Solve cash flow issues in traditional retail

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Andrew Dawson, CEO of MACmobile.

Traditional retail across Africa is being heavily stimulated by a cash economy and pickup truck sales, which involves a significant amount of risk. Cash flow issues can also limit trading opportunities, as retailers in this market may not be able to buy the stocks they need when they need them, due to a lack of available cash. Having access to quick capital to replenish stock, through a mobile app that allows seamless stock ordering and different forms of payment, has many advantages. It reduces risk, opens up opportunities, improves liquidity and streamlines the ordering process, helping to move from selling vans to pre-sales, connecting the last mile for actionable insights along the value chain .

Money under the mattress

Cash sales are the basis of traditional commerce, which can limit the purchasing power of retailers. They are limited by the money they have at that time, which can mean they are not able to buy all the stock they need or want. Lack of liquidity prevents holding optimal inventory, which in turn limits sales.

These retailers generally buy on the van, which means that they can only buy what the driver has in stock when the van is visited, or they participate in a stokvel and have to distribute the goods bought in bulk among the retailers. For perishable goods, this can also prevent the availability of fresh stocks. This has a ripple effect on the end consumer. There is also always a risk with the cash as it can be stolen from the retailer or the aftermarket van drivers which adds to the challenge.

Smarter solutions

Smart technology delivered through a mobile app can mitigate risk and provide traditional retailers with a plethora of opportunities. Not only can the order be made online, but payment gateways and even rolling credit and short-term loan options can also be integrated directly into the solution. This in turn reduces cash flow issues by providing cash and allows traditional retailers to access the presale environment.

With the consumerization of IT, the ordering process can become a e-commerce environment oriented, simplifying the process for retailers. With the addition of various payment options, retailers can buy more in bulk for better discounts, or more frequent orders to ensure stock levels are maintained without the need for a large upfront investment. Mobile wallet offerings can even be directly linked to financial institutions or other innovative payment systems.

A mutually beneficial arrangement

For traditional merchants, smart mobile apps give them greater flexibility and access to different types of financing and payment systems. This means less risk, more liquidity and better customer service. For distributors, this allows them to move away from selling pickup trucks towards pre-sales, which is an essential step in a just-in-time distribution model. The risk of drivers dealing with cash and ad hoc billing is also mitigated.

By closing the loop on the last mile of distribution, it is possible to gain a better understanding of purchasing habits and other trends. This in turn helps smarter manufacturing, distribution and decision making. Ultimately, this translates into better service for the end consumer, which in turn leads to increased sales and profitability along the chain.


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