The classified advertising business is busier than ever before, with new mobile channels bringing a younger audience to a well-established marketplace.

 

Offering users their choice of print, web or mobile access to the same large database of classfied ads has boosted traffic substantially. Ten years ago we thought we were doing well running 35,000 ads a month. Now we’re easily doing double that number.

 

There’s a generational shift in the media that people prefer. The 20-somethings who enjoyed Junk Mail in print when it launched in the 1990s have now partly moved to the web, but their grown-up children prefer to buy and sell via their mobile phones. It’s still the same experience at heart, just through a different medium.

 

South Africa is a very classifieds-friendly market. In some wealthier countries people tend to give their old stuff away. Here we have a large middle class of people who on the one hand want to make some extra cash from stuff they don’t need or want anymore, and on the other hand really enjoy a bargain. Classified ads fill a real need.

 

It’s in some ways a form of entertainment. There’s a strong community around Junk Mail and people are very loyal to the brand. There’s a certain element of trust built up. Here’s a typical story: A friend bought a used dartboard on Junk Mail from someone in another town and accidentally overpaid by R50. He told the seller to include the change with the dartboard when he mailed it – and sure enough, the dartboard arrived with a R50 note taped to the back. There’s a feelgood element to these interactions that keeps people coming back.

 

The popularity of classified advertising and the relative ease of setting up an online platform also means there is lots of competition. A lot of entrepreneurs look at it and think it will be easy to do. Fortunately size really does count in this business: The bigger your user base, the more likely it is that each advertiser will make a successful sale, and the more attractive your community is. At Junk Mail we plan to make the most of our advantage.

e-Commerce is delivering good profits – but only for those who do it right. And as the environment matures, shoppers are becoming increasingly demanding, meaning that only the best e-commerce strategies will succeed in the future.

 

Recent research indicates that the world’s best sites are seeing rapidly-growing revenues as more and more shoppers take their business online. But this isn’t a ticket to easy money. In mature markets, shoppers are becoming more discerning, and are more loyal to e-commerce sites that are intuitive and informative, rather than buying simply because the goods are for sale online. Forrester Research says in the US, companies will make $280 billion from online sales by 2015 – up from 2011 sales of $176.2 billion.

 

In the UK, recent research by yStats found that shoppers spent almost £35 billion on the internet during the first six months of 2012 alone, with many of them now starting to shop online using their phones. More than half of all smartphone owners have now used their phone to make at least one purchase over the internet.

 

Other UK research, by EpiServer and OnePoll, found, however, that customer satisfaction ratings are dropping. In 2011, the top 25 vendors received an average satisfaction rating of 63%. This year, that figure has dropped to 58% even though shoppers are buying more and more online. Most of them (57%) tend to buy only from a few favoured websites.

 

This illustrates that e-commerce vendors with a solid and carefully-planned strategy will eventually take the lion’s share of the growing e-commerce market.

Keeping pace with change

But shopping behaviour changes tremendously in a very short time. The landscape evolves so quickly that if you don’t watch it daily, you will fall behind. Now customers want more than just products for sale online. They want an experience – including product comparisons, reviews, facebook discussions; they want to book online and try it on in-store. The days are over where the retailer and his technology determined how customers touch and interact with the brand and products.

 

Today, it is all about being customer centric. It is the customers’ iPhones or iPads, and their social networks, that determine who, where and how people interact with a retailers brand and products.

 

There are key factors in keeping shoppers on a site and encouraging them to buy. These include ease of navigation, full integration with back-end systems, personalisation of the shopping experience, cross-selling, an effective multi-channel presence – including a mobile site, and regular communication with shoppers about new products they may be interested in.

Stay focused

It’s important to remember that an e-commerce platform is intended to sell products. This may seem obvious, but too many brands put the emphasis of their site on design – not selling. Don’t fall into the trap of putting the focus too much on attractive design. You need to focus on sales; so there needs to be a very careful balance between the design, the brand and converting sales.

