#FluxTrendsMasterclass: Why innovation is less about tech and more about thinking smarter

Vusi Mthimunye is the chief operations officer of eButler - a grocery shopping service that reaches every community in South Africa: from townships and inner-city precincts to rural areas and informal settlements. Mthimunye also heads up operations and innovation at The Connected Retail Group, the parent company of eButler and two other entities - Lospepes Ibizo Group and Mmogo Media of which he is CEO.

Since the age of 12, he has juggled multiple entrepreneurial ventures, from a publishing company that produced children’s short stories and poems, to a media company that produced scripts and treatments for television and theatre, in between his formal schooling and education. As such, Mthimunye’s diverse and successful entrepreneurial journey makes him the perfect person to guide other South African business leaders and entrepreneurs on how to be more innovative and agile.

Your very diverse entrepreneurial journey has taken you from publishing and from media all the way through to UX design and now to e-commerce? How's that journey influenced the success you're having today?

As you mentioned, I started my career in screen writing, and storytelling. And one of the principles in that space is you start with the ending of the story before you start writing everything else. And that's the same principle you can apply to a business.

Then there is also empathy, being able to put yourself in your character's shoes and explore exploring different scenarios that they might find themselves in. And that's actually the same thing that applies in UX when creating products for customers.

You start with the end goal. With understanding what does customer success look like? And then you build backwards from there.

Design with empathy, know who your customers are, and the challenges that they face on a day-to-day basis, and then determine how you can actually help them achieve their goals with your platform or service.

So, yes, I really think, my previous experience helped me in terms of l being able to design better user experiences and understanding our customers more.

Let’s talk about e-Butler itself. What was that end goal you had in mind at the genesis of this project?

A few years ago, I had a personal situation with the landlord, and I needed to get my groceries. And I feel like if there was a way someone could just deliver all my groceries, and I wouldn't have to go outside and have this uncomfortable interaction of unpaid rent.

But when I went online at the time, there were only a couple of major retailers with an online shopping offering and only delivered in something like in four to seven days.

So, that's really when I then started exploring if there's actually a business here. We started with a personal shopper service in 2016, where we would just shop for our customers from the different retailers that they would choose from our platform. We ran it as a personal shopper service for two years. During that time, we started acquiring some insights. From the customer side, we had a huge number of customers asking if we would go around the shops to find them the best deals in the market, something we were not doing at the time.

From the brand side, we also started seeing an increase in private label and retail brands in stores undercutting brand name products, so we saw a future where brands would need alternative routes to market.

So, we set out to disrupt ourselves from being a personal shopper service to building a direct to consumer platform for brands and have them reach communities directly while delivering affordable groceries at the same time. So basically, it was a killing two birds with one stone approach.

We’re interested to hear more about how you are now “bundling products” as a service for brands and customers like - essentially competing with retailers to offer brands a direct route to market. Can you tell us more about this side of your business?

We are trying to develop a direct to consumer platform. We saw one of the challenges for brands, especially in the FMCG space, is that unlike with fashion brands, it’s not really feasible for consumer grocery brands to set up their own store or distribution channels.

So we went to those brands with our proposal, to design or build a platform that connects those brands with their customers though us, and data we came also armed from our personal shopper service as an alternative to using retailers as middle men.

When it comes to the bundles, we pre-select convenient baskets of goods from our partner brands (each bundle might contain products from several complimentary partner brands) ready for customers to purchase. This makes shopping convenient for our end customers, and it also allows our partner brands to get in front of buyers.

How has your target market shifted since you started your business up until today?

So, our initial target market was affluent neighbourhoods - customers who were willing to pay our R89 service fee. We didn't really do any townships.

As the business evolved, we wanted to really try and capture a much bigger market.

So, we set out with the new model - to be the direct to consumer platform for brands - and we set out to penetrate the township market and deliver in townships and rural areas.

Today, for every two orders that go out of our fulfilment centre in the Midrand area, one is going to township and another is going to Waterfall Estate.

Obviously, South Africa is a very divided economy, and as you mentioned, your client base, is distributed across, both more and less affluent areas. What are the digital and technical challenges that you've had to overcome about with regards to giving these different target markets equal access to our services?

So, in the wealthy suburbs, we didn’t really have technical issues, we’ve kind of mastered that market first.

But in the township, it's been really quite interesting. We’ve learned that most of customers in the townships don't really buy standard data bundles - they'll buy social bundles. So, they have bundles for WhatsApp and for Facebook, but no data for going on Google or on a platform like ours to shop.

When we realised this, we launched two WhatsApp bots. One is a bot, an automated bot, where you can pay for all the bundles that we have.

The other bot is meow low-tech just allows our customers to send us their customised shopping lists.

In the townships, we're getting a lot of orders through our WhatsApp lines, because it's more efficient and more effective for them.

It's an operational challenge for us, obviously, because when the shopping lists come, sometimes they are not very specific - it might just say “I want rice”, so then we have to follow up, and ask what size or what brand or what price - or to make suggestions for the customer to approve.

This personal service has been popular in the townships.

There's also this interesting phenomenon, we're still trying to figure out, which is why people in the townships love their cash so much. We’ve had to overcome the payment challenge here because some of our customers want to pay cash, not online or with a credit card.

We’ve partnered with the credit card merchant service Yoko, in a pilot in Tembisa to encourage our customers to pay by card, which is getting popular, but then we found another challenge: when the driver would get to the house, often the owner of the credit card would not be there and had ended up leaving cash with whoever was at home to receive the order.

So we adapted to our customers’ needs again, we then partnered with Flash, who have over 170,000 merchants who sell at a time and electricity that through their devices and townships, and we integrated our payments with their system. Now all our cash customers, can just go to any Flash merchant and purchase an e-Butler voucher. Then, if they want to pay on delivery, they'll just give the pin to our driver to complete that payment, so we don’t have to handle the cash.

We’ve been very quick in terms of reacting to what our customers want and meeting them where they are so to speak.

How has lockdown and Covid-19 changed your business?

There’s really been two things - because obviously we have two clients, right? We have the customers, and then we have the brand side.

On the brand side, it's really been challenging. Business have been under pressure; they’ve had to reassign certain budgets or certain projects we’ve been working on - like a new promotion’s platform - have to be had to be pushed back.

On the consumer side, it's really increased our business and not only on the sales volume side, also from adoption. Online shopping adoption, especially in the townships, has really grown a lot.

And because we were already able to deliver to wherever those new township customers are, where other services are (still) unable to, and we're also offering them the lower prices on their groceries, we were really at the right place at the right time.

This interview was part of the Flux Trends Alinea Mini Masterclass Series dedicated to helping South African entrepreneurs and SMEs use trends as business insights to get back to work after the manifold challenges of 2020.