eCommerce revs up
by Louise Burgers. eCommerce sites are now allowed to trade in South Africa under lockdown level 4 restrictions; and are gearing up to restart after not being allowed to trade for seven weeks.
by Louise Burgers. eCommerce sites are now allowed to trade in South Africa under lockdown level 4 restrictions; and are gearing up to restart after not being allowed to trade in most goods for seven weeks. Online retailers may now sell all goods except alcohol and any and all tobacco products – but must adhere to strict protocols to stop the spread of COVID-19; as well as promoting local goods. Government made the announcement of a relaxation of ecommerce regulations yesterday, May 14; and also mandated online retailers to provide for as many different payment options as possible – paving the way for consumers without credit cards or online payment access, to also benefit from this move to online shopping.
There is no doubt that these moves will kickstart ecommerce properly in South Africa, as it has in other economies across the globe, given that South Africa was the only country that prevented ecommerce from trading under hard lockdown. Comment from online retailers was overwhelmingly positive of course. In an interview with e-tailer Peter Barlow this morning, he was run off his feet getting orders out and restarting his online gift store, Nifty Gifts. He told Retailing Africa it was all hands on deck to fulfil orders. “We are naturally ecstatic that the government has come to their senses as we were the only country in the world to restrict ecommerce during this difficult time. We are just perplexed that it took so long. The time for ecommerce in South Africa is now; and we encourage all independent retailers who have not gone online to do so and continue trading.”
Laurian Venter, director at etailer OneDayOnly, said in a statement that the news of regulations being lifted was music to not only etailers’ ears, but also the industries that ecommerce supports. “Ecommerce has a much wider reach than one often thinks, in that it always supports three industries: small and medium (and sometimes large) businesses that do not sell directly to the end user or supply any one retailer; a subsection of the transport industry through courier companies; and many small companies that have lost their physical shops as a result of the COVID-19 lockdown.
“By opening up unrestricted ecommerce trading, with very clear safety guidelines for sanitation and contact of course, salaries will now be able to be paid and countless more families can be provided for. We can now breathe some life back into a broken economy amidst these most uncertain of economic times,” Venter said.
In the new regulations published yesterday in the Government Gazette on ecommerce, Government finally acknowledged this: “eCommerce can be a critical enabler to opening the economy through contactless transactions, which can reduce the movement of consumers, and the density of shoppers in retail spaces. Further it can accelerate innovation, support local manufacturing and increase access by the informal market and poorer South Africans. eCommerce is an important retail platform; however appropriate health and safety protocols need to be put in place which can allow the full ecommerce supply chain to operate safely while mitigating the risk of it becoming a vector for transmission of the coronavirus. Greater levels of ecommerce for goods that are normally not for sale in retail stores, can introduce increased health risks by greater movement of courier or delivery service personnel, and hence health and safety protocols are important to mitigate this risk.”
And Government has insisted that all South Africans need to benefit from opening up ecommerce, not just an elite few. Safety and hygiene protocols have also been carefully laid out that both etailers, courier companies and consumers receiving the goods, must all adhere to. These are the key takeouts from the Government Gazette, published May 14, 2020, verbatim:
- In order to limit the social and economic hardship caused by the pandemic on local industries and enable consumer choice to support local producers, retailers must give prominence to those goods which are manufactured in the Republic of South Africa.
- A “courier or delivery service” means a company, an employee of that company or a person who delivers goods from one place or person to another place or person; and may include the delivery divisions of retailers and delivery services set up by spaza shops and informal traders.
- Retailers must provide for as many payment options as possible for consumers, that are based on reducing risks of transmission, and enabling poorer consumers to access delivery services.
- When packaging goods, retailers must provide written guidelines for customers on how to safely disinfect their goods before use.
- Retailers must put in place collection protocols to ensure that adequate social distancing is maintained by courier or delivery service personnel when collecting goods from a warehouse or depot.
- All goods must be sanitised, in line with the guidelines published by the National Department of Health, before leaving the warehouse or depot.