 

Besides the content, attractive layout and high quality images, the site needs to be intuitive and offer added value – like presenting associated products in a logical way.

 

It’s about a lot more than offering affordable goods – you need to give the user what he is expecting to see at the right time, at the right place. Buying online should be a pleasurable experience – like dealing with an experienced salesperson.

 

Having a multi-channel presence can boost profits and improve the customer experience. But to be effective, a multi-channel strategy should ensure that the online and offline experience is completely in sync, allowing the customer to enjoy the same brand experience at every touch point.

Don’t drive away customers

In contrast, having an e-commerce site that does not deliver a good user experience is possibly worse than not having an e-commerce site at all. When the consumer is annoyed by the shopping experience, they are driven away. Their bad experience colours their perception of the entire brand, and not just the e-commerce component of it.

 

When retailers under-invest in their e-commerce platforms, strategy and integration into their back end systems, their sites cannot deliver what online shoppers are after - a frictionless buying experience across all key touch points.

 

Vaimo is an international e-Commerce expert and South Africa’s only Magento Gold partner.

In the last year, shopper marketing has enjoyed a bigger piece of the marketing budget than ever before. In fact, it is expected to show 21% year-on-year growth in budget allocation in 2012 globally. But what is the value of shopper marketing to different brand categories and how should marketers interpret this trend in the South African context?

This year independent marketing strategy consultancy – Yellowwood, built on the findings of its 2011 Engager Survey, by focusing on the FMCG category and assessing the relationship between brand-engagement and shopper marketing. In 2011, the survey measured South Africa's most engaged brands across a variety of categories and one of the key findings was that retail dominated the top 20 brands.

Jenny Moore, Group Research Director said: "We explored the role of brand engagement in shopper behaviour due to the focus that organisations are placing on shopper marketing today. Globally, shopper marketing is the fastest growing advertising category and in South Africa, although still in its infancy, it is likely to be one of the biggest growth areas over the next few years."

The survey assessed six of the most common grocery categories including: household cleaning, personal care, staple foods, frozen foods, tinned foods and dairy. It evaluated a total of 60 leading brands across the six categories - representing the repertoire of products which the average South African woman has in her shopping basket on a weekly basis. Brands within those categories were selected based on market share, marketing activity and the regularity of their appearance in brand surveys, among other factors. As the aim of the survey was to understand leading shopper brand dynamics, it was necessary to choose established brands.

Insight and measurement are the bookends for sound shopper marketing strategies. While shopper marketing is not in itself a new concept, technology has enabled marketers to study shopper behaviour more closely than ever before, allowing fresh and effective applications of shopper marketing concepts.

Six leading trends in shopper behaviour were identified against the backdrop of what Yellowwood termed 'the new shopper context', i.e. shoppers who have adapted to recessionary behaviour and have not reverted to more lavish shopping habits. This, for example, means that they are doing more pre-purchase preparation than ever before - often online, making lists of products to purchase and making fewer impulse buys, etc. This has greatly influenced the emergence of the six identified trends, which include:

• A focus on the in-store experience: This trend sees greater collaboration between retailer and manufacturer to create a memorable and appealing shopper experience - driving footfall and brand preference.
• The 'solution' shop: In a bid to disrupt habitual shopping, more retailers are offering shoppers 'solution' ideas. Be that in the form of 'dinner tonight' solutions such as those offered by the Knorr brand or home improvement solutions such as the bathroom in a box concept from Cashbuild. Not only does this concept ensure that the shopper buys all the products from the same range, but it is also a great way to introduce shoppers to new brands and products within the same environment.

The rise of the private label

The private label has become more powerful - especially during the recession, where more shoppers explored private labels and enjoyed their efficacy and price. To counter this, brands need to focus on innovations that add real consumer value (quality, convenience, health and wellness being some of the current values appealing to shoppers) and sound strategies to avoid the discounting trap.

