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SA consumers take to online shopping

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South African consumers are becoming increasingly comfortable making online purchases, according to a new report released today by Visa.

A growing number of shoppers are going online to buy clothes, book flights and hotels and even pay utility bills as more services move into the digital space.

However, the report also highlights that safety and security remain a major factor in the adoption of digital payments and e-commerce.

Interestingly, the report found that goods consumers tend to purchase change the more familiar they are with e-commerce.

The report categorises consumers into three groups: Emerging online consumers, who are relatively new to e-commerce; Evolving online consumers, who are occasional online shoppers; and Mature online consumers, who are familiar and comfortable with e-commerce.

The Emerging category tend to go online for essentials such as paying bills, digital content like music, and food delivery. The Evolving category displays similar habits to the Emerging group, but is also comfortable buying fashion, personal electronics and in some cases, more advanced services like education. The Mature category is most likely to book airlines and hotels, financial services and a wider range of goods and services.

The report also found that:

* 62% of online shoppers purchase mostly clothes and apparel. Other items on consumers’ shopping lists include flights, hotels, utility bills, electronics and movies.

* 63% of consumers surveyed said they still prefer doing their shopping in malls. Consumers said they prefer realtime tracking and monitoring of their purchases, and the opportunity to discover a bargain or a sale.

* Security remains one of the top reasons people are hesitant to shop online. Across all categories, there is a lack of trust in making large purchases such as furniture and financial services.

In a sign of growing maturity in the adoption of electronic payments, the majority of consumers surveyed said they prefer paying with their cards (debit/credit/prepaid), as it makes them feel more comfortable than any other payment methods. They also believe it is a more secure way of making payments and it is easier to track their shopping spend at the end of the month. The report found that the average online shopper will spend between R500-R2,999 per month over the festive period.

Consumers who avoid shopping online cite concerns about using their payment cards online. However, this not entirely due to security concerns, but also to help manage spend and keep track of debt. However, this group could be persuaded to shop more online if retailers offered them incentives such as discounts and rewards. These consumers also want to be assured that their details are protected at all times while making transactions.

Geraldine Mitchley, senior director for emerging payments and innovation at Visa Sub-Saharan Africa, comments: “The world is becoming digital. According to some reports, last year global consumer card payments surpassed cash payments for the first time, so whether you are shopping online or in a mall, electronic payments are playing an increasingly important role. New technologies, such as mobile payments, are also driving greater adoption, so the trend is definitely towards the growth of online goods and services.

“However, consumers also want to know that their transactions are protected, their data is safe, and they are going to receive the goods they pay for. Visa’s role extends not just to helping consumers make fast and convenient purchases through technology like Visa Checkout, but also ensuring that every transaction is protected, and that the merchants who accept our payments are acting responsibly.”

Encouraging more shoppers to go online will take time, but Mitchley believes that the platform is in place for growth. This includes helping consumers understand how to use online platforms and find deals; promoting the benefits of secure and reliable payments; and making consumers aware of the convenience of shopping online. In addition, merchants and financial institutions can play a role by promoting rewards, incentives and online-based deals, while also focusing on security.

“Notably, many respondents say they will shop online more readily if they are incentivised to do so by the various retailers. We are seeing a growing number of our own Visa merchants driving in-app sales and deals, with additional discounts and price cuts almost weekly. Using Visa data, there is also room for creating more personalised incentives for customers, and retailers can become more attentive of consumers’ needs and introduce initiatives that will attract them to their online shopping hubs,” she adds.