How your business can weather the recession
It was announced recently that South Africa is no longer in the technical recession that resulted from two consecutive quarters of negative growth. While welcomed news, it does not change the fact that consumers remain under pressure in the face of ever-increasing living costs, growing debt levels and significant political uncertainty.
All forecasts are that this constrained operating environment will continue. Unfortunately, no one-size-fits-all solution exists that will enable businesses to weather the storm unharmed. The good news however, is that there are ways that businesses in the wholesale and retail space can work to mitigate their losses and identify gaps that serve as growth opportunities.
Some key tips for wholesalers and retailers are:
Differentiate your business through top-notch customer service and make your customers feel valued
Customer service lies at the heart of the retail industry, so being able to meet consumer wants and needs is non-negotiable. Clever retailers use the data they have available through social media channels to provide customers with a personalised experience.
Manage your margins correctly
Ensure there is an adequate supply of high-demand products and make sure there is not an excess of products that are harder to move. Finding the perfect balance requires monitoring and understanding customer buying patterns, replenishing stock at the right time and keeping abreast of product trends.
Look after your staff
Staffing is one of the most important components of doing business. By recognising and rewarding your staff members’ hard work, you can ensure your staff is energised to help achieve your business objectives. In an industry where staff often have to work longer hours – and especially in peak periods such as the festive season – it is important to show them that you appreciate their commitment and efforts.
Ensure you have an efficient omni-channel offering
An up-to-date and user-friendly eCommerce offering is a necessity for retailers hoping to stay competitive in an always-on world of digital convergence. A recent study by Ipsos found that the number of South African online shoppers is expected to triple in the next few years, indicating the need for a strong digital offering. However, it is key that customers’ needs are met at every touch point – from mobile and desktop to the bricks and mortar store. To do so, business owners and management need to understand how customers shop and build an omni-channel offering that caters to these patterns.
Consider what promotions are on offer
The age of the savvy consumer is upon us. Promotions are a necessary tool to drive feet into stores (and increase online sales). Retailers cannot simply place products on promotion without thinking of the impact it will have on their margins. Black Friday last year is an example of how promotions did not yield the intended result. Because the phenomenon is fairly new to the South African market, many retailers did not price their products correctly and therefore made a loss. As a retailer, you will need to make an informed decision on what margins you are willing to sacrifice on promotions.
Do not underestimate the importance of your brand
Retail’s busiest season has just started. Between September and December often businesses experience three times as many sales between as there are over the course of the rest of the year. You need to go the extra mile to attract customers – and building a brand or corporate identity through imagery, promotions and service are often successful ways retailers can achieve this.
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