This startling statistic shows why Yuppiechef is opening stores in malls

Business Insider SA
The Yuppiechef store in the Gardens Centre, Cape Town.
  • Online veteran Yuppiechef surprised many with its new strategy to open stores in South African malls.
  • A recent presentation shed light on the reason behind this new approach.
  • It showed that Yuppiechef's online shop took almost two years to reach R1 million in sales - compared to a fraction of that time at one of its physical stores. 

Yuppiechef raised eyebrows when it recently started opening stores in South African malls.

After all, the 12-year old company is one of the few veteran survivors of online retail in South Africa.

But a recent presentation shed some light on its surprising new strategy.

At an event organised by entrepreneurial platform Heavy Chef, Yuppiechef co-founder Andrew Smith presented this slide, which compares the number of days it took to earn its first R1 million in online sales versus at its store in the V&A Waterfront:

Photo: Arthur Goldstuck.

The slide was shared by World Wide Worx managing director Arthur Goldstuck on Twitter

It took more than two years from August 2006 to get to R1 million of turnover online, Andrew Smit confirmed to Business Insider South Africa.

“When we opened the V&A store (in August this year), we got to the first R1 million in turnover in a fraction of the time.”

Read: We shopped at Yuppiechef’s new physical stores in SA malls – here's how their shops differ from other retailers

When you open an ecommerce store there is zero traffic (except your friends and family), and you have to slowly build traction over time, Smith said. Twelve years later, Yuppiechef had an established brand, a refined range of products and many customers - all contributing to the fact that it could reach R1 million much faster. Inflation also obviously played a part.

But it's undeniable that a key factor was the fact that the Waterfront has thousands of visitors walking past the shop every single day. 

“The point in showing this slide was not to comment on the relative profitability, growth or future prospects of online vs offline retail. It was merely to show that physical retail (at least in malls) has the huge advantage of guaranteed foot traffic from day one,” Smith said.

A new report by World Wide Worx, Visa and the digital marketing group Platinum Seed, shows that while online retail in South Africa should top R14bn this year, and grew by 25% in a year - it's still only 1.4% of total retail.

Smith believes many factors contributed to the continued dominance of physical stores, including that shopping in malls is a safe and established form of entertainment in South Africa. "We have one of the highest malls per capita rates in the world."

“(Also), we never had a catalogue shopping culture like other countries had, which helped their customers get comfortable buying things they hadn't seen.

“Our traditional retailers didn't embrace and invest in ecommerce until very recently, and so the whole industry is very underdeveloped."

Yuppiechef has opened three stores in Cape Town in recent months, and plans to open more.

Smith says customers like being able to buy last-minute gifts in the Yuppiechef stores.

"The tabletop category [dishes, cups and silverware] is popular because you can touch and feel and compare the products in person."

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