Ecommerce is the future and businesses, large and small, will have to pivot


Most of us don’t want to talk about it anymore – the two years when Covid-19 disrupted our lives and left an indelible mark on our psyche and the way we do things. However, the impact of those years permeates our current lives.

While the pandemic harmed many businesses and crippled others, eCommerce received a boost as locked-down South Africans had to turn to online shopping to get what they needed.

According to a study done by World Wide Worx, South African eCommerce grew by 66% in 2020. A survey conducted by Deloitte during that time established that over 70% of respondents shop online at least once a month.

So, SA shoppers entered the digital storefronts in 2020 and 2021 – and most of them have never left.

“Online shopping was present in South Africa before Covid hit, but then it completely shot up and businesses had to pivot, otherwise they would have become irrelevant,” says Pascalle Albrecht, National Head, CCI (Commercial Card Issuing) and Acquiring Sales Strategy, Nedbank.

Nedbank sees eCommerce as a facet of the broader theme of digital, and therefore believes that it needs to partner with its clients (shoppers and merchants) to ensure that they have ease of use along every step of the digital journey.

Albrecht highlights four trends in eCommerce the bank is tracking and actively helping its clients navigate.

1. Client-centricity

Businesses must understand their clients and how they want to interact. This, says Albrecht, is non-negotiable. With the continued shift towards online shopping, this means businesses need to offer the best possible digital experience to their clients.

“eCommerce presents a host of opportunities,” she adds. “It allows businesses to reach new clients, introduce more products and find new ways to transact.”

2. The platform economy

According to research and consulting firm McKinsey, approximately 98% of all businesses in South Africa are small or medium enterprises. These businesses won’t necessarily have the capital to invest in establishing their own online eCommerce platforms and compete successfully.

“A lot of smaller businesses don’t have the funds to enter this complex and costly world on their own,” says Albrecht. “So what we see them doing is tapping into larger platform economy websites. This way, they can enjoy the benefits at a fraction of the price.”

Nedbank has established its own platform via the AVO super app, which connects consumers and businesses on one digital platform and offers a range of online shopping experiences.

3. Big data is still a thing

“We believe data rules all,” says Albrecht. “This is probably one of the biggest benefits of eCommerce; it allows a business to gather the data that will help it drive revenue and truly understand the client experience that its customers want and need.”

Nedbank offers its clients a product called Market Edge, a web-based tool that helps analyse the data gathered online to give clients a competitive edge. It is helpful to any business that wants to view consumers’ transaction histories and use this information to improve product development and make changes to their user journeys to achieve better sales.

4. Payments – keeping it simple

As the world adapts and technology develops, the acceptance of online payments has increased.

“Key players in the payments world are investing a lot of money in making sure that payments are sleeker, faster, more cost-effective and secure,” says Albrecht.

Increasingly, payment providers are offering software that can integrate with clients’ eCommerce sites. This means customers don’t have to navigate away from the site they are shopping on to make payments, keeping everything inhouse and secure.

“It builds trust and is convenient,” says Albrecht.

Cyber security and the Eskom factor

It’s not all sunshine and roses in the digital world. A very real challenge in South Africa is the increasing unreliability of grid-provided electricity, which also heightens the chances of not having steady data connectivity.

“Businesses in South Africa need to figure out how they can bring digital solutions to their clients without having to worry about data and power,” says Albrecht.

Nedbank’s Money app does not require data, she says.

The bank is also offering innovative financing solutions to businesses that want to turn to solar power generation to enable them to become less dependent on the state-owned power utility.

A second challenge Albrecht highlights is that of cybersecurity. She advises all businesses that have an eCommerce presence to make sure they have a cyber breach response plan and the necessary protections in place.

“Businesses are under immense scrutiny regarding how they are keeping clients’ data safe. It is non-negotiable if you want to play in this space.”

Let’s get phygital

In the last year or so the phrase ‘phygital’, originally coined by an Australian agency in 2013, has gained some prominence.

In the retail space it refers to finding the balance between offering a tangible, physical contact experience for your customers, but still living and breathing in the digital world.

“There will always be people, for example bank customers, who want to go to the branch and talk to someone,” says Albrecht. “You also have younger generations who would rather chat with a bot. Merchants need to understand what their clients want and find ways to offer all of that.”

Kelsey Robinson, a senior partner at McKinsey, explains the ‘phygital integration’ experience and what it could look like in the future as follows: “For a customer walking into a store in 2030, I think it will feel really integrated — meaning, affirmations from social media or friends and family who aren’t even near me will somehow be integrated into that store.”

Albrecht confirms that this integration and move towards digital is inevitable.

“If you think that in the future 90% of your market wants to be in a physical store, when in fact 90% of the future market wants to engage via WhatsApp, you are going to lose out on that opportunity,” she says. “Someone else is going to come and eat your lunch.”

Brought to you by Nedbank Commercial Banking.

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