Case Study: How Cellucity Cut Delivery Cost To Customers In Outlying Areas

 

Overview

  As South Africa’s first mobile retail company, Cellucity maintains a strong presence in the country’s communication industry with 36 branches located in and around the cities of Cape Town, Gqeberha, Durban and Johannesburg. Since 1994, Cellucity has been at the forefront of technology, innovation and customer experience. So, when presented with the challenge of reaching their customers living in outlying areas, the company partnered with Pargo in 2020 to offer all their customers the convenience of online shopping wherever they are through the power of Click and Collect. By integrating with Pargo, Cellucity has been able to cut delivery costs to outlying areas through the logistics company’s nationwide pickup point network, which services over 87% of the country’s postal codes. Today, 20% of all Cellucity customers pick Pargo Click and Collect as their preferred delivery method at checkout.  

The Problem

  The demand for smartphones is accelerating exponentially. As of 2021, over 62% of all South Africans use their mobile devices to access the internet as it is generally more convenient and affordable than desktop alternatives, which is why businesses like Cellucity are so essential to getting South Africa online. However, there is a massive hurdle standing in the way of even greater mobile penetration – distribution. More than 50% of South Africans live in areas that are typically difficult to deliver to due to poor infrastructure, safety concerns and great distances. Traditional delivery methods like door delivery in these areas are either exorbitantly expensive or near impossible and having a physical presence through a brick and mortar store in each and every corner of the country is also unrealistic. For this reason, Cellucity partnered with Pargo in 2020. Lesa Jackson, Ecommerce Sales Manager at Cellucity, explains “Though Cellucity has many brick and mortar stores, the majority are found in large cities. Historically it’s been challenging to get our products in the hands of customers who live in outlying areas where we have no physical presence because traditional courier methods create a number of roadblocks to good service delivery when trying to assist those clients.”  

The Solution

  Pargo’s nationwide network of over 3,000 pickup points! These Click and Collect delivery hubs are located across the country in popular franchises such as Clicks, FreshStop at Caltex and SPAR, as well as independent mom-and-pop type stores. They allow retailers to deliver their products safely to the most remote areas in South Africa and urban centres at a lower cost through consolidated deliveries. By partnering with Pargo, Cellucity can now easily reach those customers they previously had difficulty delivering to. Customers simply pick Pargo delivery at checkout, choose their preferred Pargo Pickup Point, and collect their order when they are ready. “Our partnership with Pargo has given us access to an alternative fulfilment solution through their broad pickup point network to reach clients in outlying areas as well as clients who do not want to wait on door delivery“, continues Jackson.  

The Results

  Now, 1 in 5 of all Cellucity customers choose Pargo Click and Collect delivery at checkout, proving how popular this alternative delivery method has become. One of the biggest reasons for this uptick in Click and Collect orders is that it is up to 50% more cost-effective for customers living in outlying areas. Commenting on the acceptance of Click and Collect among Cellucity customers, Jackson says “Once our first Click and Collect orders came in, we quickly realised that it’s a delivery option that many of our customers were looking for. The highlight of our partnership with Pargo is the ability to reach customers who we may not have been able to assist in the past.” Data from Pargo also reveals that there has been a 35% year on year increase in Cellucity Click and Collect orders, which further evidences the need and popularity of this alternative delivery method in the South African consumer landscape.