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MUST you buy into Black Friday? The pros and cons

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Black Friday, once only a North American marketing frenzy, has become a critical entry in the calendars of South African retail business owners.

Research published by Stats SA says that historically, the most important month of the year for retail trade is December, when many consumers are on holiday and go Christmas shopping. But December 2018 was a tough month for retail in South Africa with the volume of sales falling by 1,4% year-on-year.

The poor performance of retailers in December followed a fruitful November, when Black Friday boosted sales to 2,9% year-on-year.

Dov Girnun, CEO of Merchant Capital, an innovative fintech funder that provides working capital to retail SME’s across the country, says Black Friday presents a moment in time in the sales cycle, and business owners still need to consider whether the concept will make sense for their business’s growth.

“Small business growth is a delicate balance between doing what works and taking advantage of the right opportunities. Retail business owners should carefully weigh up the pros and cons before being swept away by the Black Friday wave,” says Girnun.

Girnun outlines the following pro’s and con’s that retailers should consider before jumping on the Black Friday bandwagon.

Shopper enthusiasm

Pro: Savvy customers look forward to a good bargain. They actually plan their year-end spending around this one retail event. They believe that they will enjoy savings and great deals which will often prompt larger spending and additional ‘treats’ for themselves.

Con: There was a time when festive season shopping mainly occurred in December. Black Friday has changed this. What was normally a very good festive season trade, can now mean rapidly reduced December turnover. Retailers need to work this new spending habit into their projections and stock flow.

Significant noise

Pro: If you can deliver agile marketing messaging and have a tactical social and email marketing campaign behind you, you may well be able to fight the clutter and up your sales in a meaningful way. 

Girnun says: “In our experience, small businesses use the funds we lend them for anything that will be additive to the growth of their business: to hire more employees; buy new equipment; refurbish their store; buy more stock – and even for marketing – they don’t necessarily have to be elaborate plans, but each funding step is crucial to the next.” 

Con: As a small business you are up against the big guys: large retailers with huge marketing campaigns behind them. Certain larger retailers will even offer loss-leaders to draw in customers.

Shed old stock for small business growth

Pro: Small business growth is often the difference between sitting with old stock or shedding your load. Black Friday is a great way to encourage take-up of old redundant inventory. Making way for the new.

Con: On this day, over any other, customers are price-sensitive. They expect a good deal otherwise will gladly shop elsewhere. Heavy discounts might be the only way to win that sale over your competitor. But this is often a discount that isn’t worth the sale.

Scaling up for traffic

Pro: Black Friday is a marketing vehicle to assist in scaling up your customer traffic. It is a unique opportunity to attract new customers and satisfy existing ones. Just make sure that your store has the capability to restock quickly and check customers out efficiently.

Con: Sub-par in-store or online service can have a negative knock-on effect on your brand. So make sure you employ more staff and security on the day and upgrade your online systems so that they can carry an abnormal load should it arise.

Realising retailers’ eleventh-hour cash needs and taking the rapid evolution of technology into account, funders like Merchant Capital have the capability of assessing and approving a loan in just 24 – 48 hours, offering retailers an opportunity to scale up if need be at lower risk.

What are your competitors doing?

Pro: If your competitors are in the space, this may mean it’s good for your vertical. Simply being there may be a good way to claim your stake in some way.

Con: If you aren’t in the game, you can almost guarantee it will be a bad sales day. But FOMO alone (Fear Of Missing Out), is a dangerous hill to climb. So think clearly and make decisions that are right for your business!

Girnun says: “The jury is out as to whether Black Friday makes sense for all small businesses. But what is very clear is that retailers need to think long and hard about capacity, strategy, bottom-line, and long-term impact before committing to partake in Black Friday.”

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Liquid, IS, partner for 5G roll-out to corporate SA

Liquid Telecom has teamed up with Internet Solutions to develop an ultra-fast wholesale connectivity service for enterprises – including telcos

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Liquid Telecom South Africa has partnered with Internet Solutions (IS) to provide wholesale 5G connectivity targeted at delivering enterprise services to their existing and potential new customer bases.  

The 5G service will provide operators and internet service providers with faster speeds, lower latency and greater capacity, ultimately enabling businesses to deliver richer experiences to their customers.

“Providing IS with 5G wholesale services as an alternative to fibre connectivity, Liquid Telecom South Africa is highlighting how we are delivering on our commitment to the market to continue being the best business network in South Africa,” says Reshaad Sha, CEO of Liquid Telecom South Africa. “Local businesses are adopting technologies like SD-WAN, IoT, and cloud computing, However, these technologies need network connectivity that provides high quality, increased capacity, and greater reliability to ensure optimum performance.” 

IS managing executive Dr Setumo Mohapisays the company has evolved its networking model to provide a high-performance hybrid network that aggregates multiple WAN transport services. 

