TFG (The Foschini Group) has renewed their ecommerce fulfilment contract with Media24’s ecommerce services business, On the Dot (OTD), cementing both their belief in the future growth of the online retail market and OTD’s capacity to deliver.
According to Jan Tukker, head of logistics for TFG, the primary reason for the company’s 3-year extension of the contract is “OTD’s seamless take-on of our business brands over the past two years, and the fact that this has ensured TFG’s ability to meet customer delivery expectations. This has significantly increased customer loyalty towards our online brands, such as Duesouth, @home, hi, Sportscene and Totalsports.”
He added that OTD’s professional project management and IT development team have made it easy to integrate the ecommerce systems into TFG’s business. He explained that the previous two years had seen exceptional service on the order fulfillment side, with OTD continuously achieving the high standards set out by TFG, and recording an impressive success rate on customer order deliveries.
OTD has helped to ensure that TFG meets and exceeds customers’ online shopping expectations. OTD is the largest 3rd party ecommerce fulfillment company in Southern Africa, offering more than 40,000 m2 of warehousing space fully dedicated to ecommerce in Cape Town and Johannesburg, along with a state-of-the-art national distribution network.
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 customer’s order to delivery.
“The commitment from OTD and Media24 to invest in their online services strategy has allowed us to expand our online business easily and quickly,” Tukker said. “We expect the real innovation for online retail to take place in the logistics area. South Africa can’t just replicate the models we see rolled out in Europe and the US – we have to innovate around our specific socio-economic environment.”
He added that this means finding ways to deliver online orders to people in the informal sector or who don’t 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, managing director 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 ecommerce presence. Tukker agreed with this assessment, saying: “We believe the leading traditional retailers will really set the pace for growth in the retail ecommerce market. Retailers like TFG, MrP, Woolworths and Massmart, who are already leading the charge, will grow and thrive in this enabling environment.”
The online retail market in SA 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. They anticipate 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.
“TFG’s continued relationship with OTD’s ecommerce operation will assist us with customer order fulfillment innovations, particularly those that will ensure that we are able to deliver everywhere our customers are – no matter where in SA that may be! With this in mind, our partnership with Media24’s ecommerce team places us in the ideal position to lead ecommerce in South Africa.” Tukker continues.
The next three years will see TFG take their remaining brands online, bringing their online store footprint to approximately 25 shopping sites.
Ryno Bekker, General Manager for OTD, noted that “online retail continues to grow exponentially, and through working with the some of the largest listed retailers in South Africa, OTD has developed a deep understanding of what levers will further help drive ecommerce growth. We are committed to creating and innovating solutions to deliver a better offline customer experience.”