Developing eCommerce as Part of The Omnichannel Experience
Earlier this month, my little one and I were preparing to visit the books and stationery shop with our ‘back to school’ list at hand. Just before stepping out, I received a call for an urgent query. I saw the look on her eyes and could sense the uneasiness on our potential outing. While attending to the query, I figured she could spend a few minutes to check the list online. The initial intention was to sustain the excitement before we step out. I reached out to an online e-retail site that had back-to-school banners and offers. I requested her to check if there is anything interesting. I returned after 15 minutes to find several tabs of the e-retailer’s site running. I explained to her that you can buy what you want there and will be delivered. I have an account, so I logged in and she was excited to ‘add to cart’. The shopping went beyond stationery to many other squishy, slimy items. This was a new beginning as the young shopper is now hooked to online shopping. She still visits the bookstore, but mostly for the cozy environment to seat, read a few lines before getting a book.
The growth of online retail experience within the region will grow via such experiences. A simple yet having an impact on shopping habits. The Africa & Middle East e-commerce market is expected to grow at 11% compounded annual growth rate between 2018 and 2022, according to Statisca.com, The Statistics Portal.
Looking at the African market, the share of e-commerce to the global e-commerce market still pales at below 2%. However, there are opportunities for growth, which marketers can exploit. However, the most important lesson is to note online does not replace the physical spaces as well as brick and mortar, in the short and medium-term. This is mainly due to the largely informal markets. It only provides an additional channel to reach consumers.
Businesses can either develop their own online channel platforms or ride on and utilize the existing market places. By market place, it implies third parties utilizing an existing established online portal to sell their products. The portal owner/operator executes the back-end operations and provides a payment platform. This implies even small businesses can utilize eCommerce as an additional option to reach their target customers. They don’t have to build online facilities from scratch. The objective is to utilize the eCommerce platforms as an additional channel in addition to the existing business set up. For example, a medium-scale tailor can be stitching clothes from a stall in the market (physical premise), and at the same time showcase the products on an online market place. Many are already doing so on their social media platforms. However, these do not provide payment options. Developing these linkages, therefore, is a key area that marketers should consider. The result is to provide consumers with options for purchasing their products.
The continued growth from a low base of internet penetration across the Africa continent provides the necessary infrastructure for the growth of additional channels. Every business can then make an evaluation and decision of the effective and efficient ways to reach consumers. It can then allocate proportionate support and resources in line with the returns.
However, the players still must grapple with other elements within the ecosystem for eCommerce to thrive in the continent. Some of the key challenges include:
- Trust – This is a fundamental element that online players must deal with across categories. Many markets across the continent, have, in the face of providing affordable commodities, ended up with cheap, poor-quality products.
Hence, consumers would be hesitant to buy for something they can’t ‘touch and feel’. Providers of online market places, therefore, need to have stringent measures to ensure only quality products are listed.
- Payment platforms – the Africa eCommerce platforms can’t just replicate global ones in using credit and debit cards due to the low penetration of these facilities. Looking for local solutions e.g. incorporating mobile payments, cash on delivery, available solutions by local FinTechs…etc. will go a long way in meeting the needs.
In addition, there is need to cater even for small-sized tokens. The first-time consumers will not spend a lot of money, but the first trial would most likely be a small amount.
- Shipping & logistics – This is mainly due to various factors such as transport infrastructure. In addition, there are inadequate and an ununified address systems. Ecommerce players need to develop localized options where consumers can provide details of their location, such as landmarks and unique location identifiers. There may be no street names in the peri-urban areas.
- Managing returns/consumer protection – Related to the above, is also in cases of modifications or if there is a need to return. If there are challenges in delivery of shipment, the same would be expected in case of a return. This has an additional cost element. In markets with no consumer protection, many would either bear the additional cost of returning products or end up with a product not in line with their choice.
All in all, it is important to provide consumers with a trial / an experience of the online channel. The little girl is now an ardent online shopper. We had to agree on a spending limit. After all, everything is on the screen and just a click away.