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EXPLORING THE FUTURE OF RURAL AND TOWNSHIP RETAIL LANDSCAPE IN SOUTH AFRICA

EXPLORING THE FUTURE OF RURAL AND TOWNSHIP RETAIL LANDSCAPE IN SOUTH AFRICA

Surveys conducted by Brand South Africa on challenges of start-ups revealed in 2018 that the top five challenges of entrepreneurs in South Africa were considered to be: • Ability to find clients or customers (47% of participants); • Inability to raise funds (43% of survey participants); • Lack of guidance (31% of survey participants) • Wearing too many hats (30% of survey participants); • Slow or lost sales (21% of survey participants). The survey participants were entrepreneurs that founded start-up companies themselves. There are many answers that entrepreneurs will give you as the challenges in the entrepreneurship journey and more so in the start-up journey in South Africa. It is particularly interesting though to note that 68% of the participants agreed that ability to find customers and slow or lost sales are major challenges.

Sales are after all the lifeblood of a business. Perhaps it is important to analyse the positioning of start-up companies in getting to clients and in generating sales – particularly in an economy like ours which has high failure rate for start-ups. How can Eastern Cape rural and township entrepreneurs position themselves in getting access to markets? In the era of the Generation Z, what does this mean to the rural and township entrepreneur who might be working on a shoestring budget?

The Rise of Generation Z

With over 60% of the population of South Africa having access to smart phones and therefore internet access in the country, the past couple of years have naturally seen a huge surge in e-commerce transactions. This includes businesses that sell to business (B2B) or to consumers (B2C). (This statistic excludes businesses that sell to governments. Governments procure via the legislated system).

Another factor that caused the enormous growth in e-commerce transactions is interestingly due to emergence of millennials. The fact is majority of buyers now are Generation Y (born between 1977 – 1994) and Z (born between 1995 to 2012). With Generation Z quickly rushing to take top spot in being the biggest percentage of buyers in the country and world, how well prepared are start-ups for the new trends that will be brought by Generation Z? Do start-ups in the Eastern Cape know and anticipate these changes in purchasing?

Demographics of internet users

The truth is 88% of South African internet users are made of people 16 to 45 years. These people access internet via their smart phones in most instances. This is an excellent opportunity to operate a business without borders. E-commerce has enabled that. The threat arising from this is that there is more competition than ever before. Almost anything that would be available on the streets is now available online.

To grow their businesses in the age of e-commerce, entrepreneurs in the Eastern Cape should look at doing the following:

  1. Optimise Searches

Businesses enhanced their online visibility via website construction and optimising online searches.

We all know that businesses in 2019 should have online presence to maximise sales. After a company has gained online presence by having a website and social media pages on successful social media platforms such as Facebook, Instagram and Twitter; Search Engine Optimisation would be the various strategies to increase amount of visitors to a particular website. Applying these strategies would ensure that the company is able to gain priority when anyone searches keywords that relate to the service on various search engines such as Google. It is not enough to search “Hair Salons East London” but to ensure you oust your competitors you need to be one of the first salons to appear within the first page of the search. This is what an SEO would ensure for your business.

  1. Use Social Media to Enhance Engagement with Current and Prospective Customers

Customer Engagement is very important in generating sales. Customers buy from businesses they emotionally connect to. In the world of chicken retailers, Nandos is best known by millennials for responding rather swiftly to current affairs in a humorous manner. This has been getting the company closer to the heart of its consumers over the long term. South Africans are known for having a grand sense of humour and Nando’s translated this into business. How is your business connecting to its clients’ emotions? How is your business using engagement marketing to become a part of the community? Get your business a social license to operate by engaging on important issues affecting the community.

  1. Create Innovative Ventures

Technology has bred many new ventures. One such venture is PICK’D PRODUCE.  This venture founded by North West farmers resulted in the need to find new markets. These farmers developed a mobile application that allows customers to buy hand-picked fruit and vegetables from their cell phone straight to their door. This works in pretty much as mobile application Uber that brings a taxi to your door with time being the only difference. While Uber can deliver a taxi to your door in under three minutes, these farmers require a day to secure the produce at the right quality. This app has meant a need to form collaborations with all farmers in the region so that the application is able to meet all needs of clients that might arise. Collaborations might be needed in ensuring that you are able to provide your clients with an all-encompassing solution to meet their needs.

  1. Give Millennials Experience

Millennial's appreciate experiences over owning things. Big businesses know this. Banks know this. That is the reason the big four banks in the country have cut down home loans as a major growth area in the past decade and the focus is more on giving millennial car financing and any other financing that will give millennials experience. Does your business know this?

Farmers Markets are one of the popular events that farmers use to sell their produce in addition to traditional methods of distribution. These markets require collaborations between various entrepreneurs and they create ecosystems as they need cooks, photographers, musicians etc. Done weekly they provide excellent tourism to their host site.

In Mdantsane Man’s Pub and Braai does this very well by giving its clients a relaxation place on Sundays. Imagine if Farmers did this to sell their produce?

  1. Get Your Pricing Right!

A huge problem of rural and township entrepreneurs is pricing. These businesses do not price correctly. Businesses either price themselves out or they price themselves too low. The impact of this is dreadful on the business. Priced too high, the business kicks itself out of the competition. Priced too low, the business gains a lot of customers but is not making any profits of its sales. The entrepreneur can often finance certain parts of the production process from his/her own pocket. After financing majority of the sales, the entrepreneur eventually loses as this becomes an unsustainable way to run a business.

Adequate pricing is fair and may or may not match what your competitors are doing. Get professionals to confirm if the pricing for your products is appropriate. Consult your clients with regards to whatever adjustments you make to your pricing. Consultation brings you buy in whether prices go up or down. Do not forget to factor in costs such as delivery or risks of not getting your money back particularly for credit sales in your pricing.

As a modern day entrepreneur one needs to keep abreast with current trends while always keeping an eye on the future in order to gain a competitive advantage. With the advent of the internet, the rise of social media and power of technology, entrepreneurs would be stuck in the dark ages if they do not use these mediums to their advantage of which they have become easily accessible and some even free. These are just five of the ways in which you can increase your ability to find clients and boost your sales by gaining access to a much larger market.

To a new modern wave in rural and township entrepreneurship in the Eastern Cape!

Written By: Thembi Tabata

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