Andrew Dawson, CEO of MACmobile.
Traditional retail across Africa is heavily driven by a cash economy and van sales, which involves a significant amount of risk. Cash flow issues can also limit business opportunities, as retailers in this market may not be able to purchase the inventory they need when they need it, due to a lack of available cash. Having access to quick capital to replenish inventory, through a mobile app that allows seamless stock ordering and various forms of payment, has many benefits. It reduces risk, opens up opportunity, improves liquidity and streamlines the ordering process, helping move from pickup truck sales to pre-sales, connecting the last mile for actionable insights across the value chain.
money under the mattress
Cash sales are the basis of traditional commerce, which can limit the buying power of retailers. They are limited by the money they have at the time, which may mean they are not able to buy all the stock they need or want. The lack of liquidity prevents the holding of an optimal stock, which limits sales.
These retailers usually buy from the van, which means 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 between the retailers . For perishables, this can also prevent the availability of fresh stock. This has a ripple effect on the end consumer. There is also always a risk with cash, as it can be stolen from the retailer or 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 wealth of opportunities. Not only can ordering be done online, but payment gateways and even rolling credit and short-term loan options can also be integrated directly into the solution. This reduces cash flow problems by providing liquidity and allows traditional retailers to access the presale environment.
With the consumerization of IT, the ordering process can become a familiar e-commerce-focused environment, simplifying the process for retailers. With the addition of various payment options, retailers can buy more in bulk for better discounts, or order more frequently to ensure stock levels are maintained without the need for a large upfront investment. Mobile wallet offers can even be linked directly to financial institutions or other innovative payment systems.
A mutually beneficial arrangement
For traditional merchants, smart mobile apps offer them greater flexibility and access to different types of financing and payment systems. This means less risk, greater liquidity and better customer service. For distributors, this allows them to move from selling vans to pre-sales, an essential step in a just-in-time distribution model. The risk of drivers dealing with cash and one-time bills is also mitigated.
By closing the loop on the last distribution mile, it is possible to gain a better understanding of buying habits and other trends. This in turn facilitates smarter manufacturing, distribution and decision-making. Ultimately, this results in better service for the end consumer, which in turn leads to increased sales and profitability throughout the chain.
