Black Friday spurs online shopping
JOHANNESBURG - Cyber-shopping continues to be a distant phenomenon for the majority of South Africans, who prefer shopping in brick and mortar stores.
However, experts said this week that they expected a boost in online shopping on Black Friday.
Arthur Goldstuck, the managing director at World Wide Worx, said that for the foreseeable future, brick and mortar sales would significantly outpace online sales on Black Friday, especially since online-only made up around 1.8percent of total retail.
“However, the significance of online sales on that day is that it draws in more new online shoppers than any other event of the year, and contributes to the acceleration of online retail sales for the year,” said Goldstuck.
Shopping malls are the preferred destination for South Africans, particular in urban areas, with almost 2000 malls nationally, according to the Council of Shopping Centre’s 2015 estimates.
Goldstuck said a very small percentage of South Africans shopped online regularly.
“Our 'Online Retail in SA 2019' report showed that as few as 4percent of South Africans shop regularly online. It is very strongly influenced by income, education, and means of internet access. However, due to the scale of promotions online on Black Friday, we will see more South Africans than ever before considering moving some of their shopping online,” said Goldstuck.
While malls accounted for around roughly half of South African grocery sales, he said that there were currently major attempts to make online shopping as convenient as possible for the customer.
Goldstuck said that these attempts included free delivery and returns, as well as "click and collect", which allowed goods to be purchased online but collected in-store or at collection venues.
Goldstuck said Woolworths and Mr Price were among the best examples of successfully taking brick and mortar brand online, adding that The Foschini Group was also doing a great job, while Edcon lagged behind.
“Of major online retailers, the Edcon group has among the weakest online strategies of physical retail groups, with Edgars hardly being top-of-mind for online shopping, and Jet and CNA literally having only images of print catalogues online, as if it's still 1995,” said Goldstuck.
Lulama Qongqo, an investment analyst at Mergence Investment Managers, said South African retailers were lagging behind in terms of online shopping.
Qongqo said Woolworths was punching below its weight in terms of online shopping.
“Woolworths could do so much more in terms of its online shopping presence. Its stores are exposed to higher LSM groups, it can leverage the strength of its brand and its loyal customer base, which is mostly situated in high-population-density areas,” Qongqo said.
Qongqo said the Foschini Group was investing significantly in technology.
“It has done a lot to improve its supply chain and has improved its customer experience online,” she said.
Takealot, Zando and Superbalist were leaders in terms of online shopping, Qongqo added.
A PricewaterfouseCooper's report published earlier this month said that South Africa’s Black Friday/Cyber Monday shoppers planned to make 50.4percent of their purchases in brick-and-mortar stores.
A takealot.com spokesperson said Black Friday had been a record-breaker in 2018 for both Takealot and Superbalist.
Takealot’s Black Friday gross merchandise value (GMV) grew 125percent from 2017 to 2018, with orders up 127percent.
“Within the first hour, R11.5million in GMV was generated and by 8.30am the retailer surpassed its entire Black Friday 2017 GMV. The total transaction value for Black Friday 2018 on Takealot.com amounted to more than R196m,” said the takealot.com spokesperson.