Sector focus: understanding the needs of your retail clients by Capitalise

What’s happening for your retail clients?

Large retail chains have not had an easy time lately with several big brands closing including Wilko, Paperchase, M&Co, Body Shop and Ted Baker. In fact, the British Retail Consortium said 6,000 retail outlets closed between 2018-2023.

Many local smaller business owners were also impacted by the extended lockdowns and the new ‘work from home’ regime which affected footfall.  

More recently, geopolitical turmoil, rising rents, rates, higher logistics and transport costs, labour cost increases and supply chain delays have all caused considerable challenges for our owner-managed business clients in this sector. 

In addition, new online entrants from the Far East, such as Shein & Temu, are proving difficult to compete with on price, due to their agile business model and powerful social media strategies. 

Good news on the horizon!

The good news though is that sales volumes are reported to be rising again, certainly for low cost items such as food, beverages & household goods, whilst bigger ticket items are still struggling. 

Some retailers have found ways to avoid the high-street malaise and your own clients may be able to be benefit from one of these successful strategies too: 

• Sustainability policies eg minimising waste or recycling

• Focusing on smaller communities - either very local or niche interest groups

• Strong social media content, fun, shareable

• Immersive or interactive experiences in-store, tailored to customers’ particular needs

• Multi-channel with slick online ordering and delivery options

How can you assist?

As an adviser you can support in the first instance by giving them access to real time data which allows the business owner to understand the reality of their finances and cash flow. 

Helping them understand the numbers and discuss possible strategies is always welcomed by clients. There are more ideas for business advisory opportunities here. 

In terms of their cash flow challenges, ready access to finance allows them to take advantage of better purchasing prices when they arise.  Ensuring your client has a strong credit score means they can obtain good credit terms with suppliers. 

Seasonality of sales can be difficult to manage and some funding products are more suitable to this sector.  

Besides the standard term loan product, revolving credit facilities or merchant cash advance products are ideal for retailers, whether trading in person or online.  

In addition, if they have a debtor with a payment platform, there may be merchant finance available, a specific type of invoice finance for online traders. 

Further support for you and your clients

At Capitalise we work with 100+ business lenders across the full range of products, allowing you to compare options and find the most suitable facility for your client’s needs.

For more information about each of these specialist products, and to find out how to ensure your client has access to capital and the strongest credit score possible, speak to your Partnership Manager.  

Alternatively contact us to book a demo of the platform and find out how you can help your retail clients, as they navigate how to grow.