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Today I was helping a customer pay online with their Nedbank credit card. Mastercard has implemented "Secure Code" technology, which means that after entering your credit card details you are asked for another "password", which is supposed to ensure that you are the owner of the credit card.

It's a nice idea, but it has been very poorly implemented by our local banks. They have spent no time or money educating their clients about this technology, so the first time they hear about "Secure Code" is when they are in the middle of an online transaction, and it usually confuses (and frightens) them. To give you an example of what a joke Nedbank thinks this whole thing is, have a look at their help page that customers are shown. Here are some extracts:

To use MasterCard Secure Code, you simply verify your identity and create your password or you may be able to use an existing passowrd you have with your bank.. Then, your card issuer will automatically ask for your password whenever your card number is used at participating online stores.

[Insert Issuer - Provided content]

I'm guessing that Mastercard provided a template for a help page that each of the banks was supposed to customise. Nedbank didn't even bother reading through it, so it still has the [Insert Content Here] messages, the typos, and the double full-stop at the end of the sentence. It gets worse:

Social Security Number
With increasing frequency, government agencies, schools, ulility companies and businesses rely on Social security numbers to identify individuals' records in their computer systems. This service uses only the last 4 digits of the primary cardholder's Social Security number to help verify your identity. Providing the last 4 digits of the primary cardholder's Social Security number does not give access to any of your Social Security records.

Social Security Number? That's going to confuse South Africans. Would it have been so hard to change it to say "ID Number"?

But there's more:

Create Your Password
Use [X] to [XX] characters and at least one digit to create your password. You may use letters, numbers, or any combination of these.

How many characters is X?

It just goes to show that Nedbank has implemented Secure Code because Mastercard is forcing them to. Nedbank themselves are not that interested in making the experience an easy and safe one for customers of our online stores.

Mark Forrester blogged recently about his experience in buying T-Shirts from Oddica.com, a US-based online store. The package arrived along with free stickers, badges and postcards. He was so impressed that he wanted to tell the world.

Contrast this with two online purchases we have made recently in South Africa

Shane bought a laptop bag from PCMall. Can you imagine his excitement opening this delivery? Me neither.

And today I received my new shiny iPod Nano from ZA Store:

Inventory of the contents:

- 1 x Large Jiffy Bag.
- 1 x Crumpled Invoice, titled "ZA Apple Online Store". That's not who I bought from?
- 1 x iPod Box and iTunes CD.

That's it. I checked the corners of the Jiffy Bag twice, just to be sure.

What a wasted opportunity for ZA Store and PC Mall. They made the shopping experiences completely unmemorable for us. The products themselves are great, and the price was fine, but in the future when I need a fancy widget to plug in to my iPod, I would have completely forgotten who I originally bought from.

Where was the ZA Store fridge magnet? The voucher to give to a friend? The hand-written note from the guy who packed my order, saying how jealous he was of my new iPod? The invitation to join the exclusive club of ZA Store customers who get regular freebies and first option on new products?

When 10 different online stores are selling iPods and Laptop Bags in South Africa, you have to differentiate yourself, and the only real way you can do this is when the package arrives at the customer's door. He will tolerate clumsy, poorly designed websites, but unless you blow him away when the product arrives you've lost a potential repeat customer. E-commerce doesn't end with "Thank you for placing your order with us". It continues long after that.

I just hope the SA E-commerce Awards judges take this aspect into account when they dish out the prizes later this month.

Get Elastic has written a summary of 29 Facebook applications that promote e-commerce. There are social shopping apps, deal-finders and even apps developed by fans of shops like Threadless. A couple of online stores have attempted to create Facebook apps themselves, but the results are not startling yet.

We have discussed an app for Yuppiechef that would compliment the Facebook group we created. It would probably revolve around the new Gift Registry service we launched, although we're still trying to iron out the details in our own minds before we commit any development time to it.

Social Shopping is definitely on the up, but only the quick and brave will benefit from it any time soon.

Amazon.com are busy rolling out a new design. Get a taste here.

This will create an interesting trend in site design. Everyone has been copying Amazon’s tabbed-navigation; now watch how they will all change to match this new-look left-hand navigation.

Also fun to think that the old Amazon look was “scientifically proven” to lead to the most conversions. Does this mean they were wrong, and a better solution eluded them all this time?

Or perhaps they really are on to a new trend, and we would be wise to follow their lead. After all, surely the world only needs one way of navigating an e-commerce site. We are used to following the Windows way of navigating desktop applications ("File Edit View" along the top, then some icons underneath, Ctrl-C always copies, etc), even though many different companies produce software. Shouldn't the same apply to websites?

