No going back: Making e-commerce part of your business offering

From curated e-commerce platforms to improved shopping cart experiences, the way the world shops and buys has changed forever since the onset of the Covid-19 pandemic.

News headlines from this year have showed that the changing dynamics of the online marketplace is here to stay. South African e-commerce grew by 66% in 2020, outpacing earlier estimates due to lockdowns and a decline in brick-and-mortar retail sales, Business Insider reported. In 2021, online retail is expected to top R40 billion and account for 4% of all retail in South Africa, up from 1.4% in 2018.

The e-commerce boom signals the need for businesses to augment their business offering to adjust to the new normal, be it in the business-to-business or business-to-consumer spaces.

"During lockdown, we all discovered how easy we can shop online and there have been a number of research papers that show Covid-19 has changed the way we shop, live and buy," says Herman de Kock, executive head of sales and service at Nedbank Business Banking.

"We may not get to a new normal where there's only online shopping taking place per se – there will be room for a hybrid bricks-and-mortar model - but the data has showed that the uptake of e-commerce is not a once-off spike, and the preference to continue to shop online will remain."

For businesses, this presents an opportunity to add e-commerce functionality to their offering, or risk missing out.

E-commerce is the buying and selling of goods and services over the internet, conducted via computers, tablets, smartphones, and other smart devices.

Businesses face three major challenges in augmenting their traditional business models with these e-commerce capabilities, according to Tech Bullion.

For one, the rapid speed at which the technology is changing lends itself to businesses having to play “catch up” indefinitely. Locally, e-commerce revenue is expected to show a rapid annual growth rate of 8.16% in South Africa each year until 2025, according to Statista. Globally, the Nasdaq anticipates that 95% of purchases will be completed online by the year 2040.

Second, the speedy advances also potentially exposes customers to the increased risk of phishing scams. Businesses engaging e-commerce have to ensure the safety of their customers’ data while transacting online, as well as investing in security that can defend against malicious AI cyberattacks.

Third, one of the biggest indicators for either losing or retaining online customers is a positive user experience. Among the issues cited here include businesses not optimising their platform for mobile users, as well as a bad or tedious checkout experience. According to New Media and Marketing, the top 23 sites globally all gross over $1 billion per year, but have a 44% worse checkout user experience. At the average shopping cart abandonment rate of 68%, each of these sites could be losing $3 billion hypothetically.

"The biggest challenge now is to ensure that e-commerce links into your value chain, to ensure that your customer still has a seamless experience from the first click right through to delivery on their doorstep. It is to ensure that e-commerce is a seamless augmentation or addition to your business, not your strategy per se."

There are a number of technologies introduced that can help address these challenges, the first being progressive payment solutions. Nedbank Enterprise, for instance, is a system that can be fully integrated into a merchant’s website, eliminating the requirement to redirect customers to another site to make payments.

By eliminating the need to redirect customers to another site, this greatly improves user experience at the point of checkout, cited as one of the biggest reasons for the loss of online business. It also offers merchants piece of mind that the platform is backed by bank-grade security.

Another option available is signing up for a curated e-commerce platform that has built-in functionality, rather than investing in a single, expensive platform of your own.

For example, a super app like Avo, is a platform that enables any merchant to quickly and efficiently access an e-commerce value chain with relatively low investment. Through the app, businesses have access to a built-in market and more than 450 000 customers in new geographies.

"Avo brings customers and businesses together, accurately matching their lifestyle needs to product and service offerings through powerful artificial intelligence, safe and secure payments, and bank-grade security," says de Kock.

Curated platforms effectively do the heavy lifting for their merchants, so that their businesses can add e-commerce revenue as an additional income stream to their balance sheet.

And the experience is positive for customers, allowing them to purchase more than just one type of good in one place, catering for leisure, accommodation, products or services across a variety of categories.

By embracing the changes posed by the e-commerce boom, businesses stand to gain from an estimated annual industry growth rate of 8% over the next four years in South Africa.

For de Kock, the major point to acknowledge is that the pandemic, with all its traumas and changes, has been a sobering wake-up call for many businesses.

"It was also a catalyst for introspection into every business model. The new normal will not simply be a return to pre-pandemic ways. Business owners need to revisit their revenue models for the sake of staying relevant, and for the sake of the sustainability of their businesses, and e-commerce will play a very important part in this context."

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