The Click & Collect Christmas Boom in South Africa
E-commerce is set to increase in popularity and consumer uptake in South Africa this year due to a number of supporting trends. A greater variety offered by e-tailers and the evolution of tech offerings, such as shopping apps. It looks like the anticipated e-commerce boom in South Africa is finally taking off — opening many more doors in this emerging economy.
Last holiday season, many South African consumers passed on the crowded malls and instead turned to online stores to buy gifts for their loved ones. As the reports have come out of trends in consumer behaviour over the 2016 Christmas period, the biggest surprise was the increase in popularity of click and collect orders. Click and collect is the delivery option for online consumers to pick up their parcel at a local store instead of waiting at home for the deliveryman to ring the bell. This is an existing new trend of consumer behaviour since it demonstrate a level of trust in postal services, something South Africa has lacked for almost a decade.
Click and Collect as a delivery method is a model imported from overseas, companies such as Doddle and CollectPlus are taking UK by storm. Refined for the for the South African market, Pargo launched in 2015 and is still the only click and collect service in South Africa. Lars Veul and Derk Hoekert of Pargo saw the need to develop the e-commerce landscape after coming to South Africa to launch Groupon in Cape Town. They were surprised as many others, by the massive potential in the logistics space with the post office being on strike every second day. While others were hesitant to enter into an industry where a massive challenge would be to change people’s mindset about reliant deliveries, Lars and Derk went straight for the horn. They wanted to put an end to frustrating e-commerce experiences and help mature the online shopping landscape in South Africa. Their timing could not have been better, only weeks after Pargo launched in Cape Town, the post office entered into a year long, nation-wide strike, allowing Pargo the chance to prove that deliveries can be convenient and safe and does not have to include waiting around for parcels.
Pargo handled 25% more parcels for 26% more customers between October and December 2016 than it did in the same period in the previous year. Volumes in November alone were up by 29%, while December was ahead by 25%.
Derk Hoekert, co-founder of Pargo, said: “We were happy to see that our customers showed increased faith in our delivery service last year and shopped closer to Christmas. It shows confidence in Pargo and confidence that they would be able to collect their presents in time for Christmas. This holiday season really gave us the opportunity to show our customer that we are a service they can trust.”
The festive season demonstrated many advantages of e-commerce and the click and collect delivery service. It enabled retailers such as Spree to offer next-day delivery to a local convenience store in the Pargo network, up to the day before Christmas. The last Pargo parcel was collected at 10.52 pm on December 24 in Woodlands, Gauteng. It was also reported that customers preferred to pick up near to where they were shopping in-store, such as Clicks and Postnet, that are located within shopping malls. Customers have also expressed that the extended hours of operation, in some cases 24 hours, have helped reduce the traditional stress attached to the annual Christmas shop. Customers can pick up their parcels before work, after work, during lunchtime or at the weekend.
The growth comes as Pargo’s customer base also expanded: new brands including Spree, Wellness Warehouse and the Foschini Group offered Pargo as a delivery option for the first time in 2016, joining Leisurebooks and Homechoice and taking the number of Pargo’s Click and Collect retail partners to more than 200. It seems like the South African consumer will finally jump on the click and collect bandwagon in 2017.