Byline: Captain SA
Conventional wisdom suggests that winter is one of the weakest periods for retail trading in South Africa. However, a big data analysis commissioned by Capital Connect, a fintech company that offers fast and flexible business funding to South African retailers, reveals that retail sales tend to pick up in winter after the quiet autumn months.
#ConsumerBehavior #RetailFinance #SalesBoost
Research conducted by the Bureau of Market Research (BMR) finds that retailers can profit by stocking up on pharmaceutical goods, winter clothing, and certain foods and beverages. This analysis breaks down the performance of retail subsectors for winter 2024 as follows:
- General Dealers: Historically, general dealers see a rise in winter sales compared to earlier parts of the year. They benefit from customers buying hot beverages like coffee, tea, and hot chocolate; vegetables and meats for soups, stews, and other hearty meals; clothing items like sleepwear, winter wear, and warm children’s clothes; blankets and fleeces; cold and flu medicines and over-the-counter treatments; vitamins and immune boosters; and certain small appliances like heaters and toasters.
- Food, Beverage, and Tobacco Specialised Stores: These stores generally experience growth in the winter months compared to the first quarter of the year. Like general dealers, they benefit from sales of ingredients for hot beverages and nutritious, affordable winter meals.
- Pharmaceutical, Medical Goods, Cosmetics, and Toiletries Dealers: These retailers profit from the cold and flu season. Products that sell well include prescription medicines, cold and flu medicines, throat lozenges, skin creams and lotions, moisturisers, cough syrup, pain relievers, nasal spray, immune system boosters, clinic services, and hair dryers.
- Textiles, Clothing, Footwear, and Leather Goods Dealers: Sales tend to pick up for thick socks, winter boots, hoodies, jerseys, sweatshirts, thick cloth trousers, long sleeve shirts, slippers, warm sleepwear, as well as ladies and children’s winter clothing. However, local retailers are losing out on sales to international brands.
- Household Furniture, Appliances, and Equipment Dealers: These retailers experience little growth in the winter months compared to the first quarter of the year. But there are opportunities to drive sales of heaters, carpets, cookers, ovens, hair dryers, vacuum cleaners, small kitchen appliances, toasters, grills, roasters, and coffee machines.
- Hardware, Paint, and Glass Dealers: These retailers generally experience low growth in the winter months. The only products standing out as strong winter sellers are firewood, heaters, grillers, and some DIY products.
#CapitalConnect #RetailInnovation #WinterRetail
Steven Heilbron, CEO of Capital Connect, emphasizes that retailers aiming to grow and thrive need to maximise their opportunities during every season, even those that are traditionally quieter trading periods. To win market share during a time of the year when there aren’t many big holidays and when people are staying indoors, retailers need to be innovative to move the needle.
#BusinessFunding #SeasonalMarketing
Creative promotions and strategic stock purchases can give retailers an edge during winter. Some ideas they can consider include:
- Hosting winter-themed events such as cooking classes for winter recipes or wine tastings featuring robust red wines to boost sales within the supermarket and liquor verticals.
- Developing winter-themed promotions with attractive deals on seasonal essentials like winter woollies and soup mixes.
- Creating bundles—such as soup ingredients or flu-fighting kits—to increase basket sizes.
- Offering a warm refuge by creating an enticing space for customers to linger with soups, hot chocolate, and a fire or heater in your coffee shop or bistro.
#BigData #MarketResearch #RetailStrategy
Heilbron adds: “Whether retailers want to invest in winter advertising, buy products in bulk at reduced rates, expand into new channels, or revamp their stores, they need access to fast, reliable finance to execute their growth strategies, so that they do not miss out on golden opportunities. With Capital Connect, they can apply for unsecured short-term opportunity capital up to R5 million from our app and the funds will be in their bank account within 24 hours.”
#RetailTrends #WinterSales #SouthAfricanRetail
The BMR’s analysis, which included datasets from StatsSA retail data, SA Reserve Bank National Accounts data, the Living Conditions Survey of StatsSA, and other big data sources, determined which products sold well during the winter months of 2015 to 2023 and which products are expected to sell strongly in winter 2024.
