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South Africans are not the only ones gearing up for Black Friday – retailers are equally upping their game to cash in on the pre-festive season fever.
While 2023 proved to be economically challenging for businesses and households alike, retailers are planning to make up for financial losses incurred throughout the year.
Estimates indicate that R60.4 billion will be spent in retail over the November and December period.
Seemingly, businesses are not resting on their laurels as they’re swiftly adopting new diversification strategies to get their share of the projected millions.
A survey conducted by the Bureau of Market Research (BMR) and commissioned by Capital Connect, of 150 leading retail business owners revealed that 87% of these are pursuing innovative ways to increase revenues and profits.
“Innovative thinking, diversification and the ability to respond fast to volatile market conditions are all essential for survival and growth,” said Capital Connect CEO, Steven Heilbron.
Introducing new product offerings
Capital Connect’s survey indicates that 55% of retailers are adding new product ranges, while 35% have branched out to provide new services.
“We especially see this in sectors where sales slowed down, such as pharmaceutical and beauty stores as well as specialist food and beverage merchants,” said Heilbronn.
“Retailers in these sectors are adding groceries and essentials to their product line to capture more of the consumer’s non-discretionary spending,” he added.
As a result, they’ve been implementing doorbuster deals on stables such as cooking oil, milk, sugar and toilet paper to cash in.
In attempts to broaden their revenue streams, 35% of retailers confirmed they were acquiring more business.
“This is a powerful means for retailers to diversify and grow revenue lines – for example, a general dealer buying a liquor franchise or a coffee shop – and move into new locations,” Heilbron said.
Enhanced shopping experience
For most customers who still opt to travel to the store over purchasing online, shopping remains an experience, extending beyond simply swiping their bank cards.
Retailers are seemingly aware of the need to make shopping as entertaining as possible to drive up foot traffic.
Capital Connect’s survey indicates that 8% of retailers are introducing “shopper-tainment” for better in-store customer experiences.
“Black Friday has a strong association with online shopping. But traditional retailers with brick-and-mortar stores still make up the majority of Black Friday sales revenue,” Heilbron said.
“They can win business by turning the shopping event into a shopper-tainment occasion,” he added.
Among other activities, Heilbron suggested holding product demos or workshops ran by influences or experts, and well as offering live in-store performances to draw customer traffic.
‘Retailers are also battling’
“It’s not just consumers who are struggling in the current economy. Retailers are also battling to stay profitable,” said Heilbron.
Hence, many retailers are not expanding their product and service offerings with affordable pricing to maintaining revenue flows.
“With consumer spending and confidence at low levels, retailers need to be adaptable and outsmart the competition,” Heilbron concluded.