LANDSCAPE
Post-pandemic ecommerce trends
by Timo Dinkelman: CEO at Prebo Digital.
Ecommerce, and it’s potential, has been a buzz word ever since I joined the local industry 10 years ago. Thanks to its consistent high growth rates and the future possibilities that are clearly visible in more mature markets, many have jumped on the bandwagon to develop, grow and monetise this opportunity.
Fast forward to January 2023. After two accelerated years of growth in the SA ecommerce market due to lockdowns, and a tough 2022 during global economic pressures, here are key trends from my own work in ecommerce, both locally and globally.
Multi-channel
Most successful (e-)retailers have significantly diversified their online sales channels through advanced integrations from their own in-house platforms towards multiple, mass-market outlets that are growing faster and adding synergies to retailers. Research has shown that it’s worthwhile. Merchants selling on 3 or more marketplaces, on average, sell 156% more than those selling on one.
In the US, there are at least 5 multi-billion dollar marketplaces that predominantly generate revenue from allowing anyone to sell products through their platforms. Combine that with other tech platforms like Facebook and TikTok that allow commerce combined with vast user data and you have more than a handful of platforms to coordinate pricing, logistics, stock and service to manage.
It would seem that no one can compete with the size of established players like Amazon, Wallmart and even eBay. However, recently more and more niche and traditional retail players (e.g. Home Depot) as well as household brands (Target) in the US are adding marketplaces to their core offering.
The multi-marketplace model is complicated as it requires coordination across platforms, policies, logistics and yet it allows a single retailer to reach the majority of their target market. The challenges are the pressure it puts on pricing and margin, customer data ownership moves from the retailer to the marketplace, and lastly the retailer is dependant on performance and fee structures set by the marketplace.
This trend is also picking up locally and is expected to continue as brands fight for market share and a semi-early mover advantage. Newer platforms like Avo (Nedbank), VodaPay, Bash, Makro and the upcoming Amazon launch, all look to be the shopping platform of choice for the end customer.
For retailers, it’s key to continue doing the core retail principles well and having a clear strategy to continue acquiring customer data in every way possible.
Organic growth
Despite the increase in competition and new entrants, the industry as a whole still provides plenty of sustainable growth opportunities due to the growth in internet penetration and the improvements made in infrastructure. Consider all the new payment methods (BNPL, Moya, LayUp, social commerce, Google Wallet) that have come up over the last few years, combined with the amount of tech available to connect stores with marketplaces and other relevant integrations.
Lastly, the vast investment by a number of large players (Parcelninja, Pargo, uAfrica) that has significantly improved logistics.
These three components will result in a refined and streamlined overall customer experience thereby driving customers back into shopping online.
This is just the tip of the iceberg when it comes to the topic of ecommerce.
Key takeaways are:
- the continued investment in great products at great prices;
- complemented by a strong actionable understanding and collection of customer and shopping data to always retain maximum control of the customer buying your products;
- Be present where possible to not lose market share to other retailers on marketplaces.
Useful resources:
A performance-driven Digital Marketing Agency partnering with you to grow your business.