What is Ailing our Retailers?

By July 4, 2017 March 19th, 2019 Evolve Insights

As it appeared in the Daily Nation on July 7th, 2017
I have had keen interest in retail for two reasons. First, I have previously worked in the retail sector, second, and more importantly because the retail sector has the largest number of customer interactions. Every day, millions of customer interactions take place in all kinds of retail stores. Because of these many interactions, the relationship between customers and retailers can be easily solidified or shattered. Retailers that sell groceries especially have the highest number of interactions per customer. Many such retailers experience high loyalty levels. We all have that one favorite store from where we purchase most of our groceries.

In the last ten years, we have witnessed massive growth in the retail sector. Locally, new players have come into the retail space, existing retailers have expanded their store network, and online stores are taking root. Unfortunately, during the same period, we have also witnessed the regression of some of our largest retail brands locally. Many consumers have shifted from their one time favorite grocery store because the shelves are empty. Globally, the retail sector continues to evolve. In the USA for example, the retail space is still growing. This is despite many retailers going through shaky moments and hundreds having filed for bankruptcy. One-time leading retailers such as K-mart and Sears are only but memories. The decline of some of the traditional stores in the USA has partly been attributed to their slow adoption to changing consumer need. In Kenya, online shopping is yet to shake up traditional retail stores. What then is ailing our retailers?

We have all come across media reports alluding to the misdoings of leading local retailers both at present and in the past. The issues have been wide-ranging from gaps in corporate governance to collusion and pilferage by staff. Besides these reasons, I feel that our retailers are also ailing from lack of innovation. I believe our one time leading retailers have not done enough to remain on the innovative edge. Innovation needs to go beyond introduction of own brands or provision of ready to eat food or loyalty programs. Our retailers need to focus more on making the overall customer shopping experience worthwhile.

Retailers need to spend more time seeking to understand their customers. What they like and what they detest. The focus on the customer should be at the center of both operational and strategic decisions. I am yet to come across a local retailer who is truly obsessed with customers. Retailers need to consistently look out for creative ways to create a loyal customer base. Creating loyal customers needs to go beyond the ability to accumulate and redeem loyalty points. It needs to go beyond provision of own brands. It is about meeting the customers’ basic needs. Retailers have access to mountains of customer data that can be analyzed to guide decision-making. Why do our stores stock brands that customers do not even know? Why are some of our favorite brands missing on the shelves at Uchumi and Nakumatt? Do our retailers really care when we fail to find what we are looking for? Our one-time leading retailers have to put great effort to win back past customers.

In addition to customer focus, employee relations and supplier relations are also critical rudiments in the retail sector. Since the margins in retail are often meagre, to survive, our retailers must run highly efficient operations in the most innovative way.

Lucy Kiruthu is a Management Consultant and Trainer. Connect via twitter @KiruthuLucy