The impact of COVID-19 on both consumers and retailers is becoming evident. Retailers are under pressure to reimagine and transform their businesses, build-out eCommerce solutions and expand their online offerings.
Consumers, having already navigated a difficult year, and still uncertain about what the future holds, are likely to spend more conservatively over the next quarter.
New data from Mobicred’s Consumer Spend index reveals some interesting trends as South Africans settle into post-lockdown shopping. While the previous quarter’s figures showed a higher level of eCommerce adoption, this spike was to be expected amid Coronavirus infection fears and consequent limitations on physical shopping during lockdown.
Despite adoption rates levelling off, the data shows an increase of 9% in average transaction size for existing customers and a slightly higher increase of 12% for the first time online customers in the last quarter. Averaging out at just over a 10% increase in basket-size per online transaction, online shopping looks set to just keep growing.
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Heading towards the end of the year, a slight slowdown on the previous quarter in terms of new retailers being onboarded is evident, which is to be expected as retailers start to refocus on traditional brick and mortar, in the build-up to the festive season.
A comparative view of online shopping trends across industries this quarter, against last quarter, shows that tech is continuing its strong growth trajectory, climbing another 29%.
Growing at a similar level, fashion retail was up 27% while beauty and health came back strongly with an upswing of 37% over the period.
Climbing by 10% from last quarter, general retail showed strongly with 36% growth while one of the previous quarter’s star performers, beds, coming in at the same rate. More generally, home and furniture managed to hang on to its gains in the last quarter and upped it by another 40% over the last quarter.
After being hit hard over the last six months, the auto industry has clawed its way back with an impressive upturn of 135%.
As the year draws to a close, retailers are hoping that the annual Black Friday and Cyber Monday sales will relieve some of the losses suffered in the middle part of the year.
Consumers, having kicked the tyres and taken online shopping for a test-drive during the lockdown period, are almost certainly going to turn to eCommerce before braving shopping centres to take advantage of the deals offered.
Retailers who have taken their lockdown learnings to heart and invested in building out their online platforms to facilitate greater eCommerce trade will certainly have the upper hand by offering a stronger push online.
According to Jason Sive, CEO of Mobicred, “It should be really interesting watching the online retail space over the season. While there will be a massive flight by shoppers online, the spending power of the average consumer is definitely in question”.
Meanwhile, for retailers who have not managed to effectively convert their sales channels to include online eCommerce offerings, and especially ensured the readiness of their fulfilment partner to deal with the additional capacity needed over this time, the weekend may well represent a watershed moment.
