E-commerce illustration. [Photo/Pinterest]
It is December again and everyone is getting into a spending mood. It comes almost natural to splash money mostly on personal stuff and leisure at this time of the year. This is the time retailers should be rejoicing by stocking up and throwing around enticing offers.
Yet most of our supermarkets are sulky and struggling. If one is not being hounded by debtors, another is closing a branch or having to deal with vicious suppliers. It is clearly not easy to be Nakumatt or Uchumi, which are a living irony in business: you have customers but not enough supplies for them.
Their better-off rivals such as Tuskys, arguably the market leader, and Naivas are having their not-so-minor troubles, which have led to branch closures. It is time retailers started rethinking the physical branch model. Retailers have been fighting to have the highest branch network in the market.
Now, those outlets have started eating their own parents. It tells you big is not always beautiful. What matters is efficiency in moving goods to customers at lower margins. The emergence and steady growth of online retailers have proved something that mainstream retailers have been ignoring to their own sorrow: Kenyans can shop – and shop big – on the internet.
Look at Jumia, Kilimall, and now Safaricom’s Masoko. There cannot be more proof of the huge online shopping community. If the cynics need more convincing, the entry of Safaricom into the digital marketplace signals a big opportunity for those who can create the right model.
Most successful international retailers such as Amazon and Alibaba have minted billions of dollars by moving goods across borders and within their markets to consumers at discount prices negotiated with manufacturers. While they charge the delivery fee, the price and convenience of shopping have been strong attractions.