Digital Commerce Acceleration Increased Online Purchases Present New .

Digital Commerce Acceleration SA online consumer shopping insightsOnline shoppers know what they want and where to get itSouth African online shoppers use a variety of online shopping providers. In the six monthsbetween June and November 2020, South African consumers mostly used food delivery servicesweekly (36%), online retailers monthly (42%) and online classifieds less than once a month (34%).While most consumers across all age groups tend to be focused online shoppers that know whatthey want to buy, consumers younger than 35 years are more likely to browse without having aparticular product in mind.Usage of online services for purchases by frequency of online shoppingThe overall acquisition rate of email marketing and social media marketing is moderate. Theacquisition rate of social media marketing is low among consumers who shop online less than oncea week, which might indicate that the products advertised are not relevant to them.5%16%27%15%29%28%Key online shopping behaviour during product discovery34%17%25%42%34%20%21%6%2%5%1%5%1%Food deliveryapps(e.g. UberEats,MrD)Online retailer(e.g. %35%Go to a specificonline storeand search forthe product I’mlooking forKnow what I want,search online andlook at all storesthat stock itGo to onlinestores andbrowse ratherthan shoppingwith a particularproduct in mindReceive ane-mail andfollow it to makea purchase24%WeeklyMonthlyLess than once a monthClick on ads onsocial media topurchase theproduct I seeadvertisedn 1 004Source: Deloitte Africa, 2020Grocery shopping Online classifiedsDirectly fromapps (e.g.(e.g. Gumtree,brand (e.g. Nike,Woolworths,OLX)CottonOn)Sixty60)Nevern 940Source: Deloitte Africa, 2020In general, South African consumers are discerning shoppers. More than two thirds (67%) ofrespondents indicated that they go to a specific online store and look for the product they want.An almost equal share of consumers (65%) said that they know what product they want, butcompare various online stores to find a suitable offer.0867%28%36%More than once a day34%The typical digitalcommerce journey startswith a specific productin mind.

Digital Commerce Acceleration SA online consumer shopping insightsConsumers choose an online store based onkey influencing factors Given the increasing number of e-commerce providers and the only partially unlocked onlineshopping market, it is important for digital commerce players to understand the factorsthat influence consumers when deciding whether to shop online, as well as the factors thatinfluence the choice of provider.Consumers look for a provider they can trust and that offers hassle-free and effective onlineshopping at the right price.Effective checkout, low delivery costs and clear and simple return or refund policies areimportant factors for consumers. In addition, consumers prefer providers with good customerservice, in case they face any challenges or questions throughout their online shoppingjourney. The push to pure self-service is likely to frustrate certain customers, especially thosewho are not yet comfortable with online shopping.This shows the importance of a well-designed and intuitive user interface built on a solidfoundation of technology supported by human-led and responsive customer service.Customers are likely to return or be attracted as new customers to a digital commerceprovider that gets all these elements right.Factors influencing choice of online stores88%86%86%85%EffectivecheckoutLow deliveryfeesAccess to andsupport fromcustomerserviceReassuranceregardingreturns andrefundsn 1 004Source: Deloitte Africa, 20200983%Trust in thebrandOffering a hassle-free, smoothand affordable shoppingexperience along the entirecustomer journey, backed byresponsive customer service,creates trust and loyalty.

