For businesses across Africa, microeconomic factors such as the growing digital economy and changing consumer demand are driving organisational change. These factors will eventually force virtually every business on the continent to modify or add to the way they operate.
In fact, according to a US study by Gartner, 89% of board directors reported considering the incorporation of digital into all of their revenue growth strategies. Meanwhile, evolving consumer demands and the customer experience companies provide in order to satisfy them were said to increase business revenue by 4–8% above the market, according to another study.
For SMMEs, business owners, and leaders, the question will be whether they are willing to make the necessary changes to operations, products, and services in order to grow their bottom line.
Tech is the competitive edge
It’s no secret that companies that want to remain competitive must constantly improve and advance their offerings, particularly in the tech space, in line with market trends and in sync with customers’ constantly evolving needs and preferences.
Car insurance, as an example, has evolved over the years and is now at a point where technology is a prerequisite for competitiveness, with tech innovations being the differentiator driving the competitive edge amongst products and brands. If a company in this industry doesn’t review these advancements regularly, it’ll be left behind.
Head of digitally-based motor insurer MiWay Blink, Keletso Mpisane, says, “With the influx of information and choices available to the modern customer, insurers have to leverage tech to meet their customer’s needs and constantly keep upgrading their products.”
Pivoting to ecommerce
Many retailers, for example, might look to open up in new markets in order to mitigate some of the difficulties associated with operating in an environment like South Africa. Joel Brokowski, Country Lead, South Africa at financial technology firm Paystack, comments that “Ecommerce affords them the ability to do so without having to set up physical stores. That, in turn, means that they can sell products at greater volumes without drastically increasing their overhead costs.”
Those new markets don’t just have to be in one region, either. By going online, retailers can potentially reach customers globally, expanding their potential customer base. Take one South African farmer’s adoption of ecommerce and customer deliveries, for example. What started out for Alberton-based farmer Rick Hein as a business supplying freshly harvested microgreens to local restaurants, food stores, and farmer’s markets has grown into a flourishing business with nationwide reach.
“When we started out in 2019, we only sold microgreens to restaurants and individuals wanting orders of microgreens. But as interest in the product grew, our vision became one that would have microgreens accessible to every household in the country,” says Hein, MD of MicroThumbs.
Hein decided to package the powerful health benefits of microgreens into a product range that includes infused pestos and green powders, now available at national retailers or via online delivery. He also took his state-of-the-art indoor vertical farming concept and turned it into a successful agricultural business model that can be replicated by individuals. “Over the last four years, we’ve gone from one farm to 28 across South Africa, spanning Cape Town, Soweto, and KwaZulu-Natal, and there are currently plans to expand even more,” says Hein.
“Online retail allows for more flexibility in inventory management. Retailers can, for example, adopt dropshipping models, where the products are shipped directly from suppliers or their retail stores (click and collect is a great model for this), reducing the need for storing inventory. Physical stores, by contrast, require dedicated space for inventory storage, potentially further increasing costs,” adds Bronkowsi
Communication and affordability in tough economies
“When considering the most effective communication methods, keep in mind that we’re talking to people,” says Andrew Bourne, Regional Manager, Africa, at technology firm Zoho. “A better understanding of our customers’ needs and challenges is required. It is important to recognise that this is an opportunity to learn more about your customers,” he adds
Bourne goes on to say that it’s become even more important to ensure that any communication is not only effective, but also meaningful. “Check in with your customers to see how they are doing and what special needs have arisen as a result of the rise in the cost of living.”
When it comes to small businesses, this could mean giving them free access to software so that they can find their feet while times are tough. “Zoho’s Small Business Emergency Subscription Assistance Program gave disrupted businesses access to Zoho software for free for three months to offer some reprieve during challenging economic times,” ends Bourne
Whether it be offering discounted or free trial products to improve customer experience, pivoting to provide customers with online purchasing options, or the adoption of new technologies, in order to grow and change, businesses must be willing to modify in order to grow their bottom line.