It’s been an extraordinarily difficult year for most South African retailers, with sales showing year-on-year declines for five consecutive months up to end-August, according to Stats SA.

Many of them are hoping for a bumper festive season to set them back on the path to recovery following the income lost during the more restrictive levels of the Covid-19 lockdown.

The challenge that many retailers face right now, is depleted cash reserves after they were forced to shut down or scale back operations during the Level 4 and 5 lockdowns, says Steven Heilbron, CEO of the Connect Group of companies. Some, especially liquor stores and shops that rely on tourists, have seen even bigger disruptions to normal trade.

“To take advantage of the festive season and back-to-school trade in January, most businesses need access to working capital,” he adds. “Without it, they cannot purchase inventory, take advantage of bulk buys at discounted rates, invest in new services, promotional displays or enhance their in-store shopping experience.”

The terms and conditions attached to financing from traditional lenders involve a lot of red tape and a business opportunity can often be lost by the time a loan is eventually approved – if it is even approved at all. There are, however, some innovative ways that retailers can improve their profitability and access cash flow or business financing. Heilbron suggests three of them:


Expand the product and service range

Many retailers are looking to boost profits by introducing new products and services. Selling products like prepaid airtime, data and electricity, or offering the facilities to pay bills, buy lottery and gaming top-up vouchers or do money transfers are popular ways that retailers earn additional income or commission from each transaction.


Instant access to your cash

For some retailers, the problem is not that they don’t have cash on hand, but that they cannot get to it because it’s in transit or still in their cash vault, waiting for a cash-in-transit collection.

The ideal automated cash management solutions not only provide robust cash vaults to ensure a safe trading environment, but also innovative cash flow options. For a modest fee, retailers will be able to instantly access their cash, while it is still in their vault. And, with the click of a button their cash can reflect in their bank account.


Alternative finance from fintechs

Financial technology solutions like Capital Connect are designed to address retailers’ pain points by allowing them to apply for credit straight from an app on their smartphone.

Heilbron says: “A recent survey from TransUnion found that 90% of small, micro and medium-sized businesses are struggling because of the pandemic and nearly half are not sure they’ll survive. This festive season will be make-or-break for many retailers. Innovative financing solutions can help them take advantage of this vital promotional period to boost sales and profits during December and into January.”