Inside Yuppiechef’s omnichannel retail strategy
by Kim Penstone. After years of claiming that it had no intention whatsoever of entering the physical retail environment, because “ecommerce was the future of retail, and eventually this channel would win and the others would die”, one of South Africa’s most-prominent online retail brands announced that it was wrong. On 1 October 2017, Yuppiechef officially opened the doors to its first brick and mortar store in Willowbridge, Cape Town.
“If your only differentiator is that you sell online, then you’re probably going to struggle in a world where every retailer will have an online channel of some sorts soon,” he says simply.
There’s no ignoring that logic. There’s also no ignoring that Yuppiechef isn’t alone in its move from clicks to bricks. Internationally, hot online brands, including Bonobos, Warby Parker and Indochino, have taken their brands from cyber space into retail space. Even Amazon has opened a couple of book stores, and just recently entered into the retail space in big way with its purchase of US specialty food store, Whole Foods. So if it’s good enough for Amazon…
Reasons the same
The market places might be completely different but the reasons for taking the omnichannel route seem to be much the same:
Internationally, according to Smith, ecommerce is bigger than it is in South Africa, but not that much bigger when you talk percentages. In the US, it’s estimated that ecommerce only accounts for between 5–6% of total retail. In South Africa, he says, that figure is sitting at around 2%. That means that 95% of retail in the US, and 98% of local retail, takes place in the physical space. It would be foolish for any brand to ignore those figures (references: Remarkety.com and World Wide Worx).
The challenge of delivery and order fulfilment is real, and doesn’t come cheap. It’s particularly expensive in countries such as the US and SA, where populations are spread over vast areas. In fact, says Smith, “retail rental costs about the same as door-to-door delivery of an online order”, so don’t go thinking that ecommerce is cheaper than the real thing! (It goes without saying that the South African postal service hasn’t done local ecommerce any favours, either!)
People like to shop in real shops. Especially South Africans. In fact, South Africa has one of the highest rates of shopping malls per GDP in the world.
We also don’t have a strong catalogue culture, which has hastened the acceptance of ecommerce in countries such as the UK because the population is used to selecting goods without actually handling them.
In SA, you may add to these reasons the low connectivity rates and high data costs, but Smith dismisses these as “convenient excuses”. The real reason, he says, is that while retail owners talk about online and offline and omnichannel, customers don’t see it that way.
“They see a brand as a brand, and there is an expectation that the brand will be available to them, not as either an online or a physical store but as a single entity, giving them the freedom to interact with the brand on their terms, whenever, and wherever it suits them.”
To this end, the Yuppiechef team has made some small but vital changes to the brand to give its customers a unified experience, whichever channel they choose to use. The .com has been dropped from the logo, brand colours have been adjusted to suit a physical environment, and the language in communications has changed slightly. To keep the digital interface alive in-store, online customer reviews have been integrated into price labels, and all products have QR codes to enable customers to access additional product information.
“We had no idea what to expect from our first store but we are very happy with the reception… we are still encouraged that, every minute we have been open, there have been people in the store browsing and buying. It isn’t just friends and family buying a spatula out of sympathy for our new venture!
“We had a really excellent first month, well-above our expectations. It was a mix of Yuppiechef faithfuls who wanted to experience us ‘in the flesh’, and people who knew about us but were never brave enough to shop online, and some people who had no idea who we were. Customers have loved the store, and some of the omnichannel features, like being able to buy something that isn’t in the store, and have it delivered home. We have a lot to improve and experiment with, but the signs are encouraging. We have had to be realistic about growth in these tough times but, with the right expectations and planning, it is still possible to be upbeat about the season. If we focus on promoting good value items to our customers that still have enough margin, we can all win.”
He adds that, although the company will need to have a number of stores before offline sales make a significant impact on overall numbers, there have already been benefits to opening a store: “Many South Africans are still nervous of online shopping and, even if they don’t visit our Willowbridge store, they will gain confidence in our brand after reading or hearing about our physical presence. There is something reassuring about knowing you can visit a store if something goes wrong, even if you never do.”
To a greater or lesser degree, Smith believes that people have a slight bias against purely digital brands, because they can’t touch or see them in real life. When you give customers bricks and mortar, you give them something real, that they can trust.
Interestingly, although the brand sells the exact same products, at the exact same pricepoint online and offline, customers have expressed their worry about overextending their credit cards now that they have the ability to shop in a real store.
Smith concludes: “There is no doubt that ecommerce will continue to grow and the challenges overcome, but offline retail will make up the majority for many years to come.” Or, as he said in his email to customers on announcing the change: “Shops and malls are not going to disappear anytime soon.”
If you can’t beat ’em, join ’em.
Kim Penstone is a freelance journalist, specialising in marketing, media and advertising. Over the past 15 years, she has worked for a variety of leading marketing industry publications, including Marketing Mix, Marketingweb and Brand Magazine, and in her freelance capacity contributes regularly to specialist titles, such as Brands & Branding, AdFocus and MarkLives. She has recently started a blog, www.runlikeamom.co.za, which is completely unrelated to the marketing industry.