a good online strategy and offering combines, not competes, with offline retail. E-commerce is helping physical stores and malls succeed,” the report said.
The online retail sector in South Africa has also major macro environmental issues that hinder their growth:
- Power outages – unannounced power cuts due to the bad infrastructure maintenance by ESKOM means that many people can’t go online;
- Ongoing labor actions – the South African postal service offers an important service by getting the products of SMEs to their online customers. The ongoing strikes of postal workers forced South African SMEs to use more expensive courier services;
- Rand: US dollar exchange rate – South African online retailers pay many Rand for products and delivery from overseas.
The issues mentioned here should be considered when online retailers do their strategic planning. Visit eBizplan to help you in this regard.