A Clean Shelf Supermarket in Kayole, Nairobi. PHOTO | SALATON NJAU | NMG
The Kenyan retail market is
fast-evolving with supermarkets opening up sporadically in towns around
the country leaving shoppers spoilt for choice.
For
retailers, however, overcrowding of players demands constant reinvention
for sustainability. Local merchandisers are slowly waking up to the
reality that the real differentiator in the modern-day retail industry
is neither the size of floor space nor the variety of commodities on
shelves but the shopping experience.
Customers now
demand that retail stores be more than just transactional venues but
also avenues in, which they can have special and in-person experiences
that cannot be replicated in the e-commerce environment.
“Shopper
experience can no longer be ignored, and this explains the investment
some of the retailers are making. When a supermarket has a great
ambience, nice and spacious aisles, and a good display of products, it
catches the eye of shoppers and grows sales,” said Wambui Mbarire, chief
executive officer Retail Trade Association of Kenya.
“It also makes the customer feel important, and they are more likely to shop more and come by often,” she added.
This
explains the growing number of outlets that are now foregoing the tired
supermarket layouts, which often maximise on space at the expense of
customer comfort, to embrace modern designs that ensure a pleasant visit
to the store.
Emerging marts are spacious, well-lit and attractively-designed,
factors that are increasingly important in ensuring a complete sensory
experience during shopping.
“To keep their stores
relevant, retailers need to make the most of the stores built-in sensory
advantages over e-commerce — they need to tout the experience of
touching, smelling and trying on products, and they must ensure that the
in-store experience is enjoyable and convenient. Otherwise, customers
will simply not bother making the trip,” said Consultancy firm McKinsey
in The Ever Changing Store report published in April 2019.
International
consumer insights firm Nielsen in a report released a fortnight ago
also noted that 74 per cent of Kenyan shoppers prefer patronising
outlets that are attractively organised and have a pleasant ambience.
Experts
say with the fast-changing consumer preferences, retailers should be
fast to change their store formats if they are to keep customers
interested.
Creating a distinctively compelling
customer experience requires retailers to redesign their store formats
in most cases, said McKinsey.
“And there is no time to
lose; competitors are moving fast. Even companies that started as
pure-play online retailers — such as Amazon — are opening
brick-and-mortar stores so that they, too, can offer sensory
experiences,” McKinsey added.
“So, for traditional
retailers (supermarkets and kiosks), the pressure is on; the time to
invest in format redesign is now. Yet many retailers still only refresh
their store formats in three- to five-year cycles. That’s an eternity in
today’s world, where consumer demands and behaviour are changing
rapidly.”
Noteworthy is that in the crowded retail
market space, the experience per square foot is becoming an important
matrix for success, according to consulting and audit firm KPMG's 2018
global retail trends.
Remodelling
Supermarket
format redesign done well, for instance to accommodate a wide selection
of goods within eye’s reach, can potentially boost sales by 10 to 15
per cent, and customer satisfaction by 20 per cent, all within a year or
less, McKinsey noted.
A few retail firms have learnt this trick and are already setting resources aside for revamping their retail spaces.
Naivas
Supermarket, for instance, is remodelling their Capital Centre outlet
barely a year after launch, moving away from the past practice when
retailers made renovation efforts only when their structures were at the
brink of collapse.
“We always keep reinventing to make
sure that we are up to speed with competitors. We are striving to give
our customers a better shopping experience and these changes are being
informed by them,” said Naivas Supermarket Chief Commercial Officer
Willy Kimani.
Several second tier supermarkets (those
that cater to the more price-conscious customer) such as Quickmart,
Tumaini and Cleanshelf have also embarked on a facelift of their
facilities to wade off competitors.
The
outcome of such updates presents in well thought-out store architecture
and friendlier retail designs, arising from deliberate consultations
with specialised design and planning firms. Cleanshelf said during the
launch of their overhauled Kayole branch, that they had sought the help
of a local design and fittings firm Renova Limited, to craft its chic
look and a fresh foods consulting company, Professional Vision Group to
draw up their menu.
Similarly, Quickmart who are set to
unveil two new branches — one on Waiyaki Way and another in Rongai —
confirmed entrenching international best practices in their structuring a
path charted by its managing director Duncan Kinuthia.
“We
are benchmarking on visual merchandising, and so we are investing in
quality equipment and interior finishes to ensure that the products are
beautifully displayed. Our focal point is the customer and in all our
branches we want them to have it fresh and easy,” said Quickmart’s Head
of Marketing Betty Wamaitha.
Customers disloyalty
Yet
facility design alone will not make one a better seller. Retailers also
have to contend with the buying patterns of local shoppers who are
known to be experimental and passionate about trying out new products.
Kenyan buyers have been branded disloyal and addicted to “newism”, to
mean that they are more likely to settle on a product that is fresh on
the shelves for the perceived notion that it must be better.
Nielsen
revealed that disloyalty was the new norm and that retailers should
keenly pay attention to customers who are becoming highly conscious of
quality. The researcher recognised that 88 per cent of shoppers are
ready to defect and opt for brands they perceive as better at any time.
Only
12 per cent of those interviewed remained firm loyalists to brands. The
research also found out that 45 per cent of local consumers loved
trying out new things.
According to the report,
shoppers are ready to try new products owing to brand trust, quality
assurance, experience, convenience, and for ethical reasons like the
manufacturer’s labour practices or environmental impact.
Interestingly,
the report also noted that 70 per cent of shoppers were price conscious
and 95 per cent noticed price changes, explaining why six out of 10
buyers were more influenced by promotions in stores.
The
findings indicate that experience and brand value continue to be great
influencers when consumers are making buying decisions.
“It
is important to understand the consumer nuances in Kenya when offering
products and services to them. Consumers are price conscious and are
looking for value but are willing to pay more for quality products, if
they see perceived value in it. It is not just a pricing game anymore,”
said Nielsen’s Consumer Insights Lead, East Africa Pauline Achayo.
“Factors
like convenience, availability, ease of shopping are some of the
parameters that consumers are using to make shopping decisions.
Marketers need to understand the different aspects that shape consumer
attitudes and that impact spend,” she said.
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