It is a Saturday afternoon and like many other shopping malls, this Johannesburg center is thronged with people running errands and lugging shopping bags. Escalators and elevators are full. At the tills bored tellers ring up purchases as snaking queues of customers wait their turn, while others push packed trollies through chaotic aisles.
One would be forgiven for mistaking this scene for the Christmas rush, except that this is a weekend in mid-January. The number of shopping malls mushrooming around the country and the expansion of shopping centers cannot keep up with South Africa’s insatiable consumer culture. Shopping has gone from being a fun to an arduous and time-consuming task. It is no surprise then, that 2013 saw the largest increase in online shopping. This trend is bound to continue in 2014.
“It’s true that e-commerce in South Africa is booming and it’s incredibly exciting to be part of this adventure, which is partly what drove me to relocate from Germany: the opportunity to be part of this evolution,” says Kalahari.com’s new CEO, Caren Genthner-Kappesz, who relocated to Cape Town last year to head up the online retailer.
“There have been a number of new entrants to the market in the last few years, which is fantastic because the more players there are, the more innovation there will be, and the more reasons people will have to enjoy the benefits of shopping online.”
It is hard to believe that before 1999, the word Kalahari meant the desert located in the west of Southern Africa. Today, the word lends itself to a pioneer in South African online retail. Last year, the Online Retail Brands Report ranked Kalahari.com as South Africa’s leading online retail brand, ahead of Amazon. That global online giant has aggressively dominated the online retail market in the United States. It is currently establishing its global footprint with localized branches in Europe and South Africa. Kalahari’s timeous delivery and the ease with which online shoppers can order anything from appliances to beauty products, has placed the brand in a strong position, according to Acentric Marketing Research, the agency that compiled the report.
“Kalahari.com has managed to maintain our lead as South Africa’s number one online store, and we believe that the key to doing this is to always keep your customer at the core of your business. We are extremely sensitive to our customer base and utilize various means to maintain open dialogue with them and actively action necessary innovation to improve the kalahari.com experience.”
With nine years of experience as general manager at shopping.com and as a director and general manager for eBay Express, both in Germany, Genthner-Kappesz fine-tuned the customer experience. She has also worked as a chief operations officer at brands4friends, an eBay subsidiary and market leader in flash sales in Germany. Genthner-Kappesz, who holds a PhD in Mathematics, maintains that the human element is what drives Kalahari.com’s success.
“It’s also essential to have the right team, and I’m very proud to say that I believe I am supported by some of the best and brightest available.”
Spurred on by the growing online shopping environment in South Africa, fashion vendor Style36.co.za and online furniture retailer 5rooms.com launched ‘Cyber Monday’ this December, as the festive season shopping frenzy began. The initiative was based on ‘Black Friday’, the day after American Thanksgiving in the United States, when items are marked down to a fraction of their price. With the tagline ‘One Day. One Sale. One Massive Discount’, the South African version was an exclusively online sale that offered discounts of up to 80%.
The inaugural ‘Cyber Monday’ sale was a bold move by the two smaller retailers that became an effective advertising vehicle as more South Africans turn to online shopping. The furniture retailer 5rooms.com had their biggest sale day since the site was launched in 2012, while fashion retailer Style36.co.za saw a record of 100,000 visitors in 24 hours and became one of the most-visited websites in the country on the day.
Despite the boom in online shopping, retailers still face stiff competition from shops and have to be a step ahead.
“At the end of the day retail is retail, and pricing is a key element of that. Obviously online retailers need to plan and negotiate very carefully in order to offer value,” she says.
“We are very big on malls and we like to taste and touch and see and feel. The more you move down in the pyramid the more tactile they are with objects. They’re looking at the stitching on the shoe, they’re feeling the fabric for how thick it is. They’re testing the stitching, they’re yanking and pulling and you can’t do that online. I don’t think that the trust is there yet for online shopping, and that’s understandable because we don’t even trust the stores we’re going into, we’re still inspecting everything very closely,” says Genevieve van Vuuren at the Consumer Insight Agency
The Cape Town-based consumer trends analyst also recalls the challenges faced by a Kenyan client who established an online shoe shop. While the website had a fair share of visits, customers preferred to try on the shoes before buying them. This made the website more of an advertiser than a vendor.
“I think as a culture we’re getting there, especially with electronics and stationery and stuff that you don’t have to try on like clothing,” says van Vuuren.
Building trust and a desire to purchase are key to building an online presence. In aspirational cultures like South Africa, products that consumers can’t purchase in their home country are most popular, but this has its drawbacks.
Kalahari.com has launched a cellphone application that could prevent customers from ever wanting to leave their couches. The Kalahari.com Scan and Shop app allows customers to find the best deals by scanning the barcode of a book, DVD, CD or gadget they’re eyeing out in a shop. The app compares the shop’s price to that of the online retailer’s price. Following in the footsteps of Amazon, Kalahari also offers a mobile shopping app as well as its own e-book reader.
“We believe that mobile internet is really the future in South Africa and we aim to be at the forefront of this. A recent survey of our customer base indicated that over 95% of smartphone users either already use shopping apps or would consider doing so. The development of a proprietary app allows us to deliver a much more sophisticated user experience to the user and also opens up the native technologies of the device to us.”
Since joining Kalahari.com in March last year, Genthner-Kappesz has tried to harness the popularity of mobile internet in South Africa.
Smaller retailers have fewer resources to throw at advertising and consumer innovations rely heavily on word of mouth. My Sister’s Closet is a popular women’s fashion boutique in Johannesburg, owned by sisters Sharna and Louise Darko. The shop carved a niche for itself by offering London’s latest trends to Johannesburg’s fashionistas. Last year, the Darko’s felt that the only way to expand the shop was through cyberspace.
“Going online was a natural progression for us as we were avid online shoppers back home in the UK. That coupled with the emerging global trend of online shopping, we knew South Africa would soon be jumping on the bandwagon. We were already getting requests from our customers to courier items to them if they couldn’t get to the store,” says Sharna Darko.
In February 2013, the sisters launched their e-commerce website. While they entered a market that was already dominated by online clothing fashion stores, such as Zando.com as well as retail giants Mr Price, it was well received. After observing a noticeable dip in their boutique’s foot traffic, they decided to trade solely online from August of that year.
“I think the size of our business works in our favor as we’re able to add that personal touch to our customer service. We also offer exclusivity, as we’re not shifting thousands of units of the same item,” says Sharna Darko.
Many e-commerce websites are reaping the benefits of engaging online with their clientele. My Sister’s Closet actively uses social media platforms, such as Facebook and Twitter, to communicate with their customers. The online fashion retailer also sponsors the wardrobes of popular television presenters. So, if a potential customer liked the kente cloth pencil skirt that they saw on the box, they can tweet the boutique. In minutes they’ll know about the availability of their size and will be directed to the online website – all from the comfort of their lounge. If the skirt is not the right fit, it can be easily returned without the hassle of an in-store exchange or the unforgiving harsh light of a fitting room.
Online retailers still need to build unfaltering consumer trust, as ultimately this will encourage customers to shop from the comfort of their homes rather than the inconvenience of bustling shopping malls. This means no pushing or shoving, no long queues when you have so many other things to do. One thing online retailers are getting right is that the customer’s time is limited.