The end of 2015 and into 2016 has been incredibly challenging for most businesses in South Africa. Retailers and especially those that import overseas products and distribute to the local market have found the going tough. The declining (and undervalued) Rand is eroding margins severely. It's also no secret that the local consumer is under pressure. Personal debt is rising, wages are flat and inflation is outside of the target band set by the SARB.
It paints a very bleak picture overall.
So WHY are online retail sales (according to our stats and our customer data) growing exponentially year on year? It's tough to say exactly why and I won't delve into this too much here. The main reason is probably just – notwithtstanding the challenges consumers and retailers face in 2016 – that the South African consumer has caught up to the wonders of e-commerce. It's convenient, saves time, prevents frustration (arriving at a store and not finding what you need) and is safe and secure (I think the penny has finally dropped here).
With growth (in e-commerce), comes investment and here are a few trends and developments in e-commerce in 2016 that we have picked up on and are actively pursuing and executing (or have already executed) with our clients.
Omni Channel Commerce
This trend first reared its head in early 2015, but locally, it's taken some time to implement. Essentially, omni channel commerce is simply to blur the lines between online and brick 'n mortar shopping and making the experience seamless. It's important that it's seen as bi-directional; integrating physical stores into online and integrating online into the physical stores.
So how can this look? This is best explained by a few examples.
Integrating physical stores into online
- For one of our clients, we have put a touch screen kiosk into one of their stores at the Mall of Africa. Users can walk into the store and if they can't find what they are looking for in store, they can browse on the kiosk (and it's important that this kiosk is highly responsive and simple to use), add to cart, add their shipping address and checkout, print a slip, walk to the till and pay for the order – and have it delivered one or two days later.
- With our "Dolfin" clients, we have the ability to do real time looks ups for stock in a given store. An app could be built that can scan barcodes that does a real time stock lookup. Customers could walk the isles, scan a barcode and get stock availability in their size/colour, without asking a rep.
Integrating online into physical stores
- Using the same "find in store" technology mentioned above, before going into a store, customers can browse the website to find a product and look up stock availability for a specific size/colour. No disappointment when they arrive, only to find that there is no stock! This functionality can currently be seen on Sportsmans Warehouse.
- Click n Collect is probably the most obvious Omni Channel feature that most e-commerce enabled retailers should be looking at. It's used significantly overseas and not many local retailers have implemented this. In theory, it's simple. You place your order online and pay for it (or not) and then pick it up at your closest store (at which point you can pay; or not). While it sounds simple, for larger scale retailers, the logistics (for example around stock availability and sale attribution) are quite complex. Not impossible, but it just needs buy in at a companywide level (and store level) and a sufficiently "open" (e.g via an API) POS / stock management system.
Building a customer profile (CRM)
The challenge that most retailers have is that their shoppers shop anonymously (in a brick 'n mortar setting). You pick up your items, you pay and that's it. Totally anonymous. This is a big "loss" for marketers. Major ways of getting people to give you their details is via a loyalty system. I'm sure many have noticed how almost every retailer has implemented a loyalty system or is looking at doing so. Sure a primary reason for a loyalty programme is to entice repeat purchases, but an important secondary reason (and one that consumers are often unaware of) is so that companies can gather more user specific data at the till point and can start building a view of individual customers.
E-commerce of course does not have this challenge of having users shop anonymously. When purchasing, users give you all their details. The key, and the major trend we are seeing is to consolidate the customer data one receives (online, in store via the loyalty program, via service desks etc) into one single "view" of the customer.
Once customer profiles have been built, the options companies have for marketing increase significantly.
The above is a necessary condition for this final point. Without detailed, customer specific data, personalisation is impossible; and personalisation is possibly the main trend we are seeing in e-commerce. This goes directly against the "spray and pray" approach to marketing, that was (and still is) so ubiquitous.
The process should be to gather data and then segment. The holy grail of personalisation is to treat each individual as their own segment. Is this possible? Not really (unless you have a sky high budget). Is this necessary? Not really. Categorising customers into segments and then having a strategy for that segement is how personalisation is usually done.
A simple example is with regards to mailers. If you are a Capetonian, going to Yoga on a Thursday morning that thinks "the Beast" is a scary mythical creature, you will not want to receive a mailer about the latest rugby promo. The problem is that achieving this type of personalisation, without using an automated tool, is difficult and a LOT of work. Enter tools such as SharpSpring that let you send personalised emails, based on data / a person's profile and specific rules and triggers. The key to using tools such as this is to keep it relevant and not to over use it. Don't send more than people want to receive. When in doubt, send less. The same concept of personalisation can be applied to websites. If a user logs in, show promos and banners that correspond to their preference.
The personalisation of content is also an important part of this. Each article that is written should be categorised and tagged so that not only are users receiving communication where products and banners are personalised, but content as well; i.e. the content that is pushed to a user is relevant and interesting to them.
A final fourth trend that we're spotting is the fight by courier companies to capture the growing e-commerce market. Courier companies are competing on price, but predominantly on service, offering quicker delivery times, with some even giving e-commerce websites the ability to tell a customer whether the goods will arrive AM or PM.
While there are other trends in e-commece, these are the main ones we have picked up on in 2016 that we are actively working on implementing with our clients.
Did I miss anything? Send me a tweet @hagen00