CNA makes e-commerce play

Edcon group is making a move to be a bigger player in South Africa’s e-commerce market, refreshing the online presence for its CNA stores and revamping the logistics and distribution processes involved with online purchases.

The group has on Tuesday (26 June 2012), opened its CNA chain to the online community through a revamped website which offers credit account purchases 24/7 with delivery typically within three days.

CNA is one of Edcon’s oldest brands, and is a well-established stationary, music, book and entertainment retailer.

According to David Gibbons, Edcon’s e-commerce executive who is responsible for developing and operating the online retail business for Edcon’s chains, Edcon currently has over 3.9 million credit account holders who make up approximately half of the group’s total sales.

Citing a recent study from World Wide Worx – as well as a survey run by MyGaming, which found that over 80% of gamers bought products online – Edcon highlighted the growth of e-commerce in South Africa, and CNA’s place in that enviroment.

“Online retail is becoming increasingly popular in South Africa, growing around 30% per year with no signs of slowing down,” the group said.

“Online sales have started to pick up nicely with better access to broadband. With 200 stores countrywide, it’s a natural addition to the CNA business to add a storefront online.”

“Opening up e-commerce to our entire base of account holders is another positive step to growing the Internet economy in South Africa,” Gibbons said.

The logistics of online

Along with the new design, CNA has re-engineered its entire e-commerce process.

A change in the logistics process sees the retailer holding stock in a centralised warehouse, as opposed to distributing products from stores, which will result in a more efficient fulfillment process, the company said.

The website itself is secure, uses SSL security and is verified by Entrust.

“Purchases can be made using a credit card or store account, with a one time pin on account payments adding to users’ security,” said CNA.

Even with the systems in place, Edcon’s Gibbons is not expecting an immediate flood of established credit account holders to convert to online buyers.

“Web audiences grow steadily (or at least, web audiences that convert to shoppers do.) I don’t anticipate a big boom, but rather steady growth in line with growth in awareness of the site and expansion of our online catalogue.”

Competitive market

Moving into a more focused position in the online retail market won’t be completely smooth sailing for Edcon either, as the group will be faced with more established players which have been operating exclusively online for a number of years.

Kalahari.com, Wantitall.co.za and Takealot.com have all become established brands in the online space, and have all shown strong growth over the years.

However, Gibbons remains confident in the group’s CNA brand’s ability to compete online, highlighting the company’s CNA store network as a key differentiator.

“It’s great to have credible competition online in SA and CNA will certainly benefit from the investment these sites have made in raising the awareness of online shopping,” he said.

“Besides Edcon credit and the Thank U points that account customers earn on online purchases, CNA enjoys extensive brand recognition; CNA is a trusted brand and the South African consumer is typically brand loyal. CNA’s broad store coverage provides great reach for promoting awareness on the online store.”

“The online/offline combination allows for a customer experience that pure-play sites cannot replicate; with features such as in-store returns and (in future) in-store pickup. The CNA business is significantly larger than any of the online businesses in SA and as such, our web customers benefit from the product selection and promotions that result from CNA’s strong supplier relationships.”

When asked about future Edcon brands making the shift to the online market, Gibbons is optimistic.

“There are certainly opportunities for other product categories within Edcon’s chains that could do well online. For now, though, we’re focused on CNA.”

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CNA makes e-commerce play