Jan Tukker, head of logistics for TFG, says, “OTD’s seamless management of our business brands over the past two years has ensured the group’s ability to meet customer delivery expectations. This has significantly increased customer loyalty towards our online brands."
OTD is an e-commerce fulfilment company in Southern Africa, offering approximately 40,000sqm of warehousing space in Cape Town and Johannesburg. Through a courier network that consists of more than 20 delivery partners, OTD handles product dispatches and returns, offering a cost-effective and efficient mechanism to close the loop from the order to delivery.
“We expect the real innovation for online retail to take place in the logistics area," says Tukker. "South Africa cannot just replicate the models we see rolled out in Europe and the US, we have to innovate around our specific socio-economic environment.
“This means finding ways to deliver online orders to people in the informal sector or who do not have formal home addresses. It also means looking for ways to leverage new technologies to make deliveries faster, more specific and more efficient.”
The Online Retail in South Africa 2016 report, released recently by World Wide Worx, reveals that online retail in this country will reach 1% of overall retail sales during 2016. Additionally, the report shows that online retail has continued to grow at rates above 20% since 2000.
Arthur Goldstuck, MD of World Wide Worx, noted that the current number of online retail sales also masks the extent to which a number of major retailers have exceeded the 1% online mark by a substantial margin, when compared to the majority of retailers who are not yet close to this mark, or have no e-commerce presence.
Tukker agreed with this assessment, saying, “We believe the leading traditional retailers will set the pace for growth in the retail e-commerce market. Retailers such as TFG, MrP, Woolworths and Massmart that are already leading the charge, will grow and thrive in this enabling environment.”
The online retail market in South Africa is still very much in its growth phase and TFG expects the online retail market to grow to 3% of total retail in the next three years. It anticipates that more than 50% of all online retail activity in South Africa will take place on mobile devices, making the agility and creativity of OTD’s service offering a critical element for success.
“The group’s continued relationship with the e-commerce operation will assist us with customer order fulfilment innovations, particularly those that will ensure that we are able to deliver everywhere our customers are – no matter where in South Africa that may be. With this in mind, our partnership with Media24’s e-commerce team places us in the ideal position to lead e-commerce in South Africa,” Tukker concludes.
The next three years will see TFG take its remaining brands online, bringing its online store footprint to approximately 25 shopping sites.
Ryno Bekker, GM for OTD, notes, “Online retail continues to grow exponentially and, through working with the some of the largest listed retailers in South Africa, the company has developed a deep understanding of what levers will further help drive e-commerce growth. We are committed to creating and innovating solutions to deliver a better offline customer experience.”
