E-tail no longer a ‘nice to have’

Cape Town - Retailers in South Africa, who have yet to implement an e-commerce offering, will find themselves playing catch-up very soon, according to Leoni Volschenk, head of KNUP, a logistics and distribution fulfilment partner for the e-tail market.

“E-tail is no longer a ‘nice to have’ or a ‘maybe one day’ concept,” said Volschenk.

The same brand-building principles regarding the way that a consumer experiences a service apply equally in a physical and online shopping environment, explained Volschenk.

“When the customer opens that package, he or she must feel exactly the same way that they feel when they’ve supported your shopping centre store.”

Ryno Bekker, general manager of On the Dot Contract Logistics, of which KNUP is a division, agrees that e-tailers need to partner with suppliers that understand what brands are made of.

“Soon customers are going to become so comfortable in the online shopping environment, the physical store as we know it, may well disappear,” he predicted.

“Without changing the essence of the retailer’s brand, there could be a smaller and altered ‘physical’ front shop offering, while your customers will still have easy access to buying your products.”

Retailers warned

The founder of Rocket Internet, the German venture capital company behind dozens of online start-ups, warned the retail industry on Thursday that e-commerce and smartphones would mean there will be little future for stores in emerging markets, Reuters reported on Thursday.

Oliver Samwer (40) told the annual summit of the Consumer Goods Forum (CGF) in Paris, an industry network of some 400 retailers and big brands from 70 countries, that many of them risked being left behind as the growth of e-commerce accelerates.

"You only have stores because there was no internet, but that does not mean there is a right to have a store," Samwer said, adding that traditional retailers focused too much on older shoppers and not enough on smartphone-savvy youngsters.

"What you fear will come much faster," he warned.

Rocket Internet is bidding to create the largest internet empire outside the United States and China, seeking to replicate the success of Amazon and Alibaba in markets the US and Chinese e-commerce groups have yet to dominate, such as Africa, Latin and Russia.

Future e-commerce scenarios

Over the next 10 years, online retail will continue to gain popularity in both developed and emerging markets, according to a new study by DHL.

The DHL Global E-Tailing 2025 study analyses the role which e-commerce will play in consumers' lives by the year 2025, and how it will influence consumerism, retail and logistics.

The study forsees four possible scenarios:

Artificial intelligence in the digital retailing sphere:

The global economy thrives, despite exhibiting significant volatility in preceding years.

A highly developed digital culture evolves in this scenario, which sees all products being sold online.

Consumers receive support of virtual consultants, which will not only check the authenticity of a product and monitor purchase and delivery, but also place the actual order online.

Hybrid consumer behavior in convergent worlds of retailing:

A strong global economy and stable middle class establish a true model of “everywhere commerce” where smartphones and tablets remain consumers’ constant companions.

Interactive displays are ever-present in city streets, serving as interfaces to the virtual world, and the retail sector targets customers through a variety of channels.

These include interactive displays and goods online and in stationary stores, which results in consumers being able to access and purchase products at all times.

Self-presentation in virtual communities:

The world economy experiences rapid growth and the increase in wealth creates an affluent consumption-oriented middle class, whose values have shifted away from work and more towards leisure.

Niche retail websites, which offer selective and a dynamically-changing assortment for individual lifestyles, becomes the focal point of regional and global lifestyle communities primarily driving online retail.

Collaborative consumption in a regionalised retailing landscape:

A crisis scenario whereby consumer consumption patterns develop after the global economy suffers another financial crisis.

Under these circumstances, a high degree of protectionism brings international retailing to a complete standstill.

The powerful shift of the economy leads to a substantial change in consumer habits and results in consumers buying locally, as a rule.

According to Sumesh Rahavendra, head of marketing for DHL Express in sub-Saharan Africa, e-tailing – the sale of goods and services through the Internet – has exploded globally, especially in emerging countries and despite the various possible future scenarios, it is clear e-tailing will continue to boom.

“Currently, e-commerce already makes up 8% of the overall trading volume in Europe. Depending on the scenario, this share could rise up to 40% in developed countries and up to 30% in today’s emerging markets,” said Rahavendra.

The factor which all scenarios have in common is that the competition in electronic retail, whether on global, national or regional level, will become more intense.

"We don’t know for certain what the world will look like in 2025, but the study’s various scenarios show how rapid the global retail sector, both online and offline, is changing and that logistics will be a focal point of these change processes," said Rahavendra.

- Fin24
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