CNA enters e-commerce fray

The retailer has overhauled its website and will now allow Edcon account holders to use their cards for purchases. By Craig Wilson.

Stationery retail chain CNA has revamped its website to allow for online shopping, with functionality that allows Edgars and Jet account holders to make purchases on credit using their store cards.

Edgars, Jet and CNA are all part of the Edcon group. The new website went live on Tuesday.

David Gibbons, e-commerce executive at Edcon who joined the group in December 2011 after stints at US companies Amazon.com and Zillow, says the group plans gradually to launch “e-commerce properties across the chain”.

He says a great deal of CNA’s products are already moving to digital distribution, particularly books, music, movies and games, so the move to online retail is a logical one. The company plans to offer a wide range of e-books to SA consumers.

With 3,9m Edcon account holders now able to use the service, Gibbons says many people without credit cards will be able to shop online. He says that the Edcon account holder base is “very active”, with as much as “half of group sales on account cards”.

Users wishing to pay with an Edcon card will receive a confirmation one-time password via SMS. Future purchases will only require that they input their card number.

Gibbons says there are benefits and downsides to taking a bricks-and-mortar retailer like CNA online.

“There are aspects of the business that are totally streamlined,” he says. “We don’t have to build a retail organisation from scratch and we have good relationships with suppliers and distributors in place, but because it’s such a large, traditional retailer it’s also been quite complex to integrate.”

At launch, the CNA site is offering 3 000 products, but Gibbons says this will be expanded with a far larger catalogue, including an extensive back catalogue, in time for Christmas. While the initial focus is on entertainment, he says products such as toys, cellular phones and accessories, and stationery will follow.

Gibbons says one of the key lessons about online retail he learnt during his time in the US is that “your effort needs to be 1% upfront and the rest post-launch”. He says many companies start out with huge budgets but spend it before the service actually goes live.

“Your critical investment is in customer experience and the product you make available,” Gibbons says. He says CNA won’t be airing TV or radio advertisements because they are “not always the best use of the budget for these kinds of businesses”. He believes quality of product offerings and word-of-mouth are far better suited to the task.

Contrary to perceptions, Gibbons says SA is in many ways a far easier market than the US when it comes to delivery mechanisms. “SA is smaller, so shipping and freight are easier here. In the US, you have to apply different sales tax depending on the state where the transaction takes place, and it’s just far larger.”

With the site redesign, Gibbons says the focus has been on getting the basics right, with a focus on “simplicity, search and product details” while doing a good job of “highlighting promotions on the site”.

“This is a very hit-driven business,” he says. “So our focus is on the promotional calendar, and product pre-releases and pre-orders that can ship on release day.”

Delivery of products will be managed by Courier It and will cost R55. Delivery will be free for orders over R350. “We can deliver anywhere in SA in three days. For Cape Town and Johannesburg, we can usually do so overnight.”

Gibbons says the big challenge is going to be generating traffic to the website and then converting that traffic to sales. “We’ve got eyeballs on every order,” he says. “We’re working really hard to exceed expectations.”

Though CNA may consider building mobile applications in future, Gibbons says a mobile website will almost certainly come first.

Prices online will be the same as in-store, but Gibbons say there are some online pricing specials to come. CNA will also look at offering delivery to stores to reduce further the cost to consumers. “We have to leverage our existing store presence with digital. We’re looking at in-store pick-up in future.”  — (c) 2012 NewsCentral Media