While it’s competitive out there, there’s room for aspiring retail giants in-the-making to establish themselves in the sector as key participants.
The retail industry has been aflutter not only in South Africa but globally.
In 2017, we saw retail giant Stuttafords close shop, and Edcon was seen to be reconsolidating its brand compliments – River Island and Mango standalone shops closed down. On the other hand, their JX Exchange brand rose with its own standalone shops in leading mall establishments like Rosebank in Johannesburg.
This is only a tip of the iceberg. With that backdrop, the rise in eCommerce activity is well timed to rival to these brick and mortar establishments, the transport and logistics sector has successfully risen to meet the resulting challenges.
Retail’s impact on transport and logistics
For us in the transport and logistics sector, this change we’ve been witnessing opened proverbial ‘doors.’ We’ve been compelled to start thinking about how to restructure our offering in order to better meet the increased demand of what North America calls, ‘last mile deliveries’ - smaller consignments in shorter distances at higher frequencies.
This is where the rise of eCommerce meant that the volume of our work that interfaces ordinary people, not just businesses, increased dramatically. This has meant a lot of changes, notably, our customer service lexicon which changed from addressing just business establishments and corporations to addressing people, with feelings and access to social media; (read: quick and easy publishing to audiences of millions).
And if you know what social media can do to a brand, you know to take it seriously. But more importantly, how did we respond to this seemingly natural growth eCommerce progression? And how are we meet this increasing demand for‘last mile deliveries’across a country with a unique spatial distribution in both urban and rural areas?
Business models will have to change
Firstly, some industry players reconfigured their businesses, bringing together business units that complemented each other in service offering. A great example of this consolidation is the Takealot.com story.
While the progression of this story was not necessarily a direct response to the changes in the consumer landscape, the timing made it such that when the mergers and acquisitons were done, Takealot.com was well ahead of its competitiors, primed to meet consumers’ growing demands.
Takealot.com’s merger with Kalahari.com, the company’s acquisition of what was then Mr Delivery and is now Takealot Delivery Team (and the subsequent extension into on-demand fast-food purchase through Mr. D Food). The extension of the company footprint continues through Superbalist. This reconfiguration and consolidation asserted the Takealot.com group as the ultimate one-stop destination for eCommerce.
As customers change, so too will businesses
When eCommerce grew and consumers became relatively more comfortable with online purchasing, Takealot.com ensured that there was a great deal to choose from product-wise in their online store, and that after purchase, transport and logistics would be handled in-house, without the hassle of dealing with another supplier.
This is not to say that the customer service is always perfect or that the business itself is perfect. But there is something to be said about a business that anticipates demand in service, meets it and then adds more value to its target customer base.
Related: How digital transformation can help retailers capture and grow market share
Secondly, while the Takealot.com story is one of business-savvy led by one of the country’s leading entrepreneurs, Kim Reid, the opportunities for entrepreneurship in the transport and logistics sector, because of this retail flux opened up.
The increasing eCommerce by default, welcomed entrepreneurship as one of the solutions to meet industry challenges. Over the last couple of months, we have seen travel and logistics startups emerge and grow to serve this urgent need for‘last mile deliveries.’Startups such as Think SCOOTworks SA, rent-a-scooter, Boltifi, Primetime Express, Postex, and many other small businesses have mushroomed and are actively plugging the gap.
Related: 6 Trends and the future of South African retail
We all know how important entrepreneurship is for our economy in boosting economic growth, creating employment and alleviating poverty. So, entrepreneurship addressing this gap is not only great but it is a very welcome development in South Africa.
Thirdly, the role of technology in this flux has been an interesting one. Technology has been the golden thread that connects internal industry touchpoints like operations and supply chain management, the industry’s verticals and ultimately, the industry with the consumers it serves.
It’s been an interesting disruptor, enabling smaller players and entrepreneurs to enter the space with less overheads, but with capabilities closer to some long existing transport and logistics players.
Rise to the challenges
The transport and logistics sector is under pressure to meet (head-on) the challenges from a dynamic consumer landscape, and directly address them. While the sector’s largest contribution still comes from business-to-business transactions, the rise of eCommerce has meant that the sector directly engages with consumers.
The success of this direct engagement is the result of the tri-factor of business savvy, technology and entrepreneurship. There’s more to come from us because in this industry, as with many other, change is the only constant.