With the increasing entry of giant global brands into the East African market, local retailers may feel threatened by the competition. Global brands can be intimidating for local retailers. From massive marketing budgets, to expert teams in different parts of the world, seamlessly working together to stamp their global footprint on your local doorstep, local businesses may seem hard pressed to take on the fight against the more established brand names.
There are quick win strategies local retailers can adapt to not only hold on to their share of the market, but also boost sales and grow their profitability. The first thing to do is to appreciate a very important insight: Global brands investing in the local market is a strong indicator that the “retail pie” is much larger than you think. If they want in, then chances are their market intelligence has seen credible proof that the pie is large enough to share.
On appreciating this special fact, the next thing a local retail business should do is ask the hard questions…. “Am I ready for the competition?” How do I not only hold on to my piece of the pie but also grow my share of it?
Here are 10 winning ways that can help local retail businesses gain a competitive advantage over global brands.
Frontier Consulting’s Managing Partner-Retail Consulting, Mr, Jonathan Karanja with Mr. Thiagarajan Ramamurthy- Regional Director- Retail strategy; Operations Nakumatt Holdings, and Prof. James Woudhuysen- London South Bank University.
Panelists (left to right): Mr.Thiagarajan Ramamurthy- Regional Director Strategy; Operations, Nakumatt, Mr. Jonathan Karanja- Managing Partner, Retail Consulting, Frontier Consulting, Prof. James Woudhuysen, London South Bank University, Mr. Vivek Sunder- Managing Director Proctor; Gamble and Mr. Sailesh Savani- Managing Director Compulynx
1. KNOW YOUR BRAND
Don’t just be another bookshop, footwear shop, supermarket, or fast-food!
Define, refine and articulate your brand. Global brands already come with a distinct brand identity and personality. They are clear on who they are and whom they resonate with. You too have an established brand by virtue of the fact that you have been in business successfully for the past many years. It may be the case you just have never really thought much about your brand, defined it, refined it and articulated it. Now is the time to craft a distinct identity that sets you apart from your competitors, otherwise you will be eclipsed and silenced into oblivion by the louder brands.
2. KNOW YOUR CUSTOMERS
As a customer-centric retailer, formalize what you already know about who comes to your outlet. Define your customer, build a profile about them, what they like, what their tastes and preferences are, why they choose you and what may make them walk away from you. Speak about these things with your team. It’s important to understand your customers’ behaviors, aspirations and anticipate their future needs. In this way, you make it harder for them to walk away from you to someone else.
3. DON’T BE AFRAID TO LEARN FROM THE COMPETITION
Learn by studying strategies that global brands use in other markets. Pay a visit to their outlets and experience their service offering. Shamelessly borrow what you believe can work for you. Chances are they have made some costly mistakes that they have refined and perfected on. By adapting some of their processes you may save yourself having to learn some of those painful lessons. Even more importantly, some global players do the same with your business. For a period prior to the 18 months before they set up shop, they are studying your business and learning and adapting from you. You just cannot afford to compete blind anymore.
4. USE THE DATA YOU ALREADY HAVE
One thing every global retail business does is strive to understand data they are already sitting on. You too should take advantage of customer data already in your possession. Seek the help of a retail analyst to help you understand your product/service categories, customer databases, business processes better. Retail analytics can provide you a wealth of insights such as what goods and services are most preferred by your clientele, what demographic your business resonates most with, etc. This in turn can help you streamline your retail experience to better cater to your clientele. This should be your first stop in competitive advantage.
5. MEASURE, MEASURE, MEASURE
What’s your “churn” rate (i.e. the rate at which you are losing valuable customers who visit your business)? What are the reasons behind an increasing churn rate? What is the value of the abandoned shopping baskets at the check-out counters of your supermarket? Why are there more abandoned baskets in one of your retail outlets compared to another? What’s your investment return per restaurant? What’s the value of increased revenue you got from a specific marketing activity? How many customers come into your shop every month? Every Wednesday? What’s your margin by product/category?… All these factors tell a story about your business. You should be able to interpret these into business insights for successful retailing.
6. WIN WITH WHAT YOU ALREADY HAVE
Great staff! Great locations! Experienced managers! Local knowledge & expertise! Great Customers! This is one advantage no one can take away from you, except YOU!
7. CHANGE BECAUSE YOU MUST
What got you where you are today will not necessarily get you where you need to be tomorrow! You have to adapt to the changing environment around you and that no doubt means you too must change. Global retailers are always looking at how to adapt to local cultures and practices to remain relevant. You too must change with the times because your consumers are also evolving and responding to new entities in the market.
8. SHARPEN THE SWORD
Starting with the CEO / Chairman, everyone must commit to continuously learn. Take advantage of the numerous digital courses and free learning materials available online. Have a book you are always reading, be curious about the world around you and how it impacts you, follow thought leaders on twitter and LinkedIn. Keep learning. Simple.
9. HAVE WELL-ARTICULATED BUSINESS PROCESSES
Having well-developed and documented business processes allows you to consistently deliver on your promise, gain predictability on cost and manage risk. Business processes that work further enable your staff teams to be innovators in thought, process and products. For a business owner, business processes also make it easier to examine and review the building blocks of your business. Global chains have this nailed down to a “T”.
10. Be bold and ambitious…BE a Global KENYAN BRAND
You too can export excellence and be the benchmark that global retailers want to emulate. While your business may be local today, it doesn’t mean it should remain that way forever. Build a vision for your business that includes exporting it beyond the borders.