Africa will have 1.1 billion consumers by 2020. This is more than the combined population of Europe and North Africa. In Kenya, 2018 retail outlook paints a very optimistic picture with retailers such as Tuskys announcing a 3 year plan to increase foothold by over 50 % with the opening of 100 stores in both Kenya and Uganda.
However there still remains a great challenge in staying competitive in this buoyant retail environment. Informal trade still dominates the marketplace and though disposable income levels are rising among the middle class, consumers are still largely price sensitive.
Modern trade retailers have been forced to rethink their expansion strategies, shelving larger stores for smaller outlets and optimized stock levels, in order to survive the harsh trade winds that often capsize the best of retail strategies.
What more can retailers do to shore up efforts to not only remain afloat, but walk over the waters of success in retail?
Retail execution is no miracle. It is a science that is fueled by data that translates into a masterful art of strategy. Here are some practical applications of how this science and art of strategy come together to solve some of the greatest headaches in retailing.
Shift in shopper behavior
If there is one thing retailers should take note about the whole “Fake News” and its impact on politics scenario, its that there is a complex battle for the hearts and wallets of consumers and it is being won by those who understand how powerfully and personally consumers purchasing decisions can easily be influenced by just about anyone.
Tech has occasioned the reality of the highly informed consumer. Before making significant purchases, consumers are more likely to Google reviews on products they want to purchase and where to get them. More than ever, retailers should be seeking specific answers to questions like “Who is my customer”? With all the best laid plans in customer service, stock efficiencies, engaging promotions, retailers must remember customers are human beings first and then consumers. To expect customer behavior to shift or change is reasonable. To predict customer behavior and appropriately respond or cater to the change is the pulse of 21st century retail.
As real estate prices continue to soar, retailers will be forced to look for cost saving means or areas ways in which they can maximize returns from each outlet’s retail operation. Cost optimization becomes an important factor of retail success. Exactly how this gets done could be the analog stuff of a cost-cutting manager who walks the factory floor or the function of an algorithm that optimizes efficiencies by giving a clear picture on all ROIs in a single view dashboard. This digital capability greatly reduces turnaround times and in the conventional wisdom of time being money, can convert to significant savings for any retail operation.
Declining or flat revenues
Declining or flat revenues are both a fact and reality of every retail journey. However the acceptance of this reality should never form part of the marketer’s mindset. This could easily be the kiss of death for retail. Consistent acquisition of data can help uncover insights into pricing, stock, and distributor in-efficiencies, which in turn helps retailers identify and deal with issues in a timely manner. The danger however lies in marketers over-extending their abilities into data science. Many marketers have been disillusioned by the Big data hype; investing in expensive, sophisticated software whose full potential they are unable to harness simply because they lack the time, skill and science of the discipline.
The rise of omni-channel shopper
The reality of retail must embrace digital possibilities. It’s no longer a matter of if online shopping will affect sales but rather when online retail will surpass brick and mortar retail. Rather than fighting the tide, retail is ripe and ready for a steady growth into the online space. Implementing an online strategy can offer many lessons and insights that augment a brand’s equity and potentially build into actual revenue growth as tech and trade increasingly converge.
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