Contactless payment solutions
What will aid the ecommerce sector, is that South Africa is also ready for contactless payment solutions as a Mastercard study released today, May 15, 2020, has found. In the Mastercard global consumer study, 75% of South African consumers have already made the move to contactless payments for everyday purchases, actively seeking touch-free payment experiences. In South Africa, the number of contactless transactions grew by thirteen times in March 2020 alone; compared to March 2019 in the grocery and pharmacy categories, where many day-to-day essentials are being purchased. In fact, 88% of South African respondents view contactless as a cleaner way to pay, with 71% preferring to shop at merchants where contactless is accepted. Consumer polling by Mastercard, which studied changing consumer behaviours in 19 countries around the world, including South Africa, shows rapid adoption of sustained contactless payment methods.
“The act of buying every day supplies such as eggs, toilet paper, medicine and other necessities has changed dramatically, with shoppers having to adjust to social distancing measures and other new challenges,” said Mark Elliott, division president for Mastercard, Southern Africa. “According to the new Mastercard study, this shift in behaviour is particularly clear at checkout as people express a desire for contactless and voice concerns over cleanliness and safety at the point of sale.” The pandemic has been a “tipping point” for contactless payment and global Mastercard data reveals over 40% growth in contactless transactions globally in the first quarter of 2020. Also significant, is that 80% of contactless transactions are under $25, a range that is typically dominated by cash, Mastercard reported.
Concerns also centre around the use of cash, as data reveals that: “The disruption has led to increased concern from consumers on cash usage and positive perceptions towards contactless due to the peace of mind that it provides. Forty four percent of South African respondents said they have reduced their use of cash while 20% say that they do not use cash at all since the pandemic began; 87% of South African respondents are concerned about the cleanliness of signature or touch pads; and the majority (88 percent), view contactless as the cleaner way to pay. Furthermore, 79% say contactless payments are faster than cash, enabling customers to get in and out of stores quicker.
CASE STUDY: Getting started online
Nifty Gifts’ Peter Barlow took the time to write a detailed list in a Twitter thread @PeterBarlows, to assist smaller retailers in opening an online store and becoming successful ecommerce retailers. Barlow operates on the Shopify platform. A serial entrepreneur, he has campaigned for ecommerce to open up under lockdown, along with other ecommerce sites; is the cofounder of @authorsecret_; and NiftyGifts.co.za, an online store selling unusual gifts and experiences. Entitled, A few things I have learned in the 3 months of running an online store, this is the advice he has – some of it will apply to the larger retailers too, with their online storefronts as they battle to keep up with customer demand and deliveries:
- The best time to start is now! I waited three years and although I set about learning as much as I could about ecommerce during that time I still wish I had launched sooner.
- Speaking of learning, there is always something more to learn. Never stop learning. Start here: @shopifypodcast.
- A platform like @shopify is an amazing platform. It makes setting up and running the store an absolute breeze.
- I like packing orders. Trying to fit things into the smallest box possible is like a puzzle.
- People don’t like to read. I put up a banner on the site telling visitors what shipping costs are and I still get folk trying to check out with tiny items.
- Adding live chat to the site has been one of the biggest drivers of sales for us. People buy from people and building trust is paramount. Being able to chat to a real human is the tipping point for a lot of customers.
- Abandoned carts are a fact of life. They still make me sad through. It is essential you set up a good abandoned cart sequence. I recommend @getconversio for this.
- In spite of what the naysayers are spouting; Facebook ads are still highly effective. We managed to squeeze R150,000 (around $9000) from Facebook ads alone on the store during November/December. Not bad for a new store from a standing start.
- You need a phone number on the store to get accepted into Google Shopping.
- Returns and refunds are a fact of life. Get them done quickly and efficiently with as little drama as possible.
- It’s a cliché, but every customer complaint is an opportunity to turn what could be a bad situation into a good one. Remain calm.
- Speaking of trust, reviews work! Make sure you are asking for them. Get @getconversio to help you here too.
- You know what else builds trust? Good communication. Delayed shipment? Tell the customer. Item out of stock? Tell the customer.
- I wish we could use the South African Post Office to send parcels, but they are too useless.
- Couriers in South Africa mostly suck. Find one that fits your budget and that you can tolerate. Having said that, we have been surprised by Fastway.
*Updated to include further comment from online retailers on Friday, May 15, 2020.
Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.
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