A new report from Accenture finds that 95% of South African leaders (compared to 83% globally) feel e-commerce is growing faster than they can adapt and it's costing them to stay where their customers are. That's what I think. This common feeling of falling behind confirms how difficult it is to keep up with the pace of change.
Additionally, the cost of doing business is increasing as companies grapple with ad hoc systems, legacy technology, skills gaps, and poor infrastructure.
Meanwhile, competition among global e-commerce companies with extensive know-how is rapidly intensifying. The influx of best-in-class global companies into the South African market is reshaping industry dynamics and posing challenges for local businesses across the board.
“The days of simplicity in e-commerce are long gone, if they ever existed,” says Mushambi Mutuma, head of sales and commerce at Accenture Africa.
“Today's reality is that e-commerce is complex, dynamic, disruptive and competitive. In this environment, businesses are forced to make existential choices,” he says.
Accenture surveyed 1,300 global executives and decision makers across 12 industries and 16 countries to understand their perspectives on e-commerce and how they execute their strategies. Seventy-five of these companies were based in South Africa.
“Nearly 100% of South African executives surveyed believe they have made the right investments in e-commerce. We were surprised by the level of confidence these executives had. It may reflect that they are evaluating their e-commerce business channels on a channel-by-channel basis rather than as integrated capabilities that require continuous reinvention.”
“High levels of confidence may also stem from recent short-term gains at the expense of long-term strategy,” Mutuma says.
Redefining e-commerce
Accenture's report also highlights companies around the world that are doing things differently.
These champions are redefining e-commerce strategy, leading in revenue, profitability and non-financial outcomes, and delivering value to businesses and their stakeholders. They know how to conduct e-commerce without compromise.
“Our analysis of global survey data reveals three distinct groups of companies: Champions, Coasters and Compromisers,” said Sheetal Patel, Head of Retail at Accenture in Africa.
“This analysis examines seven non-financial e-commerce trends: e-commerce experience, business partner and vendor experience, conversion rate, customer satisfaction, Net Promoter Score, competitiveness with digital disruptors, and competitiveness with industry peers. We compared companies’ performance across outcomes,” she said. Say.
At the top of the list are champions, who make up just 20% of respondents. Champion did the right thing and took an innovative, life-centered approach to his e-commerce strategy, achieving 85% higher revenue growth and 31% higher profitability compared to his peers.
They are bold and are making big moves in terms of advancing technology, developing talent, and transforming organizational structures. Most importantly, they view consumers first as humans and aim to meet their needs holistically and effectively.
Coasters (approximately 55%) are operating as usual. While some have had limited success in getting to know their customers as people, change is slow due to leadership, cultural, and organizational resistance.
Compromisers (25%) pour money into e-commerce, chasing the latest shiny object without achieving results. They operate reactively, independent of customers' lives, and are hampered by their own organizational structures.
Do e-commerce right
“Being a champion means thinking beyond the silos and recognizing that staying ahead requires an overhaul of traditional models and existing structures. The State of Digital E-Commerce As the industry continues to rapidly evolve, champions stay ahead of the curve and overcome the risk of stagnation through continuous assessment, evaluation and continuous reinvention,” says Patel.
Becoming a Champion is underpinned by one fundamental principle: simplifying e-commerce processes to improve profitability and consumer experience. This report details his three paths observed across different organizational models and corporate structures.
The first is to prioritize investments that drive better experiences over investments in operations and talent. This is a path often taken by consensus companies where multiple leaders influence decision-making.
These organizations need to take a more holistic approach or risk being stuck with technologies that are fragmented and unoptimized.
Organizations with command-and-control management structures tend to prioritize operational and talent changes over investments in technology and experience, at the expense of building a strong digital foundation.
Many organizations in South Africa find themselves stuck in these outdated models and urgently need to transform to succeed in the evolving e-commerce environment.
The third and most desirable path involves creating a balanced effort where companies simultaneously build experience, technology, operations, and talent capabilities without spending a fortune.
This approach requires strong leadership with patience, vision, and clear alignment across the C-suite to move forward.
“At a time when e-commerce is evolving at incredible speed, our Commerce Without Compromise research reveals a path for South African businesses to tap into the vast potential of the digital market. We urge leaders and decision makers to act decisively by adopting an innovative, life-centered approach that champions the consumer experience,” said Mutuma.
“By bridging technology, operations and talent, we can transcend traditional boundaries and elevate businesses to champion status, achieving unparalleled profitability and growth,” he concludes.
