By Phillip Moepya
Socrates said, “Change is inevitable, so the best thing we can do is plan for it.” It’s a great sentiment but not many people in the world could have prepared for Covid-19 and the profound changes it has ushered in.
From a digital point of view the foundations needed to manage the accelerated reliance on technology, which we have experienced in 2020 have been laid over the last few years. Even before Covid-19 broadband connectivity and fibre-to-the-home have become more pervasive and many businesses have taken their offerings online to open themselves up to global markets.
The retail sector has embraced online services and e-commerce was already enjoying fruitful growth by the end of 2019. Then Covid-19 arrived, shifting consumer behaviour seismically.
Governments around the world and in Africa have been very directional and instructional in saying people need to stay at home and social distance. This has spurred the adoption of digital solutions with online shopping growing exponentially across the continent as a result.
Consumers who were already active online have moved more of their spending onto digital platforms and those who were thus far resistant to shopping online have been given an unavoidable push because of strict lockdowns imposed. There has also been a spike in the number of people researching their purchases online before committing offline, reducing the amount of time that consumers need to find what they are looking for.
A key case study of just how much shopping has changed recently will be Black Friday in South Africa. With restrictions on foot traffic, retailers will rely on their online presence to drive sales over a protracted period instead.
While online shopping has become more popular, there is another trend that highlights an interesting behaviour that could shape online shopping in the future.
In Nigeria we have noticed that more of our customers bank using our mobile app as opposed to internet banking on their laptops, demonstrating increased comfort levels among customers to engage their money on mobile as opposed to bigger screens. Mobile banking in this market is much more prevalent than it was three or four years ago. We expect to see this trend migrate to other industries, including e-commerce, with more and more people taking to shopping using their mobile phones as opposed to laptops.
While Covid-19 has changed consumer behaviour in the immediate term, retailers will be looking for ways to ensure the permanence of this change – something that is referred to as user stickiness.
The key to making people stick with digital shopping channels is personalisation. The advent of new technologies in e-commerce has already increased personalisation and, as a result, customer satisfaction. Algorithms, artificial intelligence, and cloud computing make it possible to gather data and insight into user behaviour, which helps retailers to further personalising the online shopping experience. Online stores are more likely to have personal insight into shopping habits and likely to serve much faster and deliver quicker than a bricks and mortar operation, making the experience efficient and more convenient.
Shaping new operating models:
Covid-19 will not just have a long-lasting effect on consumer behaviour, but it will also shape business models. Major -commerce corporates such as Amazon who have been operating e-commerce sites for a while have enjoyed incredible returns and Covid-19 has been good to their share price.
We have seen an increased consumer uptake in medium sized businesses, especially amongst health and beauty retailers such as DisChem, where are people are choosing to shop online, especially for non-prescriptive medications.
In the informal sector the sustained growth of digital solutions was accelerated by Covid-19. Mobile applications and card less payments to small business owners have spiked. This has also strengthened the ability of these business owners to apply for loans – which many of them are doing using USSD and cell phone banking applications.
For banks, this shift in behaviour provides the perfect opportunity to expand their role as a facilitator. It starts with creating digital ecosystems or marketplaces for businesses and private consumers.
We have begun the journey to reorganising ourselves to be a platform and ecosystems business and, in the future, this will mean being able to offer our customers added value to support the purchasing decisions that they make, including related products to meet their needs. Additionally, we will also be closer to small and medium enterprises and as a result better understand their needs in order to fulfil them through personalised service.
Banks are no longer just competing with each other only. In the past we might have been the only ones that could offer a loan but more frequently we are seeing telecoms and fintechs coming into that space.
Today we are collaborating with fintechs to create that holistic, seamless experiences for clients that considers a full view of their needs. Our role is to be a facilitator and to bring value creation. Value for businesses, value for ourselves as a business, and most importantly, value for the customer is critical moving forward.
Covid-19 has accelerated every facet of how we engage digitally. It has allowed more people to invest in making their businesses and homes digitally ready and there has never been a time when people have been as aware of their digital connections in terms of stability bandwidth and speed than now. There are many things which will return to “normal” in the world post Covid-19, but it is becoming increasingly clear that shopping will not be one of them.
Phillip Moepya is the Group Head of Experience Design at Standard Bank Group
PERSONAL FINANCE