The growth of Africa’s ecommerce future lies offline

Ecommerce in Africa has experienced massive year-on-year growth. Despite infrastructure challenges, ecommerce is expected to see 40% annual growth for the next ten years.

Africa, outside of South Africa, is a mobile-first, and largely unbanked economy. With mobile penetration reaching close to 70% on the continent, technology has shown extraordinary innovation, especially in the fintech sector.

The link between digital media and ecommerce is well documented and easily trackable. For this reason, we’ve scrutinised case studies highlighting the role social media plays in ecommerce success, and have ploughed expertise, time, and energy into building campaigns.

However, it is critical to bear in mind that despite the growth, ecommerce still represents a fraction of retail spend on the continent. eCommerceAfrica reports that in 2016, ecommerce sales globally will reach almost US$2-trillion. Africa’s stake in the pie? Just 2%.

The Harvard Business Review says “more than 20 years after the internet was opened to commerce, the Census Bureau tells us that brick and mortar sales accounted for 92.3% of retail sales in the first quarter of 2016”.

By 2020, consumer-facing industries in Africa will grow by over US$400-million according to McKinsey and Co. Add to this the fact that 40% of Africans live in urban centres, and, according to the same McKinsey report, “the formalisation of retail will dramatically increase in coming years”.

There’s no way to link shopper’s offline buying habits with their online ecommerce exposure and activities

Given the massive dominance of offline sales, why have we as digital marketers focused so heavily on ecommerce campaigns?

Simply put: measurability. There has been no way to link a shopper’s offline buying habits with their online exposure to brands. All success has been projected by probability and theory, with marketers being unable to determine scientifically which channels influenced purchases and to what degree.

Measuring footfall and spend

This has changed in a way that will fundamentally impact retailers, manufacturers, and marketers alike. Facebook recently announced its Offline Conversion API — technology that for the first time allows for a direct link between Facebook advertising and offline sales activity.

How is this going to work?

• Most larger retailers already have transactional and loyalty data — usually demographic and basket information. This data can outline habits and predict shopper trends. And, as Africa’s retail market becomes more and more formalised, the width and depth of consumer data will increase exponentially.
• With Facebook’s Offline Conversion API, data gathered on retailers’ point of sales systems is linked to a shopper’s loyalty card, and can be looped back to Facebook.
• Facebook matches the retailer’s data to data in its own databases.
• Reports, on an aggregate basis, highlight the purchasing behaviour of shoppers who saw an ad on Facebook with customers who did not.

For the digital marketing community, this development unlocks a whole ecosystem of different verticals engaging and cooperating. Marketers, of course, will need to be smart about the data being used, and be clear when defining their objectives, their target market, their brand relationship with existing clients, as well as how to engage new markets.

And that’s where the magic of social media can really flex its muscles: On a continent comprising 53 countries, and with somewhere between 1500 and 2000 languages spoken, the adaptability and precision targeting of social media ads allow for an extremely personalised experience.

Marketers can finally recognise unique purchasing trends in the offline world, and adjust, adapt, and tweak campaigns based on measurable uptake, all in real time.