Photo: File
Photo: File

Telematics: A driving force for SA e-commerce

By Opinion Time of article published Jun 3, 2021

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By Bernard van der Walt

ONLINE retail in South Africa rose to 66 percent last year, according to a recent study by World Wide Worx.

This was almost three times the growth of 25 percent that was predicted three years ago. In 2018, the country’s e-commerce sector reached R14.1 billion, which is extraordinary considering the numerous challenges that have long hindered the widespread adoption of e-commerce in South Africa, such as cybercrime, parcel theft and high data costs alongside, as well as socioeconomic and technological barriers.

Off the back of low initial growth, emerging economies, such as South Africa, are witnessing the greatest shift to the convenience – and, in some instances, the affordability – of online shopping.

South Africa has the 37th-largest e-commerce market globally.

The logistics industry has had to scale operations to circumvent supply chain disruptions and meet increasing demand. The expectation by customers to receive their purchases on their own terms – how, when and where – means that advanced telematics solutions are now an indispensable business tool and crucial to the sector’s future growth as it addresses the growing complexities of the e-commerce space.

Cutting-edge telematics solutions tip the scale in favour of companies willing to invest in increasing operational efficiencies, optimising processes, mitigating cybersecurity risks, streamlining supply chain flexibility and promoting the safety of drivers and packages.

While building the right compliance process requires innovative technologies, the vast majority of fleets, many of which run into triple digits, recoup their initial investment within the first year – size depending. This is an economic win for companies, not only in the short run, but also with the long-term savings they can expect.

But possibly one of the largest benefits of telematics – to companies and customers – is the advanced levels of connectivity it can facilitate.

Advanced telematics and fleet management solutions collect large data sets to transform fleet vehicles into mobile data centres. Telematics is key to ensuring regulations are monitored and met, such as driver training, driver fatigue, vehicle maintenance, vehicle roadworthiness and load specifics. Optimisation can outline the most time- and fuel-efficient routes and add new stops along the way, encourage more responsible driving, and flag required vehicle maintenance.

Fleet managers are also able to map a safer, more efficient future, and can remain connected with drivers to provide hour-by-hour and day-by-day accuracy that is progressively becoming more intuitive, to the point where the braking system, for example, can react if it is detected that the vehicle is going too fast. Drivers can be given mobile applications that allow them to report any issues to their fleet managers and teams in real time. These apps also have gamification elements that include social channels and entertainment, for when the driver is at a rest stop, and incentivise safety and upskilling, with the view to optimise driver engagement and improve their performance and driving habits.

Smartphones are also playing a much larger role and can work hand-in-hand with telematics technology to create seamless IT integration. Progressive innovation will eventually see deliveries being sent to customer’s exact locations, pinpointed according to GPS signals from their smartphones, a trend that the South African market is swiftly adopting.

Internationally, the rise of vehicle-to-infrastructure (V2I) technology is gaining traction. This allows vehicles to communicate not only with each other, but also with local infrastructure such as lane markings, road signs and traffic lights, using a Wireless Local Area Network. This allows for increased data to be captured, which is used to improve safety for drivers and cargo and improve efficiencies, with a substantial positive impact on the environment.

E-commerce has placed mounting pressure on expediting final-mile delivery between the warehouse and the customer’s doorstep. With as many as 68 percent of South Africans shopping more online since the onset of the pandemic, staying connected to customers is essential if businesses want to supercharge their customer service and entrench customer loyalty.

An increasingly digitally savvy customer base means that telematics solutions must always be evolving to give customers a transparent view of their delivery, from point of purchase to point of delivery with real time ETAs, reports and strict delivery slots and destinations.

With online retail expected to continue growing rapidly – predictions estimate local sales of about R42bn by the end of 2021 – telematics technology must continuously evolve if businesses are to remain competitive.

This year will be pivotal for electric vehicle growth, which will include vehicles such as vans, semi-trucks and scooters. It is also likely that there will be an increased use of artificial intelligence-based platforms, which will allow infrastructure and all legacy systems to become fully interconnected, automated and visible on a single interface. And one of the most exciting innovations we should start seeing in the next few years is the use of drones to perform deliveries, which is already happening overseas with great success.

What is certain is that increased efficiency can only boost an already competitive landscape and stimulate economic growth in emerging markets. After decades as a niche feature, innovations in telematics technology are coming to the fore as one of the key factors set to steer the e-commerce juggernaut.

Bernard van der Walt is a sector head at BDO South Africa

*The views expressed here are not necessarily those of IOL or of title sites

BUSINESS REPORT

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