Last week Shane and I spoke to World Wide Creative's clients at their monthly Heavy Chef Session. We encouraged this group of business owners to get ready for the e-commerce wave that is coming to South Africa's shores in the next few years. It's a matter of "when", rather than "if" it will come. You can read Fred's summary and view photos here.

Arthur Goldstuck has released his latest e-commerce research which confirms that we're on the brink of an upturn. A big reason for this is called the "Experience Curve", which he described as follows:

"Only once users have been online for around six years are they comfortable with the more challenging aspects of the Internet, such as e-commerce. And the number of people who have been online for six years or more has finally reached the level where it is making a substantial impact in online retail."

Read the full press release here. 

Last year Amazon.com did $10 billion in turnover. That’s about what Pick ‘n Pay and Shoprite did combined. Internationally e-commerce is huge. In South Africa we’ve barely left the starting blocks.

Are you interested in joining a small, dynamic team of pioneers in Cape Town who are at the forefront of the struggle to make e-commerce work in South Africa? We are on a journey to overcome the obstacles of fraud, logistics delays, packaging shortages and poor customer service. We are working on our own e-commerce sites (Yuppiechef.co.za, FlagKit.co.za, Bugzapper.co.za), consulting with other companies, publishing a book and making a movie. You will be exposed to it all, but will require specific skills in customer service.

[Update: This position was recently filled. We will publish new positions as they come available.]

I came across a soon-to-be-launched e-commerce site in the UK, Webtogs.co.uk. They have a blog at blog.webtogs.co.uk which is documenting their development journey. They are working through some of the exact same things that we are struggling with, so it is great to see their honest sharing.

Seth Godin wrote about his thoughts on delivery charges for online stores. Here is a snippet:

Two things have changed. First, Amazon has taught millions that free shipping is the way the world should work. As a result, anything more than free just feels wrong. Second, other merchants have realized that you can make 100% of your profit from shipping and handling and do quite well.

We are stuck between those two extremes on our e-commerce sites. We are tempted to go with "free delivery" as a major selling point, and to help encourage cautious South Africans that shopping online is a good idea

However, delivery is not cheap. We have found a great courier provider in Borntosend, but the cheapest that we can send even a small package is still over R50. On a R500 order, that's 10% we're giving up, which is about a third of our profit.

We've decided to take the middle-ground and cover our costs, but not make any profit off delivery. We charge R50 per order on Flag Kit, Bug Zapper and Yuppiechef. That means we take a bit of a knock on heavier orders, but usually we've made more profit on those already.

More from Seth:

Online, the economics are clear. Repeat business is what matters, and that happens when you surprise people (for the better). Not when you rip them off.

Kalahari offers free delivery on orders over R350, which is a nice incentive for customers to bulk up their baskets before checking out. I know that I've added an extra book to my order to get over the delivery threshold. This is easier for Kalahari because of their volumes - apparently around 1,200 deliveries a day - so they have been able to negotiate their courier company down to around R25 per delivery.

Perhaps if the DTI wants to encourage small business they should subsidise e-commerce deliveries. It would be a massive help in getting online businesses off the ground, and monitoring would be quite easy too - submit the invoices from your courier company and receive a R25 subsidy for each order.

We can only dream.

(Thanks Lisa for the link to Seth)

In the attached graph the green line is our traffic on Yuppiechef from 9th to 15th of July (ie 2 weeks ago), and the blue line is traffic from 16th to 22nd July (ie last week). In both weeks traffic dips towards the weekend, but otherwise the figures are pretty similar.

The odd thing is that last Friday (the third blue dot from the right) there was a large article in Die Burger punting our site and our products. Very exciting at the time, but apparently completely useless?

Well, we're still hopeful. We assume that at least a few people read the piece, and the next time they come across our site or a Yuppiechef advert the sense of familiarity that they have with our brand will help them in the buying process. As Fred says, branding is about consistency and pervasiveness, so any media coverage helps in the "pervasive" department.

Most gurus and books will tell you that repeat customers are more important than trying to gain new customers. They've already proved that they want to buy from you, and there is generally less customer service interaction because they've experienced the process once. Amazon have hatched a way to facilitate this with items like coffee pods, razor blades and washing powder. When you buy this type of product you are presented with the option to have Amazon deliver the same item at regular intervals. Convenient for the customer, and oh so profitable for Amazon.

This model works quite well for flags, which need to be replaced every year or so due to bad weather. We'll add it to the development wish-list.