Brands leave R34 bn in lost sales on the e-commerce table - report
Companies / 20 September 2019, 6:00pm / Staff Reporter
DURBAN - By 2021, over 20-million South Africans will shop online.
This is a third of the South Africa's population. Yet, while the commercial opportunity is obvious – currently ecommerce accounts for R14 billion of the total retail pie, or 1,4 percent - local brands aren’t taking full advantage.
So reveals The Cost of Online CX: A R34-billion Opportunity, 2019 South African Digital Customer Experience Report. Commissioned by performance marketing agency, Rogerwilco.
Among key findings the study found that 71 percent 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.
So what’s going wrong? According to online South Africans, payment failure is a big issue (57 percent), while site speed (38 percent), being unable to find what they are looking for (37 percent) and difficulty in navigating the site (27 percent) all impact the likelihood of an end sale.
"Brands are hell bent on brand building and client acquisition – at the detriment of conversion. 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," said Charlie Stewart, Chief Executive of Rogerwilco.
Provide a helping hand – or bot
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. 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," said Julia Ahlfeldt, a Certified Customer Experience Professional.
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," Stewart.
Stewart added, "Doing so can lead to a 30 percent 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".
Better experiences = better returns
When brands do get it right, 44,5 percent of consumers report that they’ll spend more online. This also increases in relation to higher incomes; almost 60 percent 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.
Up against the best in the world
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," said 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," said Reekie.
To overcome this 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.
Face to face
While banking online or via an app is the most common reason why consumers are online in the first place, with 85 percent 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.
“When considering our customer journey, across income groups, consumers prefer to engage with us through human-manned channels. They’re comfortable with searching for information in the first part of their journey, when looking for options to meet their needs, however when they get to the buying phase they seem to be hesitant to make that in a digital environment and they want to fulfil the buying decision in a human environment, such as a call centre or face to face," said a CX expert from a leading insurance provider.
Reinforcing this preference for a human over machine, 37 percent 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 very quick to bad mouth a brand: a whopping 99 percent 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.
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 percent).
Getting it right
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 - 24 percent of their marketing budget on their sites.