A fresh start for South African retail in 2021
After a difficult year that saw year-on-year sales fall every month between the start of the hard lockdown and September, South Africa’s retail sector is hoping for a fresh start in 2021.
BY STEVEN HEILBRON
Retail merchants that start the year with access to financing and ready to pursue new opportunities, will be best positioned whatever the new year and lockdown restrictions may have in store.
Few retail merchants emerged unscathed from the Level 4 and 5 lockdowns in March 2020, commented Steven Heilbron, CEO of the Connect Group of Companies. With vaccines on the horizon, 2021 will hopefully be a better year for South Africans in general and specifically the retail sector. To take advantage of business growth opportunities, however, retailers will need to be agile, look at their operations and finances with fresh eyes, and innovate to outsmart their competition.
Heilbron suggests five ways retailers can start 2021 on the right note:
Look for growth opportunities
The hard lockdown has reshaped consumer behaviours and expectations, creating new market niches for merchants to exploit. This is a good time to relook one’s business model and plans, adapt and innovate. For example, if a business owner does not yet offer online ordering and delivery, this could be a good time to dip one’s toes into the water. Adding a coffee shop, bakery or other in-store entertainment or education could enhance the shopping experience and open up alternative streams of revenue.
Improve cash flow management
During a difficult economic time, disciplined cash flow management takes on even more importance.
New age and reputable accounting software can help retailers run accurate and predictive forecasts, so that they understand the flow of money and inventory into and out of the business. With the Connect Group offering, one has access to an automated cash management solution from Cash Connect, enabling the retailer to automate the flow of cash from their retail store to their bank account, they get access to working capital from Capital Connect in just 24 hours based on the card or cash volumes that they deposit in their cash vault – all which enables them to speedily capitalise on business opportunities.
Identify cost optimisations
The beginning of a year is the ideal time to analyse one’s expenses base from a zero-cost perspective. Retailers might find cost savings by approaching their stock purchases differently or negotiating with service providers to receive discounts on bulk or cash purchases. Other tactics might be to look for cheaper suppliers, optimising cash handling costs, and evaluating the costs of subscriptions such as telecoms and insurance.
Automate where possible
Automation is a great way to reduce costs by eliminating the need for manual labour. Instead of manually capturing data and filling in forms, staff can focus on adding value for the shopper. Automating cash management, for example, eliminates errors, reduces the cash risk, increases business efficiency and eliminates shrinkage. Cashiers and back-office staff don’t need to waste time counting money, preparing bank deposits or standing in bank queues.
Quick access to business finance
Whether the plans are to expand by adding a new product line, invest in promotions or store renovations, stock-up, buy equipment or enhance the in-store shopping experience, retailers will need fast and reliable access to working capital. A financial technology solution like Capital Connect allows them to apply for up to R2,5 million trading capital straight from an app on one’s smartphone. A short term, unsecured loan can reflect in one’s bank account in under 24 hours. Small businesses are the lifeblood of the economy, and to thrive, they need access to working capital.
The future dictates fast, reliable access to business finance – no red tape or long-winded finance approvals that often take so long that opportunities are lost by the time the loan is granted.