Weeds! The evolution and unstoppable growth of ecommerce

The world’s first online transaction occurred in 1971 or ’72, roughly three years before South Africa witnessed its first television broadcast and nearly three decades (or so) before anyone bothered buying anything online in the rainbow nation.

That first transaction in the ’70s was, of course, the sale of a bag of marijuana.

Yes it was weed, dagga, ganja, green tree of knowledge or whatever name you know it by. The “illicit” transaction was arranged between a group of Stanford students using Arpanet accounts at Stanford University’s Artificial Intelligence Laboratory and their counterparts at Massachusetts Institute of Technology.

A lot has changed since then of course.

Today you can buy all manner of things over the internet from all corners of the world. Some from more reliable suppliers than others and, yes, some more legal than others but the fact does remain that ecommerce has rapidly and unforgivingly evolved to a point where the “e” is quickly being replaced by an “m” and that while most companies are still struggling to come to terms with the delivery of effective (traditional) online platforms for their clients.

The state of play from RSA to USA

According to research conducted by Google and World Wide Worx, there are between 1 500 and 2 500 different online stores trading in South Africa, with online spend at the end of last year topping the R4.5-billion mark.

Granted, that still only represents 2% of the national retail spend for 2013 but, seen in context, it represents annual growth of over 30% – with significantly higher growth rates staring retailers in the face over the coming year or five.

With such staggering scope for growth in this sector (not only in South Africa but the continent at large) it’s no wonder that everyone who’s anyone looking for a competitive advantage should be throwing everything and the kitchen sink at getting their ecommerce and, now, mcommerce strategies right – especially when looking at evolving trends from around the world.

Stats from Uncle Sam

The Custora Mobile Commerce Report (released 8 July 2014) highlights some interesting online shopper behavior trends that are sure to be mirrored locally sooner, rather than later.
The report points to a sharp movement from eCommerce / desktop-driven online shopping behaviour to mcommerce / mobile-device-driven shopping behaviour.

According to the report, mobile devices accounted for close to 50% of eCommerce traffic in the first quarter of 2014. That is up from only 3% in Q1 of 2010. It doesn’t take a genius to work out what kind of phenomenal growth that is in a very short space of time.

US Mobile commerce is expected to rise from US$40 billion to $50 billion this year – a 25% year-on-year increase.

This massive increase in mobile traffic is not directly proportionate to increased mobi-driven sales, however – and there are some very good reasons for that.

Knowledge is power

mcommerce is about more than making a direct purchase, it’s about access to relevant information as and when a shopper requires it.

More and more people are using their smart devices to compare prices and specifications, read online reviews about a product, service or company, view ratings and ask advice from peers before making a purchase decision.

Shopping has become a digitally integrated exercise with many points of influence, so, while direct sales from mobile devices are still lagging behind desktop and in-store purchases in some way, mcommerce most certainly plays a significant role in swaying a purchasing decision.

A large part of the mcommerce shopping experience is providing potential customers with the information sources they need in order to drive their decision making process forward.
Stats from Down Under

In 2012, a Nielsen and PayPal “Australian Digital Study” identified that 60% of online shoppers start their search with a mobile device using apps, Facebook and online ads as the main triggers.
Evolve that by two years and we are probably looking at a number closer to 70%.

In the same year, Google’s research indicated that 59% of Australian mobile shoppers made at least one mcommerce purchase a month – with most indicating that once they had a successful experience they would continue the behaviour.

Mobile drives dollars

84% of mobile phone users access social media platforms to enhance or influence their shopping experience.

While younger generations who grew up with mobile technology are obviously more willing to engage in mcommerce activity it is also clear that older generations are quickly getting up to speed, the only real difference being that these generations often want a more personal touch somewhere in the buying cycle.

5 trends to keep tabs on

1. Location-based marketing will surge ahead through mcommerce. GPS check-in will allow stores to offer a variety of on-the-spot discounts, along with other innovations. Clever thinkers will surprise, amaze and capture audiences.
2. Digital coupons, discounts and loyalty rewards for mobile shoppers. Rewards are easier to access, easier to redeem and allows for cross promotion between in-store and mobile-store shoppers.
3. Social Commerce. Deny its influence at your peril. Vouchers, loyalty programmes, apps etc will increasingly stem from social media channels.
4. Innovative, Integrated payment facilities and gateways. The more common place mcommerce becomes the more solutions will facilitate secure transactions – an example being Apple’s iWallet.
5. Near Field Communication (NFC) enabled devices where NFC-enabled mobile phones can interact with other devices to allow for contactless transactions, data exchanges and other applications is fast gaining traction around the world. An example being an NFC-enabled parking metre acting with a mobile device for payment.

Customers are ready. Are YOU ready?

There are, of course, many aspects to consider before investing in ecommerce (and mcommerce) strategies that will suit your company’s specific needs and customer profiles.

Points of consideration would include the value-added services your mobi-site or app would offer, how it would integrate with your brick and mortar stores, what types of clients you would be targeting and so on and so forth.

Fact of the matter is though, for South African companies who want to be on the forefront of the retail ride of the decade, the time most certainly is now to think and act quickly.

Does your company have the insight, skill set and conviction to hop on?

Image: Park Ranger via Flickr.