Consumers are counting the costs of a record streak of Eskom load shedding, with daily outages taking an enormous toll on their finances, mental wellbeing and lifestyles. Until new generation capacity comes online, retailers can play an invaluable role in helping their customers to navigate the power crisis.
That’s according to Steven Heilbron, CEO of Capital Connect, a fintech that offers fast and flexible business funding to South African retailers. He says that load shedding is taking an enormous toll on communities through the negative impact it has on jobs, stress levels, cost of living, and people’s ability to pursue their usual learning, work and leisure activities.
Research conducted in 2022 paints a frightening picture of how load shedding has affected South African households. Some 60% of respondents reported that at least one of their home appliances was damaged or destroyed due to power surges. Half had lost the contents of their fridge at least once. One in ten experienced a home invasion while their alarms were inactive as a result of load shedding.
Consumers have also needed to invest in backup and alternative power sources to compensate for the unreliability of the grid. More than half have bought a gas stove to ensure that basic cooking can still occur, while 17% have purchased a generator, 16% have invested in solar power, and 14% have bought an inverter.
Inflation rises across the board
Says Heilbron: “In addition to these direct costs, load shedding is stoking inflation across the board. Major retail chains have disclosed that they’re spending hundreds of millions of rand a year on diesel to keep their stores open during load shedding. Farmers face higher expenses and there’s also the cost of cold chain produce that needs to be thrown away when refrigeration fails due to load shedding.
“Against this backdrop, retailers have an invaluable role to play in helping their customers to mitigate the impact of load shedding. Those that work with their communities to navigate the crisis will not only be making a social investment, they will also be creating a foundation for a sustainable business that can thrive even with load shedding likely to continue for years to come.”
Heilbron says there are many ways that retailers can help their communities and customers to manage the impact of load shedding as well as create a more sustainable business:
Create safe havens for customers: Most retailers have invested in some form of backup power by the now. Coffee shops, fuel stations and other retailers can consider installing workstations and mobile phone charging docks, so customers have somewhere to work, learn and recharge when there’s no power at home.
Introduce a dedicated aisle or section to help customers beat load shedding: Retailers could create a special, one-stop section in their store where customers can get advice and products to prepare for power outages and mitigate their impact. They can offer products such as rechargeable batteries, portable solar chargers, battery-powered lights, and gas stoves. Another idea might be to offer pre-packaged survival kits that include essential items such as candles, matches, batteries, and non-perishable food items. Retailers cold also offer load shedding tips in brochures, on display boards, or in occasional expert talks.
Move to solar: Many retailers are heavily dependent on generators to stay open in blackouts. But solar panels are a cleaner and more environmentally conscious alternative that also offers low operating costs. They enable a store to save money by reducing its use of municipal or Eskom power.
Specials to help customers save: Discounts on staples can be a great way to increase footfall and help customers to manage rising costs for food and other household basics.
Consider just-in-time deliveries and catering options: Load shedding makes it difficult for households to plan meals. Many consumers are worried about food getting spoiled in their freezers during long power outages. Others don’t have gas stoves for cooking. Delivering fresh food or cooked meals just-in-time can be a lifesaver for these customers.
Heilbron says: “Load shedding is a crisis, but one that creates opportunities for retailers to build closer community and customer relationships. However, retailers need affordable and convenient finance to open these opportunities. With Capital Connect, retailers can apply for a loan of up to R5 million from our app and the funds will be in their bank account within 24 hours or less.”