by Craig Page-Lee (@cpl_ignite) The opportunities for the retail sector are supposedly abundant, if not just to meet the ever-increasing levels of urbanisation and consumer demand in these growing economies. A vitally important component of retail’s success in Africa depends entirely upon the quality and capability of the supply chain servicing the continent’s retailers — whether to the formal or informal sector.
What is ever-apparent, though, is that the informal retailers servicing the majority of consumers on the continent have it a lot harder in getting product to store than their well-established, big-brand retailer competitors do
Deeper understanding
While we know that growth and innovation in the online retail space revolves very much around the development and evolution of logistics and the supply chain, we could possibly state that the success for the logistics-and-supply-chain companies actually revolves around a deeper understanding of the needs and challenges of the informal retailers, and not necessarily in respect of the service they provide for the larger, big-brand retailers.
I covered the topic of ‘online retail on the continent’ in a previous column and stated that a huge opportunity exists for informal retailers to establish an online loyalty relationship with their consumers through mobile. The development of a simple app that ‘connects’ consumers to their frequent and preferred informal retailers enables a number of benefits, the least being the ability to pre-order on-the-run and to make cashless payments. Imagine if such an app were able to interface with the logistics-and-supply-chain companies, which could then develop a deeper relationship with a large base of informal retailers in a predefined area?
Suddenly the challenge of stock management, understanding the demand for certain products, and gaining the benefit of cheaper-landed products (passing on discounts to the informal retailers through their collective higher volumes) become a reality. And, again, all paid for through mobile-banking gateways.
Opportunity
Another opportunity for the informal retailers — through establishing a loyalty relationship with their consumers — is to become an outlet for the dispensing of prescribed and recurring script medication. The information may again be shared with the logistics-and-supply-chain companies, and a database may be created to manage the delivery of such medication on days that the goods are delivered to the respective informal retailers’ collection points, or even to nearby established infrastructure, such as the Makro delivery lockers established at Sasol service stations around parts of South Africa.
There are probably a lot of risks with this model (including delivery of medication) but I’m sure that, with the correct level of research and consideration, leveraging off a single distribution drop, a number of core services may be fulfilled for the informal sector.
The power of understanding consumer behavior — in the informal sector — in accurate, real-time surely has to be a big objective of the consumer goods companies? When are we going to see the development of apps and other technologies between these groups and the logistics-and-supply-chain companies that add value not only to the informal retailers, but to the consumers as well?
Craig Page-Lee (@cpl_ignite) is the group managing director of Posterscope South Africa. He has over 21 years of working experience across the disciplines of architecture and retail design/brand communications and marketing management/advertising and media, across 11 pan-European and six pan-African regions. Craig’s monthly column on MarkLives, “Beyond Borders”, focuses on doing business in various African markets. Don’t forget to tune into his #eBizRetail slot on www.ebizradio.com.
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