While somewhat easier than 2020, 2021 has been another difficult year for South African retailers seeking to build continuity and grow their businesses. Black Friday and the days preceding and following it, offers hope for those retailers that wish to kick start their sales going into the festive season.
Black Friday, which is of US origin, has not been a mainstay in South Africa and has only gained traction in the last decade. However, it has become an exciting time for consumers who hunt for specials, and an important time for retailers to increase their volumes and build brand loyalty. While it does exist in brick and mortar format, because of changed behaviour as a result of the pandemic and possible fears of a fourth wave, it is the e-commerce space that’s likely to enjoy the biggest wins, says SME financier Retail Capital General Manager Rean Bloem
“Black Friday is widely seen as an opportunity for retailers to increase their sales volumes, and if last year – the first of the pandemic – is anything to go by, where online transactions increased 60% off a low base and in-store Black Friday sales shrunk by 2-million transactions compared to the year before, the retailers with solid e-commerce strategies will be the ones who benefit the most,” says Bloem.
Colleen Harrison, Head of Marketing at online payment gateway Payfast, says that the pandemic has definitely sped up online commerce but compared to the rest of the world South Africa has a long way to go. “This is exciting,” she says, “because if you consider that online sales make up just 2,8% of all retail in South Africa compared to the UK where online retail accounts for 20% of all retail, and China, where e-commerce is expected to account for more than half of all retail sales, the potential for growth on these shores is exciting and all the more reason for retailers to invest in solid e-commerce strategies sooner than later.”
Bloem agrees, saying that Retail Capital noticed a sharp increase in finance being used to drive e-commerce strategies and growth. “The businesses that were able to pivot and build solid online propositions which include the store and the back-end investment in inventory management and logistics, have dramatically improved their prospects. Even during the harder lockdowns, these businesses have turned good numbers. As the online market grows, they expect to benefit significantly,” he says.
As strategic partners, both Retail Capital and Payfast believe that entrepreneurship and small and medium enterprises (SMEs) hold the key to South Africa achieving its economic potential. Bloem shares tips for South African SMEs seeking to fast-track their digital sales strategies, while Harrison offers tips on how to make the most of e-commerce during events such as Black Friday.
Bloems’ tips for a good e-commerce strategy:
Choose the right online store platform
Digitisation has enabled businesses to lean on off-the-shelf platforms that greatly reduce the amount of development time needed. “There are very good online store platforms available. My advice would be to choose the right one for your business that is compatible with your systems. As you grow you can tailor the store for your customers specific needs,” says Bloem
Choose the right payment gateway
Your first port of call is partnering with a payment gateway provider such as Payfast that is respected in the market and has a solid track record, says Bloem. It is important that whichever gateway you choose integrates seamlessly into your existing website, he says.
“An interesting option, especially in times where consumers may be feeling a cash flow pinch is to partner with payment platforms that enable the customer to pay off goods over a period of time, while the platform carries that risk and settles your account.”
Bloem says you need to secure your online store the way you would secure a physical store. Instilling trust and protecting customer information is vital. “Cybercriminals are increasingly savvy and so you cannot afford to skimp on securing your website and store. In addition to this, online stores need to be available 24/7 and so it is important to have suitable support teams on standby,” he says.
Invest in systems to manage inventory
Cloud-based solutions have allowed for a paperless and automated environment. If your business has not made the shift to a paperless environment yet you risk being left behind.
“Once you are in the cloud, you should consider investing in software that controls and tracks your stock. As you scale, you’ll need to consider warehouse management software,” says Bloem.
Choose a good logistics partner
The online environment is more competitive than ever, meaning end to end customer service is vital, says Bloem. “You need to work with a logistics partner that has the network and capacity to deliver on the promises you make.”
“You can’t open an online store and expect people to just find it. Your digital marketing is a very important tool in the growth and success of your online store. Social media, content marketing, SEO, and email campaigns are crucial to support your online sales performance. If you don’t have capacity in-house, then look at outsourcing to a skilled agency,” he says.
“Ultimately, a successful e-commerce strategy is about far more than just setting up an online store. We have seen first hand how SMEs that have used our funding to build a solid e-commerce gameplan have benefited from the rapidly growing online retail environment plus have more stability during the more challenging trade conditions. No doubt it will continue growing in South Africa as we are still somewhat behind many countries,” says Bloem.
Harrison’s tips to make the most out of Black Friday and online sales in general:
Start planning today
“Start planning early and let your customers know that you are going to be participating in Black Friday,” says Harrison. “This doesn’t mean that you must give your competitors an advantage by giving away what’s up your sleeve, but if customers know that there will be deals for them, they’re likely to log on during the event. Build excitement.”
Black Friday is not just a day
Black Friday is not just a single day, says Harrison. If you decide to partake, you need to be prepared for a week. “It usually starts gaining momentum on the Monday before Black Friday and we see steady increases in payment volumes over the week. There is a massive surge on Friday, which is usually just after or around payday,” she says. Start the deals early to capitalise on spending when customers still have money to spend!
A clever tip if you are planning specials on particular days during the period is to entice your customers to add to their wishlist, which will bring them back to your store.
Be creative with your specials
“It doesn’t have to be a 50% or more discount. Your special could be a value-added special, such as buy one item and get another free, or choose four and only pay for three. Find a way that works for your business and add value for the customer seeking the deal.
Enable more than one payment method
Beyond catering to different people with different preferences, this acts as a failsafe if one method were to fail, says Harrison. To prevent customers abandoning the cart, they need other, trustworthy options.
“Make sure you don’t just rely on one payment method, especially when it comes to card payments which require 3D secure, because there have been instances where these couldn’t handle the increased volumes. Have that as an option, then also look at instant EFT, for example.”
Communicate with your customers
“There’s a risk that if you get a sudden surge of sales, that you could struggle to fulfil orders, especially if you are still new in the e-commerce space. Communicate delays as they happen, and if you anticipate potential difficulty, communicate that from the beginning. If you can already anticipate that you’re going to struggle fulfilling before Black Friday, have that on the product page with anticipated dates at check-out,” says Harrison.
Include trust badges on your website
“If you haven’t already, make sure you’ve got trust badges on your website. For example, a Google reviews rating is great. If you offer free shipping, make that a badge. There are money-back guarantee badges, payment method badges, security trust badges – include them. It will instil trust at checkout or before,” says Harrison.