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Petrol price a boost for e-commerce

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With fuel prices continuing to climb, a growing number of people appear to be skipping car trips to the shops in favour of online-shopping. This, despite an economic downturn that some analysts have speculated could hold back the growth of e-commerce in South Africa.

But while many brick-and-mortar stores are struggling under economic pressures, some e-tailers are reaping the benefits. At least, that is the experience of NetFlorist, SA's largest online flower delivery and gifting service.
NetFlorist's growth has continued in a robust manner, with current figures 20% up on last year, even as the belt is tightened around the waists of consumers.
Sue Morris, NetFlorist's director, comments: "Interestingly, the growth we are experiencing is not driven by heavy advertising spend. We have always been aware of the size of the market and our marketing efficiency, while many other online businesses were not. We focus much of our energy in having the right products and delivering a very reliable service. We've been around for nine years already, and are getting better and better at it. A somewhat obvious point is that we are in a category that works online and offer an easy purchase process that the user is in full control of."
There are also macro factors that account for NetFlorist and other online businesses' increasing viability. An increase in e-commerce despite an economic slump is a worldwide trend.
"E-commerce is a bright spot," says Jeffrey Grau, senior analyst at e-Marketer. "While retail store growth is in the middle-low single digits, e-commerce is still growing at least in the mid to high teens."
US consumers surveyed by Nielsen in June said they were shopping more on the web as a result of fuel prices.  57% cited free shipping as their strongest motivator for preferring to shop online. The largest percentage of consumers, 61% stated the ability to shop at any time was the reason for moving online.
Says Morris: "Convenience is our greatest drawcard. It is much less time-consuming to find exactly what you are looking for on the net than if you were "on foot". You can browse through a huge range and compare offerings without having to travel to multiple stores."
Morris believes that those businesses with real online value propositions and a clear understanding of the size of the online market will continue to grow and prosper in the short term.
"In the longer term" she says, "we all wait impatiently for a step-change in the cost of broadband to drive more people online."