The gigantic Takealot operation awaiting your click
● On Black Friday, which kicks off at a minute after midnight on Friday November 29 for takealot.com, Takealot founder and CEO Kim Reid will be up all night sitting with the engineers, drinking coffee.
“Not that I can code. I’ll just be giving them a hard time,” he says.
It’s a critical time for SA’s largest online retailer, which brought Black Friday into this country in 2012. The shopping frenzy is one of the key ways the company attracts new shoppers, and though there have been some glitches along the way, it’s moving in the right direction.
During Black Friday last year the company attracted about 15,000 new customers with top-selling items being dog food, fragrances, nappies, TVs and a folding camping table.
The first year takealot.com ran Black Friday, in 2012, they generated R1m turnover. Last year Takealot’s Black Friday turnover was R196m and this year Reid projects an 80% increase to R352m.
It is preparing to ship at least one order every second this Black Friday, with about 10,000 boxes leaving its warehouses every hour. Rows of plastic tricycles sit in one area with rows and rows of toys, and there are kettles amid white goods and reams of Jamie Oliver’s new recipe book, Veg, in the book section.
Reid admits things have not always gone according to plan. This year, engineers will be around from 10pm through to 4am the next morning, and “I’m crossing fingers”.
“Every year we ensure that we upscale logistics, warehousing and engineering to handle the expected volumes,” he says. “Last year there were payment issues where in some instances people had paid, but this hadn’t been picked up by the credit card payment provider’s software. Fortunately our technicians were able to resolve the issues within 30 minutes and it remained fully operational for the duration of the sale.”
The company has put in place an automated sorting system that can distribute up to 14,000 parcels in an hour. Whereas it normally has 380 people manning the call centre, there will be about 750 people.
At its peak, Takealot expects between 70,000 and 100,000 users to be on the site at the same time.
It has introduced new systems businesswide to focus on managing bigger shopper volumes. The Johannesburg warehouse was 30,000m² but recently added 13,000m².
Warehouse storage in the group now stands at 75,000m². It houses more than 3.7-million items at any given time, and Takealot has opened 47 Takealot Pickup Points across the country.
“Internet consumers are particularly unforgiving,” says Reid. “If we didn’t have Black Friday we wouldn’t be able to scale to the extent we have,” he says. Many retailers bemoan having to take part in Black Friday, which erodes margins and redirects sales away from the more profitable festive season shopping period. But Reid says enjoying it and it being beneficial to the business “may be two different things”.
The huge warehouse in Kempton Park runs with precision, with forklifts and conveyor belts. In designated areas packers put together the familiar Takealot boxes. There’s not a speck of dust. Beeps in the background signal blockages in the system. The business constantly monitors metrics to manage the cost per parcel. At one end of the dispatch system are large trucks to collect boxes. Times are organised beforehand to allow the process to run smoothly. No unauthorised entry is allowed.
“Security costs are exorbitant and health and safety are necessary to a point,” says Reid. “It’s not a dangerous environment, it’s not a factory.”
To Reid, being consistent and reliable are critical. That means delivering when you say you will — not before, not after.
The company is working on improving systems, and is testing rescheduling to allow for more customer flexibility.
Among the group’s other brands is apparel retailer Superbalist.com. Black Friday sales at Superbalist last year were R40m, and Reid expects a 50% increase this year.
On a monthly basis, the Takealot group carries more than 1.6-million deliveries and this number is expected to increase to more than 2-million over the peak shopping season.
Absa estimates that two out of three South Africans took part in Black Friday sales last year. FNB expects a 15% increase in transactions over the sales period this year.
Takealot expects it will travel more than 4-million kilometres from Black Friday until December 24. “To put that in context, it is the equivalent of circumnavigating the globe over 100 times,” says Reid.