Challenges facing brick and mortar retailers

Posted on September 6, 2015 12:00 am

In a new report that your blogger has obtained about trends of shopping in Sub Saharan Africa reveal a changing face of traditional bricks and mortar retail stores across the region.Plenty of African retail operators are taking a fresh look at their physical footprint, which is often one of their biggest assets. This is a major consideration for the retail industry, which is facing increasing pressure from competitors and consumers who want a seamless shopping experience from the store to online and pay with their mobile wallet platforms like M-Pesa.In Kenya, larger retailers are looking at how they can reconfigure their physical space to better deal with multiple sales channels. Take the case of popular supermarket chain, Nakumatt, which as of 2014 was worth USD$1. billion and had more than 30 stores in four countries of Rwanda, Kenya, Uganda and Tanzania. With such a powerful network of stores, Nakumatt several months back announced that it was looking at new ways to maximise both its physical footprint and digital opportunities through mobile payment apps. Nakumatt customers could order online and pick up in-store, as well as benefit from online loyalty programmes. This was just one example of an African indigenous retail chain realising it needed to move away from the traditional retail store to integrate with new technologies and the connected world.

Many more retailers, including those across Southern and Western Africa countries are looking for more economical, environmentally sustainable and sound ways to improve the quality and accessibility of their business while rethinking or reducing their precious real estate. The approach varies from one retailer to the next and for many it might mean more emphasis on franchising, reducing the current space footprint to eliminate overheads or outsourcing some of their services such as banking, bill payment to partner businesses that have a larger network of stores. With today’s technologies and African brick and mortar retailers are facing enormous challenges that few would have thought of just ten years ago. Retailers taking a fresh approach would see most of this infrastructure reduced to a single handheld device or a combination of two to three small devices that would take up a fraction of the space outlined above. Incorporating many of today’s solutions, this footprint could be shifted into a vertical space with wall mounted or handheld technology, instead of consuming precious floor or counter space.

In Kampala and Lusaka, Uganda and Zambia capital cities respectively, I have observed that many if not all legacy functions that once required several separate components and frequent manual transcription of data between disconnected systems are being accomplished in a single easy to learn workflow.A user equipped with a handheld computer, a small desktop or mobile printer with a payment attachment in Kampala or lusaka could replace virtually every other piece of equipment in the retail counter. While traditional physical retail stores in Africa have evolved from operating as the singular point of interaction with customers to being one of many options, including mobile-commerce, they expect to be offered by customers. This new strategic approach,with the introduction of more versatile and space efficient technologies, has the potential to enable much of the current physical space taken up by traditional retail stores to be turned back into productive and more profitable retail spaces or even converted to residential houses.Such a move would also allow potential conversations with floor space-sensitive franchise locations to function far more smoothly.

Contador Harrison