A new breed of agile fintech companies has emerged to respond to South African retailers’ need for quick access to finance.
These finance providers offer retailers access to “opportunity capital” so they can respond quickly to new business trends.
So says Steven Heilbron, CEO of Capital Connect, a fintech that offers fast and flexible corporate financing. He says that in an environment of constrained consumer spending, disrupted supply chains and rising inflation, small to medium-sized retailers need to be flexible and need access to finance to respond to new opportunities.
They can no longer afford to wait weeks for a business loan approval and need the funds in their bank account as soon as possible to take advantage of opportunities like a time-sensitive bulk purchase.
Says Heilbron, “In the face of increasing competition, economic volatility, and ever-changing consumer needs and preferences, retailers know they must be agile and innovative to thrive. Innovative fintechs can support them because they use digital technology to offer easy, fast and hassle-free loans to qualified retailers.”
Heilbron provides six examples of how retailers can use fintech financing to thrive and thrive in a challenging environment:
- Industrial hot air fryers: According to some estimates, consumers have already bought more than 24,000 air fryers during the Black Friday 2022 promotional period. As cooking oil and energy prices soar, hospitality and fast-food companies are following suit. Industrial hot air fryers are more oil efficient than deep fryers. They also enable retailers to save on electricity costs and offer their customers a healthier food alternative.
- Container shops: Shipping containers are already popular for spaza and tuck stores. But they’re a convenient way for any retail store to kickstart a seasonal or pop-up store for events or holiday sales.
- Meal replacement at home: Many retailers are turning home meal replacements into a booming business. These offerings save consumers time with fully or partially prepared meals that are varied, nutritious and affordable. The demand for vegan options is growing.
- Perishable refrigerator doors: Experts expect electricity prices in South Africa to double in the next five years. Adding doors to open-top refrigerators for perishables is a great way to save up to 40% on electricity bills.
- Fast and premium deliveries: According to a study by Wunderman, 25% of South African consumers want their delivery to arrive in less than two hours. A scooter or delivery vehicle can enable a retailer to meet this expectation. We’re also seeing more competition in premium areas like wine delivery. Retailers without an online ordering system or delivery service simply lose out.
- Vending machines: Adding a vending machine for hot drinks or medical supplies (basic pharmacy items) to a gas station forecourt is a hassle-free way to create a new revenue stream.
“From improving the in-store shopping experience to creating revenue streams like e-commerce, there’s no shortage of great ways to grow a retail business,” says Heilbron. “However, retailers need affordable and convenient financing to take advantage of these opportunities. With Capital Connect, retailers can apply for a loan of up to R5 million through our app and the money will be credited to their bank account in 24 hours or less.”