The closure of many of Nakumatt’s retail stores countrywide has disrupted the country’s core marketing channel for producers of every kind of consumer brand.
It has driven them to embrace alternative strategies to reach their target markets, and ensure they still reach critical mass in sales volumes, and maintain product loyalty, while the retail chain is in flux.
A relatively novel, but rising option for many brands globally, in situations where mainstream retail channels are not optimal, is pop up stores, which are temporary in different locations. According to Storefront, a company that provides short-term retail spaces for rent, pop up stores now generate $80 billion a year in sales revenues for their transient renters.
“The benefit of a pop-up store versus investing in a long-term physical retail space is that as the brand goes to where the customers are, it enables being able to select a certain side street matching your products with the personality of a given demographic and go to where they go,” reported Shopify, an e-commerce company.
“Additionally, what better way to create a buzz and generate brand awareness than by soliciting customers who never would have found your brand had it not been for a pop-up store.”
These kinds of stores also eliminate the risk of running out of stock, in a situation that most consumers had to deal with in Nakumatt stores in recent months.
Product unavailability in a supermarket has been shown to cost retailers and manufacturers losses and even brand loyalty. According to a case study conducted by consumer insight company, The Retail Feedback Group, out-of-stocks will lead 50 per cent of shoppers to go to a different store to purchase the item they needed; 38 per cent will forgo the product, 14 per cent will buy a different item at the store instead, and 12 per cent will buy a different brand and size.
To prevent this kind of consumer attrition, many companies are also now moving to selling their products from their own websites rather than relying on third party channels.
For Procter & Gamble, which deals with personal, family and household products, the disruption to its key marketing channels has seen it making stronger moves into e-commerce through its partnership last year with online retailer Jumia, and other online incentives.
“We have eliminated delivery charges for consumers that buy our diapers brand, Pampers, online,” said Irene Mwathi-Miheso, Procter and Gamble Communications Manager, East Africa.
Other producers have gone further still in leaping over the retail channel bridge. Global shoe company, Nike, for instance, announced last year that it would focus on direct to consumer channels through it website Nike.com and own retail stores, predicting that it would generate $16bn in sales from these channels by 2020 an increase from the $6.6bn it made in 2015.
According to a paper titled Going Direct by Kurt Salmon, a global management and strategy consulting firm, going direct gives manufactures a chance to gain control over how their brand is presented and interacts with consumers, from packaging and merchandising to marketing and the customer experience.
“Brands are seeing the advantages of carving their own path to sales and setting their own prices. Besides just growing sales, going direct puts brands closer to their consumers, which enables them to strengthen their overall brand image and test out new products and markets all while accessing an incredibly rich treasure trove of consumer data previously controlled by retailers,” reported the Kurt Salmon paper.
Producers in Kenya are also working to supply alternative retailers with greater volumes in areas where Nakumatt has closed shop.
“We continue to work closely with other existing retailers to ensure that our products are available in their outlets and for those getting extra footfall due to this, we are supporting them to ensure that they have enough stock to handle the customers,” said Mwathi.
- African Laughter