TRENDING: When Covid stopped the music

by Louise Burgers. How do you continue to do business when all the rules have changed; your customers no longer need your services or want your products; and there is no longer any predictability to business?

by Louise Burgers. How do you continue to do business when all the rules have changed; your customers no longer need your services or want your products; and there is no longer any predictability to business? Up until February/March this year, business was fairly predictable, no matter which industry or where you were based, said Carl Wazen, co-founder and chief business officer of Yoco, speaking at the Flux Trends Retail Masterclass last week, to which Retailing Africa was a media partner. “To bring Covid into context, for us as a company, things were relatively straightforward, predictable up until early this year. Then Covid stopped the music. Our business was down 90% overnight when lockdown happened.” This was a reflection of their merchants being forced to stop trading under hard lockdown.

Yoco’s business model is to take a small share of every sale from its over 100 000 merchants with Yoco point of sale mobile pay point  devices, which is available for seamless same day trading at low cost. It has been an absolute gamechanger in the SMME market in South Africa, especially retail, health and beauty services, and the food services and hospitality industry, where the bulk of sales (70%) come from. Yoco’s business also comes from professional services, tourism, transport and other personal services. After its business ground to a halt because the majority of clients, SMMEs, were unable to trade for six weeks to up to three months, Yoco had to relook at their business model; starting from who they were serving to the products they had built, their teams, and how they collaborated and worked. “It was a very difficult time and we learned a lot and emerged a leaner and a better business because of it,” said Wazen. “The good news is that we are seeing a recovery to date in the SMME business segment.”

The biggest consumer shift has been the move to cashless, Yoco has found. While it has been on the cards for some time, the whole hygine factor with Covid has accelerated this trend, Wazen reiterated. What makes this significant is that while 80% of South Africans have a card or a bank account, fewer than 8% of businesses in South Africa accepted cards before lockdown due to COVID-19. This picture is now changing rapidly.

The main takeaway from the Flux Trends Retail Masterclass series, is that Covid has had a huge impact on the physical bricks and mortar retail environment, with the acceleration of ecommerce and the transformation of the retail space into a sterile, joyless environment to be avoided over the past six months, which has impacted on the customer experience; as well as the growing contactless economy. Said Flux founder and trend guru, Dion Chang, “Whether it is mobile app usage or deliveries or ordering kiosks, customers prefer a service channel that minimises contact with people. We are going to have to learn to manage the virus. It is not about ‘when’ the pandemic is over; but about managing life with the virus. We don’t want a resurgence and we don’t want to go back into lockdown. Yes, we may have a vaccine in 2021, but it will take time to roll it out globally.”

So how do you change consumer-facing businesses, is the question that Flux attempted to answer. What they are saying to all their clients, is that many companies have little choice but to begin revitalising their business models to meet the customer in this new environment and new mindset with changed priorities. The big question is: “Do your customers still need what you are selling?”

Despite the fact that the move to digitising business began in earnest over a decade ago, many larger companies have been slow to digitise their processes; but this has all been accelerated due to Covid and many organisations have now been forced into changing processes, while trying to survive in this new world. The emerging themes for business, across all business sectors, said Chang, are:

  • The fact that the velocity of change is increasing exponentially, so business needs to move fast, with a series of short term strategies to thrive or survive.
  • There is currently a rare opportunity to zero base all that you do, as all assumptions are gone. It is a good time to try new things and take risks.
  • Resilience is absolutely key. Just keep going.
  • Socialisation and nurturing or humanising your business. Chang says customers need to be convinced that the shopping environment is safe: “Empathy, empathy and empathy,” he urges.
  • Mental health considerations have been laid bare. People are going through a lot of pain in their personal and work lives. Chang’s advice is for retailers and brands to hold back on a hard sales push.
  • With the reorganisation of businesses generally, there may well be a change in ethos, in values and approach, related to trade and business, as business shifts online.

The Yoco data is extremely interesting. Wazen said it is a story of small business recovery in real time. Yoco released a SMME recovery monitor as they were able to track how their merchants have been trading pre- and post-Covid hard lockdown. “On an aggregate, our merchants have made close to a full recovery (according to the card data) which is good news; and there is a definite migration from cash to card. “In fact, of the merchant base of 8% that were not accepting cash in March – this figure rose to 32% in July. The sector that saw the fastest adoption of cashless transactions was food, drink and hospitality, which saw a jump from 3% to 19% mid-Covid lockdown. Customers are paying through tap, QR codes and some EFTs. Wazen said that 65% of their merchants not accepting cash, that were surveyed in July, expected contactless payment to become a permanent trend.

In the SMME sector, according to Yoco’s data, retail is now sitting at a 96% recovery since lockdown, which is testimony to the resilience of the sector, but also because it was the least constrained by lockdown trading regulations. The health and beauty sector which was severely constrained under the first three months of lockdown has now shown an 86% recovery from level 3. The hospitality industry, which has suffered greatly, is showing recovery, but not consistently across all provinces, with Gauteng recovering 92% from pre-Covid levels; and the Western Cape sitting at 76%.


Part 2 of the Alinea Flux Masterclass Series: Retail, hosted on Thursday 17 September 2020, by futurists Dion Chang and Bronwyn Williams, will be featured later this week.


Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.


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