We’re just about past the halfway mark for 2022, leaving only 176 days for retailers to prepare for the next peak trading season that includes the busy shopping time over Black Friday and the festive season.
With the South African retail market estimated to be worth R1 trillion a year, there is plenty of pie for the retail merchants who are agile, fast, bold and innovative enough to create opportunities that can boost profit margins.
Yet that doesn’t mean that it will be easy to win in the second half of the year, even with a welcome end to most remaining COVID restrictions, says Steven Heilbron, CEO of Capital Connect, part of the Connect Group.
Competition is fierce, rising prices and load shedding make for difficult operating conditions, and consumer confidence and discretionary income are under enormous strain.
“Retailers can prosper in these uncertain times and grow their market share, but only if they are innovative and proactive,” says Heilbron. “They need to keep up with rapidly changing consumer needs and tastes by adjusting their product range and channel mix as needed. They also need to be creative about how they diversify revenue streams.”
Awarded the title as SA’s Retail Business Funder of the Year for 2021°, Capital Connect shares five ways retailers can innovate and try to get a bigger piece of the R1 trillion retail pie:
- Be where the customer is: Flexibility is the watchword beyond the pandemic, with customers following a complex purchase journey. They may research online and buy in store. Or they could go to a shop to see and touch a product, before ordering from the cheapest shop on the Internet. Retailers must be at all the touchpoints where consumers browse, transact, acquire and consume. Flexible purchase and fulfilment options are key—from a range of delivery choices to buy online-pickup instore, curb-side pickup and in-store shopping.
- Get ready for a winner takes it all: Despite the surge in online shopping during COVID-19, indications are that South Africans are heading back to the malls in a big way. Yet things are not going to go completely back to normal. When customers shop, they are now shopping at fewer retailers but spending more per trip. Retailers should position themselves as the destination of choice, or risk losing out.
- Freshen up advertising and marketing: Advertising and marketing in South Africa has become stale and boring. Too many retailers still depend on generic deals and lookalike flyers to promote themselves. Those that create a wow factor with bolder offers and more interesting marketing will stand out. Retailers can experiment with social media activations and ads at low risk and cost.
- Keep improving your product and service offering: Compared to the pace of change and innovation in sophisticated retail markets like the UK, South African retailers are conservative. They tend to stick to the same products and services, seldom adding anything new to their offering. The deli section in one supermarket is much like that of another. Now is the time to find ways to diversify revenue streams by adding new offerings and to trim costs by cutting unprofitable products and services.
- Adopt a genuinely customer-centric mindset: Brand loyalty is a relic of the past. Customers are more informed than ever about pricing and offerings across different merchants and will gravitate towards the retailers that offer them the best value. Retailers should master the science and art of understanding what the customer wants. Those that focus on data-driven insights, fast delivery and high quality will be able to get an edge.
Heilbron says: “Most of these strategies will require retailers to invest in opportunities for growth. Opportunity capital from reputable fintech companies can help them to unlock their full potential so they can outsmart their competitors.
Innovative fintech lenders, like Capital Connect, offer quick access to growth capital with flexible and attractive terms. Retailers can access short term, unsecured capital of up to R5 million* in 24 hours to ensure that they capitalise on retail opportunities as and when it presents itself. They simply log into an app to Click & Borrow and the funds will appear in their bank account by the next day, or the same day.”
°Fintech Awards 2021 South Africa (Wealth & Finance, AI Global Media Ltd)