Measuring digital

touchpoints

TAKING CHARGE
OF YOUR ECOMMERCE DATA
STRATEGY

1
INTRODUCTION – USHERING IN THE OMNICHANNEL SHOPPER
The linear customer journey has been scrambled.

Today’s path to purchase includes multiple touchpoints both off and online. Brands are having to
prioritise and measure their data strategy to keep up with the demands of more informed customers
with a range of competing products at their fingertips.

The evolution of the omnichannel shopper, who uses a combination of brick-and-mortar and online
channels, is a massive opportunity for brands and poses a dangerous risk if ignored. The opportunity
lies in the data.

2
UNDERSTANDING THE ONLINE DATA OPPORTUNITY
Historically, manufacturers have relied on traditional data (e.g. ePOS, ex-factory, distributor data) to
measure value generation across the supply chain to achieve brand success. However, with the
pervasiveness of the internet and eCommerce, manufacturers now have the potential to source
additional online data (e.g. search data, eCommerce product listings, blog/social media data). This
can be integrated with existing traditional data to measure and draw tactical and strategic insights at
each customer touchpoint.

To capitalise on the eCommerce data opportunity, it is vital to understand the eCommerce

Defining eCommerce

When formulating an eCommerce data strategy, manufacturers need to understand the various
eCommerce segments and channels available to them.

eCommerce is broadly defined as the buying and selling of goods or services on the internet by
consumers and businesses. Over the years, eCommerce has evolved to include mCommerce which is
the use of handheld devices like cell phones or tablets to conduct online transactions.

eCommerce can be segmented into: B2B (Business to Business), B2C (Business to Consumer), C2C
(Consumer to Consumer) and C2B (Consumer to Business) each with their own unique
considerations.

3
eCommerce can be split between two main channels: retailer web stores (e.g. Pick ‘n Pay Online)
and online marketplaces (e.g. Takealot). An online marketplace is an eCommerce website platform
where third parties can sell their products or services to consumers. These online marketplaces can
also be integrated into social media channels (e.g. Facebook Marketplace) and search engines (e.g.
Google Shopping).

eCommerce has been growing steadily and has been further accelerated
by Covid-19

While the onset of pandemics, like SARS and more recently Covid-19, have accelerated eCommerce
growth, the industry has been steadily growing in popularity since Michael Aldrich first invented
electronic shopping in 1979.

Statista predicts that eCommerce will reach 22% of global retail sales by 2023. Retailers who fail to
incorporate eCommerce into their business models are at risk of falling behind. In 2020, retailers
Neiman Marcus, JCPenney, and J. Crew all filed for bankruptcy, while online superstore, Amazon is
now worth more than America’s largest nine retailers combined.

4
5
The eCommerce opportunity in South Africa is significant as it grows off
a small base

While the eCommerce channel in South Africa is relatively small (1.4% of retail industry. World Wide
Worx) compared to other more developed countries, the opportunity is enormous and rapidly
growing. According to an Accenture research report released in August this year, SA online sales are
expected to grow almost three times (19% p.a.) as fast as in-store sales (6% p.a.) in the period
between 2018 and 2023.

• eCommerce makes up only 1.4% of South Africa’s retail industry yet in the United States and
China it is closer to 20% (World Wide Worx, 14 May 2020)
• Covid-19 has kick-started this growth. SA eCommerce revenue saw a 24% growth in 2020 as a
result of the Covid-19 pandemic (Statista, 25 August 2020).
• SA consumers plan to increase their online shopping. 40% plan to increase their online
purchases post Covid-19 (McKinsey, August 2020)

As a mobile first economy it is essential that manufacturers also consider the mCommerce
opportunity with 96% of active internet users accessing online portals from their phone.

6
Despite it’s relatively small size, over the last decade the South African landscape has evolved to
include several pure-play eCommerce retailers (and online marketplaces) as well as traditional brick-
and-mortar retailers who have launched online offerings (hybrid retailers). It is worth noting that
while the online offerings of traditional retailers are still relatively small in revenue terms, they are
growing at a rapid pace.

Historically, electronics and media have dominated online retail, but the Covid-19 pandemic has
accelerated the rise of other categories (e.g. food and personal care).

• Takealot is South Africa’s largest online retailer with 33% market share in 2019 (Euromonitor
International). Its revenue was R7bn for the year ended 31 March 2020 (Naspers Integrated
Annual Report)
• The rest of the eCommerce market is fragmented with Superbalist second largest (5.5%
market share 2019) and Pick ‘n Pay third largest (4.2% market share 2019) (Euromonitor
International)

7
8
QUESTIONS MANUFACTURERS SHOULD BE ASKING
With the evolution of eCommerce and the increasingly complex shopper journey, manufacturers
need to gain insight not only at each one of the brick-and-mortar customer touchpoints, but also at
each digital touchpoint. However, data for data’s sake is unnecessary. It is important to understand
how to leverage off the data available to enable manufacturers to execute on their eCommerce data
strategy. Without these key insights, manufacturers are likely to fall behind their competitors.