“This enables clients to fully utilise all available bandwidth for high availability and total application performance,” he says. “The innovation, flexibility and range of 5G use cases that this offers for different industries such as agriculture, retail, manufacturing, and logistics is boundless. 5G is a core component of our hybrid network and we are extremely excited about the extended capability this partnership with Liquid enables us to offer our clients.

Liquid Telecom is the first to launch a 5G wholesale network service, which it says will “accelerate the building of Africa’s digital future and the  digital revolution in South Africa”.

Liquid Telecom is a leading communications solutions provider across 13 countries, primarily in Eastern, Southern and South Africa. It serves mobile operators, carriers, enterprise, media and content companies and retail customers with high-speed, reliable connectivity, hosting and co-location and digital services. This means that it can provide the basis for its clients to offer 5G services to end-users.

Liquid has built Africa’s largest independent fibre network, approaching 70,000km, and operates state-of-the-art data centres in Johannesburg, Cape Town and Nairobi.

IS, which pioneered Internet connectivity in South Africa, is a subsidiary of the Dimension Data Group and part of Japanese telecoms giant NTT. It now leverages its infrastructure and global footprint to support organisations with the rapid deployment of emerging technologies. Still headquartered in South Africa, it has operating offices in Mozambique, Uganda, Ghana, Kenya and Nigeria. It has 82 Points of Presence (PoPs) in 19 African countries and four international PoPs in London, Germany, Hong Kong and Singapore. The company has over 10 000 square metres of data centre space across Africa.

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So you think you need a Blockchain?

By CAYLE SHARROCK, Head of Engineering at Tari Labs

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It’s 2020, and we’re still in hype overdrive about blockchain. If conventional wisdom is to be believed, blockchain is going revolutionise and disrupt every industry known to humankind.

But does every industry actually need a blockchain? Let’s take an objective look at two of the most aggressively touted use cases for Blockchain to see if it’s all it’s cracked up to be.

Before we do this, let’s remind ourselves about the four pillars of Blockchain technology and what they give you: tamper-evident logs (the blockchain); cryptographic proof of ownership (digital signatures); public accountability (the distributed public ledger); and corruption resistance (proof of work).

If we use these four features as a checklist, we can evaluate any proposed use case of blockchain technology and decide whether the potential is genuine, or whether it’s just buzzword bingo.

Banking

There have been hundreds of headlines over the past four years proclaiming how Bank Y will use Blockchain to disrupt the industry. Usually, what they claim is that they can perform interbank settlements at a fraction of the cost of what the incumbent monopoly, SWIFT, provides.

So does Blockchain work for the banking sector? Clearly, tamper detection of the transaction history is a must-have here. What about digital signatures and proof of ownership? Without a doubt. Multiple signatures? The more the merrier.

Bitcoin was conceived as trustless money – and with banks, we have a fairly small community that is heavily regulated, and that do actually trust each other to some degree. Essentially, banks use governments’ big stick instead of proof-of-work to keep everyone honest. This works most of the time. Except when it doesn’t. The 2008 crisis and the 2012 Cypriot haircuts are just two examples.

How about Public Accountability from distributed public records? No, public accountability has never been the banking sector’s strong suit. That means the banks’ ideal “blockchain” is just tamper detection, plus digital signatures. This sounds like a bunch of databases that have tightly controlled access along with strong cryptographic signatures.

The banks actually gave this non-Blockchain blockchain a name: Distributed Ledger Technology. And it’s pretty much what SWIFT already does.

Verdict: Do banks need Blockchain? Nah. They want a cheaper alternative to SWIFT.

Supply-chain management

Blockchain technology is going to revolutionise the supply-chain management (SCM) industry, we’re told. BHP Billiton was one of the first large companies to announce in 2016 that they were implementing Blockchain for their core sample supply chain. We’ve heard similar stories about the diamond industry.

Whether you think a proof-of-work Blockchain makes sense for SCM is really secondary to the challenge of The Oracle problem: blockchains are brilliant at letting you know when data in the system has been compromised. But they have zero sense whether that data is true or not.

The Oracle problem arises whenever you need to bring the concept of truth, or providence from the real world into a trustless system like Blockchain. How does the core sample data get onto the blockchain ledger? Does a guy type it in? Does he never make mistakes? Can he be bribed to type in something else? If it’s a totally automated system, can it fail? Be hacked?

Maybe we solve this by having two systems running and we compare the results. Or three. Or four. Now we have the problem of having to ship our samples to different labs around the world and be sure they weren’t tampered with in transit. If only we had a blockchain-based SCM system to secure our blockchain-based SCM system …

Verdict: The Oracle problem is really hard, and torpedos a lot of tangible good-based blockchain proposals.

So, back to our original question: do you need a blockchain? Ultimately, the future of blockchain applications (beyond money) lies in whether the benefits of having a decentralised, public record secured by proof-of-work outweighs its costs. There are plenty of really encouraging use cases emerging – think ticketing, for example, or trading in any digital assets. But for most industries, the jury’s still out.

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