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Should retailers upscale their online offerings?


Jan 19th 2012, 07:41

With online consumer spending on the rise in South Africa last year, brick and mortar retailers should jump on the bandwagon and capitalise on the Internet as a sales platform.  

A recent report from World Wide Worx indicates that South African consumers spent a total of R2.6 billion online in 2011. This marks an estimated 30% increase in online consumer spending compared to 2010.

Although online spending accounts for a small percentage of total consumer spending at present, it’s gaining momentum. This, coupled with an increase in Internet use, gives off-line retailers another platform on which to sell. Trading online has many benefits, one being that a retailer never has to close its doors.  

Social media, like Facebook, adds another layer to the benefits of selling online as it gives customers the ability to Like and share brands with their friends.  Here, customers can share products they like on Facebook with the click of a button, and in so doing, tell thousands of potential consumers about it.

One retailer tapping into this functionality of Facebook is Woolworths. It has recently launched an f-commerce, or , where customers can buy Woolworths clothing.

While retailers catering to other LSM groups may shy away from using Facebook as an avenue for sales, this social media platform is not used by high-end South African consumers alone. It’s gaining popularity in the lower-end market too according to a in November 2011, conducted by Cape Town based research company, ikapadata.

Although our online spending is a drop in the ocean compared with countries like the US, where consumers spent around $10 billion shopping online at the start of the 2011 holiday season, enough South African consumers are using the Internet and completing transactions online for brick and mortar retailers to take notice.   



Editor at Capacity Holdings

Focusing on general issues that affect the FMCG and Retail Industries.