Heavy Chef of December 2012 – eCommerce

The last Heavy Chef talk for 2012 was centred around eCommerce in South Africa and the Heavy Chef team had managed to rope in some of the local heavyweights to share their insights and thoughts. The speakers were Kate Jansen of Zando, Jenna Bloch of Kalahari and Andrew Smith of Yuppie Chef.

I’ve jotted down the notes from each of the speakers, but if you are lazy I’d recommend skipping to my final thoughts.

Notes from Kate Jensen’s presentation.

Kate opened up with an interesting tell about Rocket Internet and a term they use called “industry voodoo” meaning the points in her talk weren’t about insights that are found on the internet at large, but insights from internal findings that come out of Rocket. She says “test things for yourself”. I guess that’s one of the benefits of being part of a global eCommerce giant.

Kate also talked about convenience not being negotiable. eCommerce needs to be as easy for the user as possible, they will be comparing price and they want lots of choice.

A couple of the more interesting points Kate raised was when she talked about the human element, especially the points around interaction and collaboration eg. social (network) browsing with friends. She also said merchandising is becoming searchandising, admittedly I hadn’t heard that term before, but it’s about displaying products to customers that include data to make the products more relevant. This is done by pre-filtering and sorting product lists to include data like availability, popularity and social data. Another buzz word to put in the memory bank.

Challenges and opportunity Kate talked about

Social Media – It’s not the be all and end all of a business, there are very few social media campaign examples, especially local ones, that have been profitable. She argues social media should be around 10% of your business focus.

Technical infrastructure – Computers crash so make sure you have great infrastructure and awesome IT support. Safe transactions are imperative and working to reduce credit card fraud is a huge priority.

Economic challenges – does the target market have enough disposable income to make a profit? Are there staff to run the business readily available?

Funding – eCommerce is not a half day job, it needs funding and dedicated efforts.

What’s next

• Personalsation – “does this eCommerce site have the human element I need”. This leads on to recommendations, filters and pre-sorting – personalisation works.
• More and more people have mobiles, but tracking mobile is hard.
• There is not enough funding in eCommerce.
• Loyalty is key.

Notes from Jenna Bloch’s presentation.

Jenna is from Kalahari and my initial thought was that presenting after Kate must have been tough because she covered so much.

The main points I picked up from Jenna was

• Vouchers – they help drive sales and loyalty.
• Pre-ordering products – watching a movie in the cinema then pre-ordering the DVD drives sales and loyalty. So making sure your site can provide that is important.
• Tablet commerce is a big deal.

Notes from Andrew Smith’s presentation.

Andrew from Yuppie Chef did well to just say Kate and Jenna had basically said everything he wanted to say and went on to talk about Yuppie Chef. He seemed very keen to distance what Yuppie Chef are doing from what Zando and Kalahari are doing by defining “4 types of eCommerce” which are:

1. Traditions retailers selling online (e.g. Mr Price)
2. eCommerce companies born within bigger corporates (e.g Kalahari being owned by Naspers – they have funding and crossover)
3. Venture backed eCommerce launched with a lot of hype (e.g. Zando)
4. Garage startup selling physical items (e.g. Yuppie Chef)

Once Andrew had put Yuppie Chef in a proverbial box he went on to say packaging is the only physical touch point customers have with an eCommerce company, which is why they take so much care in their packaging and hand write a card for every customer.

Yuppie Chef also launched their own product – the cookie letter press set, which is a lovely tactic to differentiate themselves in a price orientated market.

Traditional brick and mortar retails have left the door open. The standard of retail in South Africa is pretty low. If retailers were doing everything right there would be no need for Hello Peter.

In eCommerce you can really get to know your customers and you can speak to them in a personal way.

Fulfilment is expensive! They started using the Post Office to fulfil Bug Zapper orders and it was a nightmare so now they use couriers.

======= Final Thoughts =======

Overall I really enjoyed this particular Heavy Chef talk and I found the speakers did a great job and offered a lot of value.

These are the key points I took away from the presentation and the ideas I will be sharing in the near future:

• It is early and difficult to do mobile (if you want to be rational and track ROI) but your shop has to work on a smartphone.
• Display relevant products: sort, filter and allow users to search your products better.
• Social media and socially connected browsing is a big future trend the will introduce the human element, drive trust, loyalty, display more relevant products and increase conversions.
• eCommerce is not a half day job or something an intern can set up. Do it properly and allocate proper funding. (I’ve been saying for years the budget of building an eCommerce store has to come out of the Capital Expenditures Budget not Marketing – it’s a store, not a billboard)
• Tablet commerce is a big deal. I was surprised Jenna was the only speaker that seemed to make a big deal about this. People with tablets are the ones spending money.
• With digital you can get to know your customers a whole lot better. You can talk to them individually and you know a lot about your customers. Personalise the communication with your customers.
• Traditional retailers have left the door open for eCommerce, but not for long.

To finish off I got the impression that all the speakers seemed be very conversion driven and rational in the way they approached eCommerce. All the speakers talked about loyalty, but none of them touched on building brands in the traditional sense.  In my opinion eCommerce needs to be less rational, perhaps worry less about conversions and ROI and more about building loyalty in brands by pushing out cool ideas.