SA retailers and manufacturers are increasingly embracing digital platforms like e-commerce marketplaces, super apps, and social commerce to form a cohesive omnichannel strategy, aimed at reaching customers wherever they are.
According to Gareth Paterson, director of client strategy at NIQ and GfK SA, this approach is becoming essential as competition in the local market intensifies.
E-commerce’s growth worldwide has rebounded since the pandemic, with digital platforms, especially marketplaces, growing faster than overall e-commerce sales, he said. However, in SA, competition is heating up with Amazon’s entry into the market, prompting local players to innovate.
Retailers in the country are responding to the rising competition by introducing features such as same-day grocery delivery, subscription services for unlimited deliveries and broader product selection. This innovation is driven by pricing pressures and product diversity from international players such as Temu and Shein.
Paterson said modern customer journeys now combined both physical and digital touchpoints, with consumers interacting across various platforms, including third-party marketplaces such as Takealot and Makro, super apps like VodaPay and social platforms like Facebook. This shift requires retailers to adopt a more comprehensive approach to customer engagement.
Marketplaces are emerging as a significant growth driver for retailers, not just through direct sales, but also through advertising and commissions from third-party sellers.
For large retailers, Paterson said marketplaces offered the potential to introduce new product categories without managing inventory, improving visibility and search engine optimisation (SEO).
For small and medium-sized enterprises (SMEs) and emerging brands, marketplaces provided a low-risk way to expand their reach, tested business models and engaged new audiences without long-term distribution contracts, he said.
As omnichannel retail accelerates with the rise of mobile shopping, AI and augmented reality, retailers and manufacturers faced the challenge of understanding and optimising the various channels they operate in. Paterson said they should consider factors such as partner fit, pricing strategies, customer engagement and the balance between defending existing revenues and leveraging new opportunities in marketplaces.
Ultimately, success depended on meeting consumers where they were and tailoring strategies to the unique demands of each channel.
What are the key challenges and risks retailers face when balancing traditional store operations with third-party marketplace offerings, and how can they mitigate these risks while still benefiting from the marketplace model?
Retailers that offer other retailers the opportunity to use their marketplace face the challenge of ensuring that third parties provide brand experiences and quality standards that are consistent with their brands. The consumer will blame the retailer that owns the platform if a third-party seller sends them poor quality merchandise or fails to meet promised delivery dates. This can damage their reputation and brand. To mitigate risks, retailers must establish strict quality control measures, monitor third-party performance and ensure transparency in customer service processes.
The complexity multiplies if the retailer is handling the logistics for third parties. Another challenge is that retailers risk losing sales to other parties on their platforms. Meanwhile, retailers that sell through other marketplaces and platforms will generally need to pay for that privilege and risk diluting their own brands and relationship with the customer. The key is to balance defending existing revenue streams while capitalising on new growth opportunities.
How significant is the role of super apps, like VodaPay and Capitec, in reshaping consumer behaviour in omnichannel retail?
They offer a consolidated platform where consumers can access financial services, shopping and lifestyle options in one place. For retailers and brands, these apps — along with third-party marketplaces like Takealot and delivery services such as Uber Eats — offer instant access to large consumer bases while reducing costs associated with payment gateways, security and delivery logistics. This creates opportunities for sellers to operate in the e-commerce space at lower costs, while offering buyers a broader variety of quality products. It’s worth noting that super apps aren’t yet as popular in Africa as they are in Asia — but the space will evolve fast in the years to come.
How are retailers adjusting their omnichannel strategies, and which sectors within the e-commerce market are experiencing the most innovation and what has driven this change?
Sectors like fast-moving consumer goods (FMCG), technology and durables are seeing significant innovation. Retailers are focusing on integrating online platforms like e-commerce marketplaces, mobile apps and delivery services with their brick-and-mortar operations. They are trying to get an edge with innovations like same-day delivery and subscription services for groceries. Expanding their product ranges to remain competitive in the face of pricing pressure and product variety from international players like Temu and Shein is a priority for most retailers.
Some retailers are adding innovative features to the mix, such as augmented reality try-on services for beauty and cosmetics, and bar code scanners, so shoppers can do price comparisons and order online when they see something they like in a shop. Into the future, we’ll see more hi-tech features added to the mix, such as the ability to use photo recognition for product searches in real time. In the post-Covid world, retailers must provide a coherent experience across both digital and real-world touchpoints to win.
What role does social commerce play in SA’s omnichannel landscape, and are there opportunities for smaller brands to leverage this trend effectively?
Social commerce is becoming part of SA’s omnichannel landscape, particularly as consumers increasingly engage with brands via platforms like Facebook and Instagram. Smaller brands can effectively leverage this trend by using social platforms to reach new audiences without significant distribution costs. Social commerce, combined with marketplaces and mobile shopping, could provide SMEs the opportunity to test and refine their offerings before scaling through other channels.
How do SA consumers’ expectations around delivery speed, product variety and pricing compare to global trends, and how are local retailers adapting to meet these?
SA consumers’ expectations for fast delivery, wide product variety and competitive pricing align with global trends, especially with the entrance of international players. Local retailers are adapting by innovating, as mentioned above, by offering same-day or one-hour delivery, expanding product lines and launching subscription services. As competition increases, SA retailers are also using data to better understand their customers’ purchasing behaviours, optimising their omnichannel strategies to stay competitive despite economic challenges like high interest rates.
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