Digital Commerce Acceleration SA online consumer shopping insights while certain elements will make them go and stay awayPoor security of online payments and personaldata, high delivery fees, cumbersome returnprocesses and unreliable delivery times arethe key concerns for online shoppers whenchoosing an online shopping provider and,therefore, present barriers to online shoppingadoption.of online shopping, reflecting that trust inand familiarity with the platform are built upover time and that the convenience onlineshopping provides to frequent e-shoppersmay outweigh delivery costs.In addition to security and delivery relatedconcerns, online shoppers are frustratedby a lack of product information, includinginsufficient photos and product descriptions.Concerns around data and payment securitytend to decline with an increase in frequencyConcerns impacting the choice of online stores86%86%86%Poor security ofonline paymentsHigh delivery feesDifficult toreturn products82%Lack of personaldata protect81%Top 5 pain points for online shoppers14%10%Lack of securityLate deliveries/unreliabledelivery timesLimited detailsabout theproductn 1 004Source: Deloitte Africa, 2020109%False advertising/fake products“Online stores need to give you all exact product info and dimensions. I boughta dress and it was way too small.” Daily online shopper“I get frustrated when I am looking for a product but they don’t tell you thedetails so you need to do research elsewhere.” Monthly online shopper“Security of the information supplied, from personal details like addresses tothe bank card details are a key concern for me.” Weekly online shopperUnreliabledelivery timen 1 004Source: Deloitte Africa, 202049%“Security of payment is paramount. Any suspicion that payment security is notup to scratch will lead to me cancelling the purchase.” Weekly online shopper7%Difficult returnprocessUnlocking the online shopping potentialand becoming the online store ofchoice relies on addressing key consumerfrustrations and concerns.

Digital Commerce Acceleration SA online consumer shopping insightsKey insights across the South African consumer’sonline shopping journey More than two thirds of respondents (67%) search with a particular product inmind before arriving at an online store. Consumers are more likely to engage with advertising that they receive via email thanwith advertising received via social media. Over 60% of consumers use both PCs and mobile phones for their online shopping. Consumers tend to search for a specific product once reaching a store, rather thanbrowsing products currently on offer. Fashion and electronics are firm favourites among online shoppers. Over 70% of respondents noted a lack of product information as a concern whenshopping online.Product selection A seamless checkout process is the most important element when choosing anonline store. Two thirds of respondents look for a shopping cart function that is easy to use andremembers them. Over half of the respondents indicated EFTs are their preferred form of payment.Checkout process and payment Delivery cost is a critical component of the online retailer selection andoverall experience. The biggest frustration with deliveries is unreliable delivery time rather thanthe delivery time itself.Delivery 85% of respondents indicated that a store’s return and refund policy is animportant factor when choosing where to shop online. 82% of respondents remain concerned about their ability to returnproducts and the ease of doing so.Returns Access and support from customer service is a critical element (86%)of consumers’ online purchases and they are often frustrated by andconcerned (78%) with the delays in customer support.CustomerserviceClick here for the nuances per: Income profiles Frequency profiles11Product or shop awarenessBrand experience &loyaltyConsumers crave a seamless brandexperience throughout their shoppingjourney and expect their information to bekept safe. Addressing their concerns, andfocusing on the critical elements will result ina positive brand experience and loyalty.

Unpacking seven factorsthat matter most toSouth African onlineshoppers

Digital Commerce Acceleration What matters most to South African online shoppers?What matters mostto South Africanonline shoppers?The survey data revealed seven key factors thatstood out and matter the most to South Africanonline shoppers. Some of them are directly linkedto certain steps in the customer journey, whileothers are overarching issues or concerns thatapply to multiple points on the customer journey.SmoothcheckoutEach of these factors should form part of thefoundation of any digital commerce offeringbeing taken into the South African online market,irrespective of target segment or category.A brand youcan trustClear returns andrefunds13Choice ofdeliveryBuying vsbrowsing7 factorsthat matterto SA onlineshoppersServicemattersProtect my data

Digital Commerce Acceleration Smooth checkoutSmoothcheckout88%of all respondents rated theability to transact effectivelyat checkout as an influencingfactor when choosing anonline store.Key considerations:Invest in human-centred design to ensure slick, fastand intuitive user interfaces and experiences.Develop easy to navigate checkouts based ona clear understanding of what matters most toyour customers.Allow for improved customer experience throughback-end integration to facilitate availability anddelivery options.What our experts thinkClick on image tojump to InsightThe inability to check out smoothly and effectively wasrated as the top influencing factor among shopperswhen shopping online.Consumers are expecting a frictionless end-to-endexperience when visiting an online store. A clear viewof stock availability, the ability to add things to a cartthat remembers them, the ability to select differentdelivery options and effective payment alternativeshave become the benchmark of an enjoyable onlineshopping experience.14Bruce Collins

