eCommerce Will Continue To Grow

MartechVibe Interview with Emakina for VMF South Africa

There has been innovation in the home delivery mobile app space in South Africa. Murat Yoldas Ertugrul, VP MEA, Emakina, talks about how South Africa has seen a significant increase in online shopping across all categories and why adopting marketing technology solutions is crucial to the survival of brands.

Emakina uses data-driven insights to increase personalisation and ROI. Tell us about your key wins. What were the challenges in convincing clients?

Emakina is known as the user agency, and we really live by that mantra, driving high performance for our clients across all their commerce activities is central to how we work. In today’s business, we know that data informs every aspect of any company’s decision-making process. Thankfully, we have access to more data than ever before, not only key business data but also a huge amount of precious customer data thanks to the advancement of customer-centric marketing technologies. This allows all of us — brands and companies —  to map out our customers in a much more personalised and granular way.  

We are seeing a digital and data maturity trend across industries that is clearly accelerated by the pandemic. As a full-service digital agency, we have full ownership over the digital transformation of our clients, so this trend definitely puts us in the top-ranked agencies in the industry. I believe that our ability to bridge the digital gaps across technology, data and creativity makes us the right partner to work with.

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Have marketers in South Africa started adopting marketing technology solutions?

Most South African brands are currently at the “emerging” or “nascent” level, meaning not many of them have evolved enough to be truly connected brands. Unfortunately, those who have were hit hard by the pandemic and decided to limit marketing spends to stay afloat. However, companies are well aware that they need modern tools and technology to gain a single view of their customers that would allow them to innovate and scale up at speed. 

As many consumers shifted to online spending worldwide, including in South Africa, it will become increasingly important for brands to understand that adopting marketing technology solutions is crucial to the survival of their brands.

Compared to European markets, South Africa’s eCommerce industry is still in its infancy stage as only 25 per cent of spending is done through digital channels. Nonetheless, the eCommerce sector is growing more than ever. The country’s average online spend in the first half of 2020 was up by 30 per cent compared to 2019. It’s clear that due to high mobile penetration, secure payment methods and the acceleration of changing spending habits due to the pandemic, South Africa will be propelled into a new digital era that will require the adoption of marketing technology solutions.

What are some significant changes in the behavioural patterns of consumers over the last year in South Africa?

As was the case for the rest of the world during the pandemic, and along with the region’s rising internet penetration, South Africa has seen a significant increase in online shopping across all categories. A majority of South Africans adopted new shopping behaviour, which will remain beyond the pandemic. According to a study by Nielsen on the impact of the COVID-19 on South Africa’s FMCG and Retail space, 68 per cent of South African consumers significantly reduced the frequency of their visits to physical supermarkets, with 37 per cent of them increasing their online shopping activities. 

As restrictions were placed on traditional retail stores during the pandemic, South Africa also saw a reduction of in-store shopping by 30 per cent. The population is becoming more “tech-savvy”, letting digital enter their lives slowly but surely. Most people are using their mobile phones, whether it’s for shopping or social media use. We see a huge opportunity for in-app shopping in the region that could become massive in the coming years.

However, at the moment, offline remains the main and preferred choice for South Africans. We’ve seen that the uplift in online purchases are particularly high when it comes to slow-moving goods, as opposed to fast-moving goods that remained available in physical stores throughout the pandemic.

For many South Africans, perception of price/quality is the main drive to purchase. Online shopping has given them the opportunity to easily search for, and buy, cheaper alternatives or find better deals (bulk or discount offers). We have also noticed that South Africans have developed a preference for at-home experiences that don’t require them to spend much money.  This has allowed for a stronger market penetration for digital entertainment platforms. 

For now, traditional shopping habits still dominate in South Africa. However, with almost half the population set to make an online purchase in the next year, it is clear that the eCommerce market has huge potential and will continue to grow year-on-year.

What are the key challenges that brands face today?

I think owning the digital brand experience is by far the biggest challenge companies face today, and this was definitely accelerated by the pandemic. We’ve been waiting for some kind of “return to normal”, but it’s becoming clear that things have changed and will remain this way for quite some time. 

There’s a huge change in customer behaviour when lockdowns were imposed, and people discovered new ways of consuming and shopping from the comfort of their own homes. This has made it crucial for brands everywhere to create digital platforms that are equal to, or surpass, their in-store experience, service and offering. 

No matter the sector, customers now expect convenient, seamless and personalised experiences across every touch-point. This requires companies to invest in the technology that will allow them to create a tailored experience and give them the flexibility they need. 

However, it’s not just about the customer’s expectations. From a business perspective owning the digital brand experience also means owning the data and insights that will allow you to truly understand your customers and their needs. 

From automated up-sell and cross-sell recommendations, personalised offers, prices, catalogues, shipping options and even data-driven marketing to push impulse purchases and promotions, digital commerce offers a shopping experience that will easily improve both conversion rate and average order value. 

The ability to automate part of your business is one of the biggest benefits of going digital. From streamlining sales automation with a self-service portal, bringing together marketing, sales and services through a performant CRM system and not losing information at any point during the process. These are just a few of the benefits digitisation can offer.

What makes Emakina’s approach unique? 

I believe we are fundamentally different in our philosophy and approach. We call ourselves the “user agency”. It’s clear to us that any interaction a user has with a brand impacts the value they attach to it, so we always empower our clients by building digital businesses and experiences that put their user needs first. There is no one-size-fits-all at Emakina, we look at the companies we work with in a holistic and individual way. 

Our experts always select technology partners that are aligned to each client’s specific needs — whether that is budget, scope, timing. 

Additionally, something we find extremely important in our line of work is our proven accountability. We are not just there as consultants who tell you what to do, we implement the strategies we’ve shared with you, making sure we have full responsibility and control over the quality of the outcome.

We understand and have strong insights on consumers, businesses and organisational culture in South Africa, as our Emakina ZA experts work exclusively in the region. However, Emakina’s international background allows us to bring insights from around the world into our projects.

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How have brands in South Africa addressed digital disruption?

A recent survey conducted by Deloitte showed that most organisations had already invested in market-established digital technologies, including cloud, cyber security and data analytics. Ninety per cent of companies were expecting to have invested in the cloud by early 2021, with the biggest motivations for senior leaders to embark on a digital transformation journey remaining the idea of creating a unique online customer experience, the delivery of innovative products and services, and the reduction of costs. 

This clearly shows that the key focus for digital investments will be for sales and marketing, operations, customer care and product development. 

Brands are realising they need to digitally develop if they want to grow or simply continue existing. Fifty-two per cent of respondents considered their companies to be “digitally developing”, and only ten per cent of them consider their company as being digitally mature. This shows that addressing digital disruption is critical and that there is major room for further digital transformation amongst most organisations in South Africa.