Photo by: Duane Daws
South African online retail sales represent only 1% of the country’s overall sales and, although this is projected to grow as consumers look for increased convenience, it is unlikely to reach the levels of the most penetrated countries.
Speaking at the South African Council of Shopping Centres’ Research Conference on Wednesday, Investec retail analyst Kirsty Laschinger noted that the sector remained constrained by personal access to infrastructure, cost and literacy, with Investec only seeing it take up to 3% of market share in the next few years – “pretty underwhelming”.
Laschinger highlighted that online shopping was also mainly dominated by higher-income earning consumers.
However, she noted that there were signs of change and that retailers had more time to prepare their online strategies. “In terms of cost, we know that broadband is very expensive but . . . these costs will come down,” she pointed out.
Laschinger noted that currently, JSE-listed retailer Mr Price Group through its well-articulated strategy, designed to improve relationships with customers, was at the forefront of online retail. “They are speaking to their customers all the time [through e-mails, social media presence], not necessarily looking to make an online sale, [but to establish a relationship.]”
She also cited The Foschini Group, or TFG, as a company that was investing significantly in its online capability.