Makro takes aim at Takealot
South African wholesale retailer Makro plans to become a dominant ecommerce player in South Africa.
The company has told MyBroadband it is increasing its availability on ordering platforms, redesigning its website, and optimising delivery systems to better serve customers shopping online.
This comes at a time when Makro has observed shifting consumer patterns with an increase in retail customers and drop in wholesale and commercial customers.
The retailer saw a 40% increase in online sales during 2020. Other retailers under the Massmart umbrella also recorded sharp increases – Game was up 77% and Builders jumped 111%.
This followed Massmart’s announcement in October 2020 that it had appointed executive Sylvester John, vice president for last mile delivery in Walmart’s North American division, to lead its ecommerce team.
Competing in this space will not be easy, however, with Takealot having built a reputation as a trusted online platform for ordering general goods and electronics.
JD Group – which owns Incredible Connection, HiFi Corp, and Russels – has also emerged as a potential heavyweight with Everyshop.
At the same time, Checkers, Pick ‘n Pay, and Woolworths are investing heavily in their ecommerce operations.
Makro is now investing in becoming a large ecommerce force in South Africa.
From a logistics perspective, Makro is currently using its 23 physical stores as its online distribution centres.
The company said given their warehouse style, size, and geographic locations, these are ideally placed to rapidly and conveniently respond to customer needs, both for pickups and home deliveries.
“We have excellent nodal coverage in all major urban areas across the country, including Nelspruit, Polokwane, Bloemfontein and Qheberha,” Makro said.
The company said it is gaining rapid and excellent experience with its curbside pickup facilities, which have proven popular with its customers.
It currently offers this service at four stores, while its new Qheberha (Port Elizabeth) store will be added in the next week.
Makro Ottery store in Cape Town.
Makro still has a lot of work to do to prove it can be a capable power in the ecommerce space, however, particularly when it comes to delivery times.
Makro told MyBroadband that its overall challenge had been ensuring more efficient in-store-picking and order-tracking.
“Both these issues have been remedied, or are in the process of being remedied, through deployment of a dedicated online service – including picking and packing staff – based in stores and with improved systems,” Makro said.
“In other words, we are fully integrating store-based online staff into the online capability because online fulfilment demands new ways of thinking and working.”
In addition, the company said it was investing in its online systems capability to achieve better systems integration with its courier partners, such as WumDrop, to improve delivery efficiency.
“Our focus here is to leverage our and Walmart’s logistics experience to ensure sustainable, quick but also cost effective order fulfilment,” Makro said.
“Wumdrop gives us the benefit of a crowdsourcing solution and the ability to grow direct deliveries to customers, improving our lead times and efficiencies.”
Makro has also partnered with OneCart to service same-day delivery of groceries and liquor, which are key to contending with similar offerings from Checkers and Woolies.
“12 Makro grocery and liquor stores are currently being serviced by OneCart with potential for growth into other areas,” the company stated.
On the consumer-facing end, Makro is seeking to improve its mobile and web presence.
Key to its ecommerce growth will be a mobile-first strategy, which will be underpinned by its inclusion as an anchor tenant on Vodacom’s upcoming super app, which will go live later this year.
The app, which is being built in partnership with Chinese ecommerce giant Alipay, will offer online shopping in addition to a range of other services.
Makro is also reworking its website for an improved experience in line with what is offered by its parent company Walmart.
This will result in a more relevant, frictionless experience for customers, Makro said.
“We have already implemented modest basic improvements that address site performance.”
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