We classified the questions manufacturers should be looking to answer into our 5P’s of eCommerce:
Placement, Product, Packaging, Pricing and Persuasion.

9
SIMPLIFYING THE CUSTOMER JOURNEY
To answer these questions, we simplified the customer journey by isolating the digital touchpoints
from the physical touchpoints, while still recognising that the omnichannel shopper may visit these
touchpoints in a non-linear way on their path to purchase.

While the physical touchpoints are well defined, quantified and reported on; digital touchpoints are
less understood and measured. Additionally, manufacturers have less control of these digital
touchpoints as they can’t dictate the search ranking, assortment, availability, and portrayal of their
products online.

It is becoming critically important that they can measure these touchpoints to inform their
eCommerce data strategy and optimise the positioning of their brands online.

To assist in drawing a comparison between the physical touchpoints and the digital touchpoints we
again classified the touchpoints into the 5P’s of eCommerce:

10
MEASURING THE DIGITAL SHELF
These digital touchpoints are known as the digital shelf. Here quantifiable metrics can be defined for
each section of the digital shelf under the 5P’s.

11
Now that we have defined the digital shelf and associated metrics, one needs a data-led approach to
measure the metrics and ultimately execute on an eCommerce data strategy.

Measuring metrics in a brick-and-mortar setting has historically relied on traditional data from ERP
systems (e.g. ePOS, ex-factory, distributor data) where the usage is negotiated between parties.
However, for measuring the digital shelf we need to integrate this traditional data with online data
(e.g. search data, eCommerce product listings, blog/social media data) to deliver the insights. This
online data is publicly available on the internet and can be harvested using technology such as web
crawlers and scrapers.

Data integration is vital

Importantly, data integration is key to combing the multiple traditional and online datasets to
provide a single view of the data and generating consistent insights. Looking at the datasets
individually, on disparate analytics platforms, will result in a fragmented view and a loss of
intelligence.

While online data is critical in calculating metrics on the digital shelf to make tactical decisions, it can
also be used to make broader strategic decisions around brand awareness, business models etc.

Data integration unlocks the true value for a manufacturer.

12
CONCLUSION – TAKING CHARGE OF YOUR ECOMMERCE DATA
STRATEGY
Consumers have evolved into omnichannel shoppers requiring brands to develop an eCommerce
data strategy that measures key performance metrics at each stage of the customer journey,
whether that be physical or digital, to succeed.

It’s not a question of when to invest in such an eCommerce data strategy in this rapidly growing
digital landscape, the question is how.

While it is possible to develop in-house capabilities to extract, warehouse and analyse large datasets,
the barriers to success are high. A defined data strategy, sophisticated data extraction software, Big
Data IT infrastructure and data analyst/science expertise are but a few requirements to develop in-
house capability.

The alternative is to partner with an external firm who has the depth and breadth of understanding
in data management and analytics to assist in formulating a data strategy, leverage off a robust data
platform and generate data-led insights.

13
Sources

https://www.shopify.com/encyclopedia/what-is-ecommerce

https://en.wikipedia.org/wiki/Data_integration

https://www.omnisci.com/technical-glossary

https://www.forbes.com/sites/nikkibaird/2018/03/13/what-digital-transformation-actually-means-
for-retail/#416dd6dc7038

https://medium.com/@mbertulli/4-essential-ecommerce-strategies-for-manufacturers-and-
wholesale-distributors-b68d4b52d2bd

https://www.warc.com/newsandopinion/opinion/customers-turn-to-digital-retail-during-
pandemic/3633

https://www.statista.com/outlook/243/112/ecommerce/south-africa

https://ecommercedb.com/en/store/takealot.com

https://ecommercedb.com/en/store/makro.co.za

https://ecommerceguide.com/ecommerce-statistics/

Rethinking The Ecommerce Opportunity in South Africa – How Retailers Can Pivot to Digital
Customers (Accenture)

https://www.planitmedia.co.za/post/connecting-physical-digital-retail

https://pathtopurchaseiq.com/digital-shelf

https://themediaonline.co.za/2020/05/covid-19-fastracks-online-shopping-in-south-africa/

https://weetracker.com/2018/10/26/the-african-e-commerce-saga-chapter-south-africa/

https://www.channelsight.com/blog/winning-digital-shelf

14