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  • Telematics: A driving force for South African e-commerce

Telematics: A driving force for South African e-commerce

02 June 2021

There has been unprecedented growth in online retail globally since the start of the pandemic. South Africa is no exception. With the vast majority of consumers and businesses having little alternative but to go online this has triggered exponential growth in e-commerce, which has had a knock-on effect on the logistics sector and telematics. Industry players have had to embrace innovative technologies to scale their operations to meet rising demand. With more vehicles on the road transporting larger volumes of shipments, innovative uses for a telematics solution that goes far beyond simple vehicle tracking is crucial to keep stakeholders and consumers connected, writes Bernard van der Walt, Sector Head at BDO South Africa.

Online retail in South Africa rose to 66% in 2020, according to a recent study by World Wide Worx. Almost three times the expected growth of 25% that was predicted three years ago. In 2018, the country’s e-commerce industry reached R14.1 billion – extraordinary considering the numerous challenges that have long hindered widespread e-commerce adoption in South Africa, such as cybercrime, parcel theft, high data costs alongside other socioeconomic and technological barriers. Off the back of low initial growth, emerging economies, such as South Africa, are witnessing the greatest shift to the convenience – and in some instances affordability – of online shopping.

With rapid expansion comes increased complexities

Now ranked as the 37th largest e-commerce market globally, the South African logistics industry has had to scale operations to circumvent supply chain disruptions and to meet ever-increasing demand. An increased expectation by customers to receive their purchases on their own terms – how, when and where – means that advanced telematics solutions are now an indispensable business tool and crucial to the sector’s future growth as it addresses the growing complexities of the e-commerce space.

Cutting-edge telematics solutions tip the scale in favour of companies willing to invest in increasing operational efficiencies, optimising processes, mitigating cybersecurity risks, streamlining supply chain flexibility and promoting the safety of drivers and packages. While building the right compliance process requires innovative technologies, the vast majority of fleets, many of which run into triple digits, recoup their initial investment within the first year – size depending. This is an economic win for companies, not just in the short run, but also with the long-term savings they can expect down the line.

But possibly one of the largest present-day benefits of telematics – to companies and customers – is the advanced levels of connectivity it can facilitate.

Staying connected to evolving workforces and digital-savvy customers

Advanced telematics and fleet management solutions collect large data sets to transform fleet vehicles into mobile data centres. Telematics is key to ensuring legislative regulations are monitored and met, such as driver training, driver fatigue, vehicle maintenance, vehicle roadworthiness and load specifics. While optimisation can outline the most time- and fuel-efficient routes and add new stops along the way, encourage more responsible driving, and flag required vehicle maintenance.

Fleet managers are also able to map a safer, more efficient future and can remain connected with drivers to provide hour-by-hour and day-by-day accuracy that is progressively becoming more intuitive, to the point where the braking system, for example, could react if it is detected that the driver is going too fast. Drivers can also be given mobile applications that allow them to report any issues to their fleet managers and teams in real time. These apps also have gamification elements that include social channels and entertainment, for when the driver is at a rest stop, and incentivise safety and upskilling, with the view to optimise driver engagement and improve their performance and driving habits.

Smartphones are also playing a much larger role and can work hand-in-hand with telematics technology to create seamless IT integration. Progressive innovation will eventually see deliveries being sent to customer’s exact locations, pinpointed according to GPS signals from their smartphones, a trend that the South African market is swiftly adopting.

Internationally the rise of Vehicle-to-Infrastructure (V2I) technology is gaining traction. This allows vehicles to communicate not just with each other, but with local infrastructure such as lane markings, road signs, and traffic lights using a Wireless Local Area Network. This allows for increased data to be captured which is then used to improve safety for drivers and cargo, and improve efficiencies with substantial positive environmental impact.

E-commerce has placed mounting pressure on expediting final-mile delivery between the warehouse and the customer’s doorstep. With as many as 68% of South Africans shopping more online since the onset of the pandemic, staying connected to customers is essential if businesses want to supercharge their customer service and entrench customer loyalty.

An increasingly digitally savvy customer base means that telematics solutions must be ever evolving to give customers a transparent view of their delivery, from point of purchase to point of delivery with real time ETAs, reports and strict delivery slots and destinations.

Beyond 2021

With online retail expected to continue growing rapidly – predictions estimate local sales of around R42 billion by the end of 2021 – telematics technology must continuously evolve if businesses are to remain competitive. This year will be a pivotal one for electric vehicle growth, which will include vehicles such as vans, semi-trucks and scooters. It is also likely that there will be an increased use of AI-based platforms which will allow infrastructure and all legacy systems to become fully interconnected, automated and visible on a single interface. And, one of the most exciting innovations we should start seeing in the next few years is the use of drones to perform deliveries, which is already happening overseas with great success.

What is certain is that increased efficiency can only boost an already competitive landscape and stimulate economic growth in emerging markets. After decades as a niche feature, innovations in telematics technology are coming to the fore as one of the key factors set to steer the e-commerce juggernaut.

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