Digital Commerce Acceleration Choice of deliveryChoice ofdelivery86%of all respondents rated highdelivery fees as a concern anda key influencing factor whenshopping online.The perceived high cost of delivery makes onlineshopping less attractive to lower income consumers, amarket segment in South Africa yet to be unlocked.While quick delivery times are often seen as adifferentiator among online retailers and ‘next daydelivery’ or even ‘same day delivery’ have become thenorm in advanced digital commerce markets such asthe United States or China, it seems that expectationsdepend on the product category.South African e-shoppers expect reliable delivery timesthat fit into their daily schedules and are willing to pay forspecific dates and times.15Key considerations:Consider the customer’s attitude to importanceof time when it comes to specific categories ofgoods purchased.Have a business case for multiple delivery alternatives,for example, longer delivery time for a reduced cost,subscription delivery for multiple purchases.Be aware of how ecosystem partners can help orhinder the customer experience.Consider the global trends when it comes to thedelivery of specific products (e.g. passing on thedelivery surcharge to consumers for big basketitems, speed of logistics for fresh food).What our experts thinkClick on image tojump to InsightKavithaPrag

Digital Commerce Acceleration Service mattersServicematters86%of all respondents ratedcustomer service as aninfluencing factor whenchoosing an online store.Having clear and open lines of communication withcustomers throughout every stage of the purchasingjourney is essential.Key considerations:Provide consumers with access to your business whenthey want it and through the channel that they prefer.As consumers expect online businesses to be ‘alwayson’ configure your service operations to support thepeaks and troughs in demands.Carefully map your service recovery journey, andmake it a ‘wow’ experience – it could be your mostimportant differentiator.Examine the customer journey to find opportunities todeliver moments of delight for customers.What our experts thinkClick on image tojump to InsightConsumers are not particularly forgiving of slowresponse times nor a lack of communication regardingchanges in delivery and refunds.Ica van Eeden16

Digital Commerce Acceleration Protect my dataProtectmy data86%of all respondents ratedpoor security of onlinepayments as a concernwhen shopping online.81%of all respondents rateda lack of personal dataprotection as a concernwhen shopping online.Key considerations:Compliance with data privacy regulations will requiredata privacy consent frameworks and related datamanagement capabilities. These enable improved datamanagement and resultant data quality.Trusted quality data is the bedrock of customeranalytics. Understand how to improve businessperformance through real-time and hyper personalisedmarketing for increased basket valueEnrich each customer service experience with deepcustomer information context and experienceanalytics to drive emotive connection through tailoredservicing.What our experts thinkClick on image tojump to InsightProtection of data, including financial and personaldata, was seen as a fundamental concern across alldemographics.Having a platform that protects financial and personal datais seen as one of the top priorities when deciding on anonline shopping channel. The importance of the protectionof personal data tends to increase with rising income levels.17RyanSchefermannSchefermann

Digital Commerce Acceleration Clear returns and refundsClear returnsand refunds85%of all respondents ratedpolicy on returns andrefunds as an influencingfactor when choosing anonline store.82%of all respondents statedthat difficult returns area concern when shoppingonline.Key considerations:Integrate your data, utilise analytics to predict demandand develop fulfilment solutions that best suit yourbusiness’s needs.Invest in the back-end capabilities of the business tomeet the expectations set by a heavily invested frontend.See reverse logistics as an opportunity for marketgrowth and to enhance the value proposition tocustomers.What our experts thinkClick on image tojump to InsightHaving a clear returns and refunds policy builds trustwith consumers.Having the ability to return products promotes choice,safety and security in the mind of the consumer.It also reduces the barriers to online shopping whereproducts cannot be touched and felt.18KavithaPrag

