Massmart’s ecommerce strategy
In 2021 Massmart announced a renewed and more aggressive commitment to ecommerce as a strategic growth vector. A number of key actions were undertaken to drive this, beginning with Sylvester John joining the local team. Sylvester was an integral part of the Walmart US team that had been responsible for accelerating the growth of Walmart’s ecommerce presence in the United States, largely through the launch of online groceries in 2016.
Several key milestones were achieved under Sylvester’s leadership last year, including the acquisition of OneCart, increasing the ownership stake in last-mile delivery partner, Wumdrop to 100%, and the launch of mini-programmes for Makro and Builders on VodaPay, serving as the cornerstone of the shopping section of the Super App.
Ecommerce.co.za sat down with Sylvester to discuss Massmart’s key strategic areas, and what other businesses can learn from the retail giant’s online retail journey.
What is Massmart’s ecommerce history?
Massmart’s ecommerce journey was kick started in 2014 on the makro.co.za website, which was later followed by the launch of transactional websites for Game and Builders. Massmart’s current ecommerce presence caters to a wide range of retail and business customers, offering products stocked in-store and from third-party marketplace sellers.
What are Massmart’s ecommerce strategic focus areas?
We have four key areas of focus as part of our ecommerce strategy for the next few years, and these are:
Our ultimate outcome is to remove as much customer friction as possible, become even more relevant to customers in this fast-changing environment, and as a result, significantly re-rate our net promoter score as a benchmark measurement for ecommerce customer satisfaction.
- Revamping the makro.co.za, game.co.za and builders.co.za online user interfaces, including key functionalities like search, to provide a much more seamless and intuitive customer experience.
- Developing new transactional and value-adding mobile-first digital solutions that cater to different customer occasions, journeys and segments.
- Expanding and significantly increasing our competitiveness in the on-demand and same-day customer proposition
- Deploying a wider range and strengthening our fulfilment capabilities. These capabilities include new integrated store technology, improving the click and collect experience in stores, and launching ‘ship to home’ capability from Distribution Centres to complement our store fulfilment capacity.
Do you follow a mobile-first approach?
Yes. Our ecommerce strategy is underpinned by a mobile-first approach and the desire to meet our customers where they are and through their preferred channel, as highlighted through the OneCart and VodaPay partnerships. Development of additional mobile applications is also underway, and these will be rolled out in due course.
How heavily is Massmart investing in ecommerce?
Massmart has implemented an ecommerce investment programme that allocates significant capital and resources into our ecommerce business over the next three years, in line with our strategic focus areas. In general terms, positive progress has been made towards our key ecommerce objectives.
One of the notable changes implemented in 2021 was the centralisation of trading banner (Makro, Game and Builders) websites, mobile and marketplace capabilities into a strong group-wide organisation, which has enabled more efficient ways of working.
This Group ecommerce organisation, consisting of dedicated teams for functions such as pick up & delivery and product management (which also includes UX research and product analytics), continues to grow and also leverages the expertise of the Walmart Global Tech team situated in Bangalore, India. Through this partnership, we are also able to leverage tech capabilities and best practices from Walmart International markets, including FlipKart and Silicon Valley.
Equally, we continue to invest in building our local capabilities through our local talent and partnerships.
How important is an omnichannel strategy?
Whilst the uptake of ecommerce continues to increase, brick and mortar stores still account for over 95% of retail sales in South Africa, so an omnichannel approach remains important.
Convenience means different things to different customers. If an item is needed urgently, a customer may want to come into the store to make their purchase or order via OneCart, for delivery almost immediately. At other times, they may opt to have the item delivered or collect it from one of our pick-up lockers or in-store at a time convenient to them.
The critical part for us is to ensure a smooth and efficient process for the customer regardless of how they have chosen to shop with us. We will continue to invest in both in-store capabilities and ecommerce as we strive to serve customers more efficiently.
What are the key advantages that Massmart is leveraging in its ecommerce strategy?
A notable advantage is that our sophisticated national Distribution Centre network and Warehouse store base (particularly Makro and Builders) offer fantastic geographic coverage for rapid online order fulfilment. Delivery lead times will continue to shorten, and currently 30% of orders at Makro are delivered within a day.
It’s clear that we have the brand portfolio, geographical presence, merchandise assortment, procurement scale and primary logistics capability to be an even more successful ecommerce player.
What are your future expectations for ecommerce?
The pace of ecommerce in South Africa has lagged relative to many international markets, but our market appears set for significant growth in the next few years. As ecommerce grows, we expect the number of players in the market to also increase in South Africa.
In the FMCG space specifically, we have seen customer expectations change dramatically from multi-day lead times being acceptable to a desire for orders to be delivered in a matter of minutes or hours. To this end, our goal is to continue to respond with greater speed, especially via the OneCart platform, which provides customers with an opportunity to shop from multiple retailers within a single ecosystem. This will also provide independent retailers with an opening into an already established and robust ecommerce environment.