By 2021, more than 20-million South Africans are expected to shop online – but South African vendors are missing out on much of this opportunity.
While the commercial opportunity is obvious – currently e-commerce accounts for R14-billion of the total retail pie, or 1,4% – local brands aren’t taking full advantage.
This is among the findings of “The Cost of Online CX: A R34-billion Opportunity, 2019 South African Digital Customer Experience Report” that was commissioned by performance marketing agency Rogerwilco.
The study found that 71% of South African online shoppers abandon a purchase at the digital tillpoint. The commercial cost of this for local e-marketers is staggering, accounting for a loss of around R34-billion worth of goods per annum.
The main problem, according to online South Africans, is that payment failure is a big issue (57%), while site speed (38%), being unable to find what they are looking for (37%), and difficulty in navigating the site (27%) all impact the likelihood of an end sale.
“Brands are hell-bent on brand building and client acquisition – at the detriment of conversion,” says Charlie Stewart, CEO of Rogerwilco. “I see brands throwing heaps of money to get people to their sites and then they spend less on creating an ideal environment when they get there.
“If they curb their acquisition budget and put it into the very fundamental elements to give it a better experience, they will convert more customers.”
Customer service and support is also a big pain point, with over half of those surveyed saying that there is no-one to help them when they get stuck.
“There needs to be an improved on-demand support for customers and also brands need to look at why customers need help to make online purchases in the first place – you shouldn’t need a support service if the experience works,” comments Julia Ahlfeldt, a certified customer experience professional. “What is failing in the customer journey that is causing customers to feel that they need support? This is a big red flag. Digital shouldn’t be a channel where you need customer service, it should be seamless self-service.”
Stewart believes chatbots might well be the answer, although there are some misperceptions about what a chatbot is. “Businesses can address this by creating a persona that has some human traits which make it more relatable. Anything that can ease the journey is a good thing,” he says.
“Doing so can lead to a 30% saving in customer service costs. Furthermore, chatbots are bringing in the bacon; it is estimated that, by 2023, retail sales via chatbots will account for $112-billion.”
When brands do get it right, 44,5% of consumers report that they’ll spend more online. This also increases in relation to higher incomes; almost 60% of those who earn over R30 000 a month said they will buy more from a brand if the online experience is a good one.
“We consistently see that customers who have a seamless experience on our platform spend more money with us, so it makes clear commercial sense to continue to identify and remove points of friction,” Gumtree’s digital marketing manager Michael Walker. “This can be as simple as enabling buyers to set up alerts so they are notified as soon as a product they’re looking for becomes available and having automated prompts that guide advertisers on how to categorise their products with tools that rate the quality of the images that accompany their ads.”
Notwithstanding site speed, good navigation and customer support, local brands are also being compared to international giants like Uber and Amazon, whose apps often sit side-by-side local brands.
“Look at anyone’s mobile phone screen and it’s likely you’ll see local and international brands’ apps sitting side by side,” says ovatoyou’s Amanda Reekie. “Consumers dip in and out of these brands all day long, switching from Uber to News24 or Netflix to Takealot in milliseconds. And they expect a seamless experience across all of their apps; there is no differentiation in their minds between South African and global brands – they all need to work as well as each other.”
To overcome this, she says brands must invest more in their apps’ usability to make sure that the experience is intuitive and not only be as good as their nearest competitor but as good as Uber.
While banking online or via an app is the most common reason why consumers are online in the first place, with 85% of the sample reporting they use the platform for this reason, not everything can be fulfilled online; consumers still want a degree of physical contact, especially with financial services.
Reinforcing this preference for a human over machine, 37% of those surveyed said it’s easier to go into a store or a bank branch.
If customers don’t get what they want online, they are quick to bad-mouth a brand: a whopping 99% of consumers said they would tell friends and family about their ordeals.
“In a world where people rely more and more on advice and recommendations from friends and family – and that then influences them as to where they spend their money – these experiences are more powerful than above the line marketing; you believe your friend over an ad,” says Ahlfeldt.
“For existing brands, if there are negative experiences out there it just piles onto the brand. People still talk about experiences that happened years ago; it’s hurting you today and will hurt you tomorrow. On the other hand, those that had a good experience leads to a repurchase (44,5%).
“I think that if brands can look at this and understand this, that if I deliver a good experience, then 44% will spend more and recommend to friends and family, what is the knock-on effect of this? Bad experiences are the silent killer; you don’t feel the pain until it’s too late.”
While there are no quick fixes, Ahlfeldt says brands that have online platforms, can and should address common consumer challenges.
“Given the rate at which South Africans are coming online and using the digital platform to engage with and buy from brands, businesses should be investing far more than the average 10% to 24% of their marketing budget on their sites, to prevent them throwing billions of rands down the drain thanks to high incidences of shopping cart abandonment.
“Site speed, good UX, offering customer support and making sure products are available online are all relatively easy things that brands can do to improve their customers’ experience and which when implemented will significantly increase consumer loyalty, return visits and ultimately sales.”