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Thanks for your help and for writing this post. It’s been great.
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I’m glad to hear my articles are helpful! Let’s dive deeper into how South African retailers can take full advantage of the winter season and boost profits even when foot traffic may be lower. Here’s an expanded look at practical steps and strategies to capture seasonal demand.
1. Leveraging Consumer Behavior Data for Targeted Promotions
Retailers can capitalize on data showing the surge in demand for specific winter products, such as cold and flu medicines, warm clothing, and cozy home goods. For example, general dealers and pharmaceutical stores can create endcap displays or website features for these seasonal essentials, encouraging customers to stock up in one visit.
Suggested Approach:
-Product Bundles: Bundle immune-boosting supplements with cold-relief products, offering a small discount for buying the full “winter wellness” kit.
-Seasonal Advertising: Focus marketing efforts on social media, radio, or TV ads that emphasize staying warm, healthy, and comfortable, spotlighting your winter-specific offerings.
Example Hashtags: #WinterWellness #StayWarmStayHealthy #FluFighterKits
2. Hosting Seasonal In-Store Events
In-store events can enhance customer engagement and make shopping an experience. Events like cooking classes for hearty winter recipes, coffee tastings, or even winter fashion showcases could attract both existing customers and new faces.
Suggested Events:
– Winter Recipe Cooking Classes: Host an event showcasing recipes that use your food products. For example, a “Soup Season” event can feature ingredients sold in-store, like vegetables, herbs, and meats.
-Cozy Corner Promotions: If you have a coffee shop or small café, set up a winter-themed space with blankets, warm drinks, and heaters, creating a relaxing atmosphere for shoppers.
Example Hashtags: #WinterCozyCorner #SeasonalTastings #SoupSeason
3. Strategic Stocking Based on Demand Trends
Retailers can benefit from stocking up on high-demand items such as warm clothing, immune-boosting supplements, and hot beverage supplies. Focusing on these items can increase sales and ensure customer satisfaction, as customers will have more variety to choose from in-store.
Practical Tips:
– Early Stock Replenishment: Analyze which items have seen the highest demand in past winters. This might include gloves, thick socks, vitamins, and over-the-counter cold medicines.
-Highlight New Arrivals: Display “new in stock” tags on products that are highly seasonal, such as blankets, heaters, and winter boots, so customers immediately know where to look for the latest.
Example Hashtags: #NewArrivals #WinterEssentials #StockUp
4. Creative Use of Financing for Growth Initiatives
Access to quick capital is essential for seizing opportunities, especially in winter when additional marketing or stock replenishment might be needed. Companies like Capital Connect provide fast funding options, allowing retailers to act on strategic plans without missing out on seasonal profits.
Funding Ideas:
– Store Revamp: Use funds to create a warmer, more inviting store layout for winter, with cozy seating and inviting displays.
– Bulk Inventory Purchases: Invest in bulk orders of high-demand items (like heaters and vitamins) to reduce costs and pass on savings to customers.
– Seasonal Marketing Campaigns: Fund a robust winter marketing campaign to draw in customers. This could include paid ads on social media, radio spots, or partnering with local influencers.
Example Hashtags: #RetailGrowth #SeasonalSuccess #FinanceForRetail
5. Seasonal Discounts and Loyalty Programs
Discounts on winter essentials or loyalty rewards for frequent shoppers can encourage return visits and higher spending per visit.
Suggestions:
– Customer Loyalty Program: Launch a winter-only rewards program offering points for every winter essential purchased, redeemable on future visits.
– Discount Bundles: Offer bundles like “Warm Winter Kits” with blankets, hot chocolate, and immune boosters.
Example Hashtags: #WinterSavings #LoyaltyRewards #BundleDeals
Using data and creative approaches, South African retailers can make winter a season of opportunity and growth. Strategic planning, capital investment, and customer-focused promotions will help retailers turn the traditionally slow months into a period of profitability. Let me know if you’d like more insights or examples!