Smart phones make a strong online presence critical

The massive increase in access to smartphones has changed the way that South Africans shop. Online shopping was valued at an estimated ZAR2bn in 2010, with 30% growth projections. This is compared to 7% for traditional retail growth. Leading online shopper activities are price comparisons and product information sourcing whilst content, payment and auto-replenishment apps will be future winners.

Shop for convenience

There has been a rapid increase in quick trip shopping patterns, facilitated by increased access to convenience stores in South Africa. Stores such as Woolworths Food Stores and convenience stores accounting for US$1.4bn revenue in South Africa in 2009 exemplify this.

With these macro trends in mind, Yellowwood's Engager 2012 study was able to define the role of brand engagement in affecting shopper behaviour and the implications of how we market to shoppers to get the greatest ROI.

With regard to brand engagement, there was also a clear indication that brand building is hugely beneficial, even in low engagement categories such as tinned food. And the way in which shopper marketing is used to complement brand engagement can drive purchase intent, if used appropriately for high or low engagement categories.

In high engagement categories such as personal hygiene, it's role is most effective to re-enforce and reassure shoppers. Furthermore, in high engagement categories, shoppers are more likely to engage with the brand on a variety of platforms. Whereas in low engagement categories, shopper marketing is effective at creating ambivalence and therefore swaying behaviour change in the aisle.

It is therefore critical that marketers understand the interplay between in-store marketing, traditional media and online media in building relationships to drive shopper behaviour in their category. It's not only about what happens in the store, at point of purchase but about how shoppers engage with brands along the whole purchase journey.

Selling goods online is a fantastic way for a small business to reach a bigger market than the local shop could ever provide -- and avoid some of the overheads associated with renting premises. But would-be online businesses need to become familiar with very different ways of being paid.

Getting an online merchant account so that you can take credit card payments directly can be a very involved and expensive process and not everyone will qualify. Fortunately, you don’t need a merchant account to trade online. There are alternatives available like UKash, FNB Cell PayPoint, PaySum1, Mpesa, SID (Secure Internet Deposit) and more: But how do you know which one is right for your business?

A payment service provider (PSP) should be able to help business owners answer that question. PSPs specialise in making online payments happen – they are the link between sellers, customers, their respective banks and card companies. One of the first things to look for in a PSP is whether they’re able and willing to guide you in making the right choices.

The last thing to do is to leave the decision about payment methods up to your web site developer. You absolutely cannot afford to abdicate this decision. These are things that go to the very heart of your business: How will you get paid and when, what fees will you pay, how does your PSP talk to your bank and your customers’ banks, will they help protect you against fraud and can your business grow with them?

At the same time you will want to make life as easy as possible for your web developer. Find a PSP who offers plugins for all the popular shopping cart applications your developer might want to use - you don’t want to have to develop anything from scratch. Ask if the PSP has a fully functional test system so that you can try transactions on the site before it goes live. Finally, make sure they offer tech support – your developer must have someone to call with any questions.

The relationship needs to continue long past the web development stage. Look for a PSP you can build a long-term relationship with. The costs of changing payment providers are high, especially if your business can’t afford to be out of action for a few hours or days. You don’t want to have to do it, basically – so pick someone you can rely on to meet your needs in the long run.

Payment needs are likely to change as a business grows. For example, if you start doing large numbers of transactions you should be able to negotiate a lower fee per transaction. Don’t get tied into a two-year contract with a high minimum monthly commitment – or any two-year contract, in fact. A 30-day notice period should be the standard.

Finally, ask your PSP about their reporting system. Banks will often deposit the proceeds of many small transactions into your account as one lump sum, which can make reconciliation very difficult. Make sure you can track all the traffic through your payment gateway and that there’s a good reporting system in place.

Online commerce can be scary for first-timers but many people have built very solid businesses online. If you’re supplying any kind of niche product or service, selling online might be the only way to build a sustainable customer base. The secret is to find the right partners to help you make it happen.