Personal shopping businesses flourish in busy economy

Entrepreneurs are eyeing the personal shopping services sector which is emerging as a niche market, thriving on the disposable incomes of busy, high net worth individuals seeking convenience.

“Personal shopping business is a virgin market. Shopping for grocery and other home needs in supermarkets which involves standing in long queues can be crazy,” said Ms Aidah Gachanja, proprietor of HomeRun, the firm that pioneered the business model last year.

Ms Gachanja says the firm targets busy executives and anyone who would like to bypass the hustles of retail shopping, allowing them to spend their time doing other things.

Over the last one year, the personal errands market has attracted many as competitors seek ways to position themselves, a move that Ms Gachanja says will help spur creativity and focus on customer service.

“The element of trust is critical in this business. It has been our experience that of all the customers who get their precise shopping package delivered at the requested destination, 90 to 95 per cent return.”

According to Mr. Maina Kirugo, a marketing expert, the personal shopping market has a lot of growth potential, given the disposable incomes of the country’s middle and upper classes.

From a business perspective, he adds that players with a larger portfolio stand a better chance of earning higher revenues and winning more customers as they offer more services.

“Firms that can offer a wider variety of shopping services can boost their appeal further,” he said.

The reluctance of established retail stores to offer the these services due to what analysts attribute to high overhead costs has paved way from small entrepreneurs to tap into this market.

Apart from delivery of expensive home appliances and furniture, retail firms do not engage in general delivery of goods, either as a business or a value-added customer service.

Uchumi Supermarkets, however, has been trying its hands on a model that incorporates an online shopping website where customers place their orders and the selected goods are delivered by an independent firm that charges a percentage of the total value of the shopping.

The first online portal, dubbed Okoa Masaa, flagged and recently the retail firm re-launched the model, partnering with HomeRun to diversify its sales options.

Ms Gachanja told Business Daily that the partnership with Uchumi will lend HomeRun the necessary hand of credibility offered by the retail brand.

“More Kenyans are using the Internet and the consumer market is becoming more sophisticated. However, most consumers are still cautious about these new services and would like to test them more.”

Flat rate

Under the partnership, customers can place orders via phone calls or HomeRun’s web page.

The firm delivers the goods and accepts payments either in cash or through mobile money services.

For the delivery service, consumers pay 10 per cent of the shopping value for goods over Sh4,000.

For goods below that amount, a flat rate of Sh400 is charged.

While analysts say that the delivery firms could benefit from partnerships with more retail and service firms, they also say some retail firms are scared of losing out on impulse shopping.

For instance, people who shop directly are prone to add more items to their shopping carts than would be the case if the shopping is done buy a professional under instructions.

The personal shopping service is part of a wider personal errands market that analysts say has emerged as a result of increased disposable incomes and changing lifestyles that has made more people willing to pay for convenience for life’s daily needs.