Digital Commerce Acceleration A brand you can trustA brand youcan trust83%of all consumers ratedtrust in the brand as aninfluencing factor whenchoosing an online store.Consumers are choosing online store brands thathave built a trustworthy reputation.Key considerations:Ensure the authenticity of the value proposition thatyou are delivering to consumers to maintain trust.Consider the position of your digital commerce brandwithin your current brand architecture models. Thegreater the distance from your mother brand, thegreater the additional investment required to buildconsumer trust.Consider additional brand focused advertising to buildconsumer trust in the digital commerce platform.What our experts thinkClick on image tojump to InsightThis reputation is either gained through marketawareness, peer recommendation or a prior smoothand frictionless experience with the brand.AhmedBulbulia19

Digital Commerce Acceleration Buying vs browsingBuying vsbrowsing67%of online shoppers go to aspecific online store andsearch for the product theyare looking for.With a seemingly unlimited range of productsavailable online and a growing number of onlineretailers, finding the right product or the mostsuitable online retailer may seem to be a dauntingtask for consumers.South African online shoppers tend to be verytargeted when choosing products and onlineretailers. About two thirds of online shoppers go toa specific store with a particular product in mind.20Key considerations:Understand the importance of different channelswithin the customer journey and how they integrate tocreate a seamless omni-channel experience.Ensure that your digital commerce operating model isoptimised for inventory availability and working capitaleffectiveness.Have a clear view of your consumers’ ecosystem thatsurrounds your products and how you develop andleverage partnerships to influence consumers’ choice.What our experts thinkClick on image tojump to InsightJohnathanSmit

“Every company consideringdigital commerce is challengedwith figuring out how to combinean offering that addressescustomer needs, data, operationsand tech platforms intocompelling user experiencesthat support their businessstrategy.”Ica van EedenDigital Commerce Leader, Deloitte Africa

Appendices

Digital Commerce Acceleration MethodologyDeloitte Africa Digital Commerce Survey MethodologyThis report is based on an online surveyconducted among 1 004 consumers in SouthAfrica across all nine provinces.SampleIn order to be considered as a respondent, theparticipant had to be above the age of 18.The sample was designed tobe nationally representativeof the SA population.The survey captured the views of consumersthat either already shop online or are not yetonline shoppers.Where applicable, references to these profilesare made in the report to highlight keydifferences and nuances distinctive to them.These characteristics may help to craft digitalcommerce and engagement strategies, developproduct offering and tailor unique customerexperiences for individual customer profiles.23The online sample wasrecruited from InSitesConsulting South Africa'sDigital Research Panel.Income quotas were alsoimposed to ensure an evenspread across income.The survey aimed at a nationally representativesample. Income quotas were applied in order tocapture views across a wide income spectrum.Two primary lenses were applied to the datain order to identify variances among differentonline shopper groups: (1) frequency of onlineshopping and (2) monthly income of theonline shopper. These lenses were chosen fortheir impact on online shopping behaviours,preferences and needs. This resulted in twoonline shopping profile groups (see pages25-27).Data collectionGender1 004RespondentsData was collected between28 October and 3 November2020.AgeIncome13% (18-24)56% Male44% FemaleOutcome31% (25-34)36% (35-49)20% (50 )20%(R0-R6 000)20%(R6 001 - R12 000)20%(R12 001 - R15 000)20%(R15 001 - R29 999)20%(R30 000 )Quotas were applied to gender, age and income.Percentages might not add up to 100% due to rounding.Response percentages exceed 100% where respondents were allowed to select multiple answers.

Digital Commerce Acceleration Increased online purchases pr

Growth in online shopping is set to accelerate Ongoing concerns about COVID-19 and the convenience of online shopping are key drivers of future online shopping. The frequency of online shopping is expected to increase in the coming years, with two in three respondents indicating they will shop more online in 2021. but focus needs to be on .