With the International Monetary Fund forecasting that South African GDP will grow only 1% this year against a backdrop of load shedding and logistics disruptions, retailers will need to focus on diversification into new sectors as well as expanding market share at the expense of their competitors, if they are to grow and thrive.  

That’s according to Steven Heilbron, CEO of Capital Connect, a fintech that offers fast and flexible business funding to South African retailers. He says that weak consumer confidence, a flat economy and uncertainty ahead of the national elections are all headwinds for the retail sector. 

Heilbron says that he has noted that successful retail businesses implement the following tactics and strategies to grow under all market conditions:

Focus on growth markets: Retailers should look at ways to move into markets that are showing more growth, whether that’s by acquiring or partnering with a complementary business or adding new product lines to their offering. 

Segment the customer base and hit each segment with the right value proposition: A winning strategy is to market different propositions to different segments to gain share and cover the market. For example, retailers can target great deals on essential goods at mass market customers, and one-hour delivery or premium products at higher LSMs. 

Improve inventory management: Optimising inventory levels and reducing excess stock can free up capital and improve cash flow. Retailers can use data analytics and demand forecasting tools to better align inventory levels with customer demand and minimise carrying costs. 

Focus on customer retention: Retailers can invest in loyalty programs, personalised marketing, and exceptional customer service to keep customers coming back.

Make strategic bulk buys:  A well-timed bulk buy can enable a retailer to purchase inventory at a lower cost than usual, to sell it for a higher profit margin. In addition, a retailer could buy products at a discounted rate to offer deals that entice more customers through the door.

Find new points of presence: Retailers can grow by finding new points of presence, such as containerised coffee shops, pop-up stalls at events, or ecommerce websites. 

Consider high-margin convenience offerings: Retailers can grow revenues by offering grab-and-go meals or coffee to busy consumers. Using some floor space in this way attract customers and add a new revenue stream. 

Heilbron says: “During tough economic times, retailers must seize opportunities as they arise. Fintech providers are making it easier for retailers to access opportunity capital they need to grow and thrive. With Capital Connect, you can apply for opportunity capital of up to R5 million from our app and the funds will be in your bank account within 24 hours, or less.”

*LIMITED OFFER:

ONE-MONTH PAYMENT HOLIDAY. Retailers that take R1 million business funding with Capital Connect have the option of skipping 30 daily payments. Valid until 31 May 2024. T&Cs apply. Visit www.connected.co.za/offer

Songezo Nayo // Engen Eastlakes

“Timing is crucial in retail. For long-term needs, consider the bank. When you need quick capital and there’s an opportunity on the table, Capital Connect is the partner you need.”

VIEW Video // https://connected.co.za/testimonial-videos/client-testimonials/1305-testimonial-songezo-nayo-engen-eastakes-cape-town.html