South African retail has undergone profound transformation over the past few years, with digital platforms and ecommerce reshaping consumer expectations. However, we are only in the early phases of digital transformation, and SME retailers will need to be agile to keep up with emerging customer demands and new competitors. This is according to CEO for Capital Connect, Steven Heilbron.
CEO for Capital Connect-a fintech that offers fast and flexible business funding to South African retailers , Steven Heilbron, 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 arrival of international ecommerce giants such as Amazon, Temu, and Shein into the local market is anticipated to spur rapid growth in the upcoming years. SME retailers may need to concentrate on enhancing their in-store experience, utilizing community connections, and investing in their own digital commerce offerings to stay relevant.
Everything on-demand
Last-mile delivery services have established consumers’ expectations for swift fulfillment of fast-food and grocery orders. Now, logistics providers and ecommerce companies are collaborating to deliver nearly any product on demand. Takealot provides an on-demand, 60-minute delivery service in selected Cape Town suburbs.
Meanwhile, Shoprite Group’s Checkers Sixty60 now offers same-day delivery of small appliances, homeware, consumer electronics, and other goods. The service is presently undergoing a pilot phase in Cape Town. SME retailers will need to partner with local delivery services to provide faster delivery options to stay competitive.
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 increasingly adopting automated cash handling solutions to streamline processes, minimize errors, reduce risk, and enhance security.
These solutions often incorporate cash vaults, ATM recyclers, and integrated Point of Sale- POS systems that automate tasks like counting, sorting, and depositing cash. Automated cash handling systems can yield savings of up to 40% in time and money. Enhanced automation can result in lower costs and improved business efficiencies.
Fintech offerings empower SMEs
Fintech leaders are collaborating closely with retailers to tackle pain points in areas such as business financing and payment acceptance. For instance, they provide solutions that allow retailers to handle both cash and cashless payments within one ecosystem, supporting customer preferences. Additionally, they offer easier access to lightning-fast working capital for retailers through an app, ensuring they never miss out on retail growth opportunities.
Embracing the omnichannel reality
Today, customers anticipate a seamless experience across online and offline channels, including consistent pricing, product availability, and customer service. Retailers equipped with an omnichannel presence can boost sales by engaging customers through various touchpoints, such as physical stores, ecommerce platforms, social media, and mobile apps.
Providing options like click-and-collect and home delivery, alongside their brick-and-mortar store, is essential. To thrive in an omnichannel environment, retailers will require an efficient logistics infrastructure. This may entail collaborating with a courier service provider or a platform like Mr.D Food or Uber Eats or investing in their own delivery vans or website.
Thriving in disruption
“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.” says Heilbron
“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.” concludes Heilbron,
Republished with permission from IT News Africa