How to prepare for the ecommerce boom

Steven Heilbron, CEO of Capital Connect, a fintech that offers fast and flexible business funding to South African retailers, outlines five trends that are shifting the retail landscape: 

Ecommerce giants enter the market

Ecommerce continues to reshape retail in South Africa, with a study from World Wide Worx showing that online retail sales grew 29% to R71 billion in 2023. The sector is expected to break the R100 billion mark by 2026. The study notes especially strong growth for grocery delivery services. 

The entrance of international ecommerce giants like Amazon, Temu and Shein into the local market is expected to drive rapid growth in the years to come. SME retailers may need to focus on sharpening their in-store experience, leveraging community connections and investing in their own digital commerce offerings to remain relevant. 

Everything on-demand

Last-mile delivery services have set consumer’s expectations for rapid fulfillment of fast-food and grocery orders. Now, we’re seeing logistics providers and ecommerce companies work together to ship nearly any product on-demand. Takealot offers an on-demand, 60-minute delivery service in selected Cape Town suburbs. 

Shoprite Group’s Checkers Sixty60, meanwhile, now offers same-day delivery of small appliances, homeware, consumer electronics and other goods. The service is currently being piloted in Cape Town. SME retailers will need to collaborate with local delivery services to offer faster delivery options to compete.

Elevating automation 

Cloud-based platforms and connected devices like RFID tags and smart shelves enable retailers to automate areas such as inventory management and customer service.

Retailers and merchants are also embracing automated cash handling solutions to streamline processes, reduce errors, reduce risk and enhance security. 

These solutions often include cash vaults, ATM recyclers, and integrated Point of Sales (POS) systems that automate tasks such as counting, sorting, and depositing cash. Automated cash handling systems can deliver a saving of up to 40% in time and money. Improved automation can lead to low costs and increased business efficiencies.

Fintech offerings empower SMEs

Fintech leaders are working closely with retailers to address pain points in areas such as business financing and payment acceptance. For example, they offer solutions that enable retailers to manage cash and cashless payments in one ecosystem to support customer choice, as well as offer easier access to lightning-fast opportunity capital to retailers via an app, so they never miss out on retail growth opportunities.

Embracing the omnichannel reality 

Customers today expect a seamless experience across online and offline channels, including consistent pricing, product availability, and customer service. Retailers with an omnichannel presence can drive sales by reaching customers through touchpoints, such as physical stores, e-commerce platforms, social media and mobile apps.

Offering clients options such as click-and-collect and home delivery, in addition to their brick-and-mortar store, is a must. To succeed in an omnichannel world, retailers will need an efficient logistics engine. This might mean partnering with a courier service provider or with a platform like MrDFood or Uber Eats or investing in their own van or website. 

Thriving in disruption 

Says Heilbron: “Ongoing technological disruption creates a range of threats and opportunities for retailers. They have many viable possible responses, from doubling down on their in-store experience via shoppertainment and promotions, to investing in digital platforms and delivery capabilities.”

“Whichever route they follow, they need access to fast, frictionless opportunity capital to execute their growth strategies. With Capital Connect, retailers can apply for an unsecured short-term loan up to R5 million from our app and the funds will be in their bank account within 24 hours, so that they can capitalise on retail opportunities to outsmart the competition and boost profits.”