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Traditional retail vs digital online eCommerce in South Africa

Date: February 19, 2022

When setting up a storefront, a company will look at the space's size, location, foot traffic, design, interior fittings, and displays.

After months or even years of deliberation, they'll invest heavily in constructing an environment that precisely reflects their brand and best serves their clients' demands.

That investment is made with the expectation that it will take several years to generate a profit — if it ever does.

It's a methodical, deliberate, and well-researched way to make something long-lasting and able to grow.

An e-commerce storefront demands the same level of care as a physical storefront — careful consideration of the complexity involved in establishing a new type of storefront, the proper investment at the right time, and extensive strategic planning to ensure success.

Digital retail is fundamentally different from physical retail; it's a new world with distinct behaviours and consumers with various demands, one that requires the construction of an entirely new supply chain and fulfilment systems.

A consumer who purchases from your brand online is not the same as one who goes into your shop to make a transaction.

Product representation must be thoroughly evaluated, numerous audiences must be developed and tested through rigorous strategic targeting and communication, and distinct customer segments must be nurtured differently throughout the buying process.

When the first of the lockdowns went into effect in March 2020, South African e-commerce exploded, increasing by 66 percent to well over R30 billion for the year.

More on these seven tips to ensure your safety while shopping online this Black Friday. Black Friday criminal hysteria Black Friday is estimated to produce R11.3 billion in revenue for South Africa's retailers. South Africa's internet retail is expected to grow at a slower rate in 2021 because of economic problems. It is expected to reach R40 billion and account for 4% of all retail in South Africa.

It's not surprising that conventional merchants' losses, which reached a nine-month low in 2020, correspond with advances made by South African internet shops.

Takealot, South Africa's largest online retailer, increased sales by 41%, to more than R3.3 billion.

Overnight, online shopping became a part of everyday life, forcing businesses to move to or start using these channels.

As a result, the sudden change in focus was not a planned move in the business's direction, but rather an emergency jump into the gap caused by a market shift.

This implies that many firms are now focused on short-term revenue spikes rather than long-term development of their online brand and e-commerce operations.

In a bad economy where digital channels have been a lifeline for many businesses, this short-term view is OK. But the goal of e-ultimate commerce should not be to stay alive.

It should be focused on achieving long-term growth and competitive market penetration.

Not only is the ability to 'add-to-cart' critical for customers shopping online, but also the brand's legitimacy and the trust it inspires in these clients to commit to your business through the binary veil. Therefore, developing a brand in this area is just as critical as it is in the physical one.

You need the same skills, experience, and money that you would use to improve your brick and mortar store when you build your digital store.

At each stage of growth, the chosen platform or mechanism achieves its maximum potential – and at that moment, the strategy must shift, marketing must pivot, and priorities must realign with business objectives in order to assist the organisation in continuing to expand.

South Africa is expected to be the 37th largest e-commerce market by 2020, ahead of Portugal but behind Nigeria, with 68 percent of South Africans purchasing online more than before the epidemic.

Alex Wright, co-founder of Correlate Digital

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