RETAIL BUSINESS INTELLIGENCE
Its growth in Kenyan retail stores
HOTDOG MACHINES PRESSURE FRYERS DISPLAYS F FRYERS C O COOKERS GRIDDLES GRI BU BURNERS
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Contents INSIGHT RETAIL | Q4 2012
Where quality and service reigns Delicatessen
Playing the top league
18 19 20
The History of Weighing
Powerful insights into your consumer goods markets
Quality, variety and value
Project Directorâ€™s note
Customer Loyalty Programs
Retail & Restaurant Point of Sale Systems
Specialized Retail Training Authenticity, Health, Quality add to success of ready meals
RETAIL BUSINESS INTELLIGENCE
Its growth in Kenyan retail stores
Special Projects Editor Strategic Associates
Contributors Various Design
Publisher Retail Interchange Center Limited Printer Colourprint Limited Photos: Some from: stock.xchng © 2012 Insight Retail All material is strictly copyright and all rights were reserved. Reproduction in whole or in part without the written permission of Insight Retail is strictly forbidden. The greatest care has been taken to ensure the accuracy of information in this magazine at the time of going to press, but we accept no responsibility for omissions or errors.The views expressed in the magazine are not necessarily those of Insight Retail or Retail Interchange Centre.
Project Director’s Note
t is with great pleasure that I introduce to you the maiden issue of Insight Retail Magazine- a quarterly publication for the retail industry highlighting on news and other related trends and developments, locally and globally.
While conceiving the idea, the focus was on filling in on the existing information gaps between the retail industry and its stakeholders while giving all parties a regional platform whose aim is to showcase and communicate on the various industry products & services through the magazine as well as other media such as forums and seminars with a focus on the in-depth of the retail industry. Insight Retail Magazine will be distributed to all retail outlets and other related stakeholders countrywide and thereafter expand its distribution channels into the region targeting all existing and upcoming retail outlets; large or small and their stakeholders. The Magazine’s Online Edition will also be available on our website www.insightretails.com. We believe that the Magazine will be useful to your organization in one way or the other to enable you strategize and grow your business in coming years. I would like to extend our gratitude to all those who through their tireless efforts have made the project a success, Insight Retail staff, consulting partners, our clients and all the organizations that have supported and contributed in ensuring that this maiden issue is a success. Finally, as we pursue to improve on the magazine and make it relevant to our readers’ needs, we welcome feedback from you on firstname.lastname@example.org Happy reading and thank you!
Titus Korir Project Director.
Retail Interchange Centre Ltd P.O. Box 36106 City Square 00200 Nairobi Kenya Tel: +254 725 350 690 / 0735 350 690 email: email@example.com www. insightretails.com
INSIGHT RETAIL | Q4 2012
A U T O M AT I O N
bout a decade ago, the development and penetration of information technology (IT) among local businesses was considered minimal. While the IT wave was fast sweeping and settling among businessesin the developed world transforming how operations were ran, back home, businesses were still hooked up into what currently can deemed as ‘traditional’. The computer, one of the basic ingredients in IT development was rarely found among local businesses. Then, business operations included hand-written receipts coupled with a variety of manual processes such as balancing of books at the end of each business day and stock-taking, thereby reducing the chances of making profits. Thanks to automation of business processes, large and small local companies are now able to realize results effectively and efficiently. Today, businessmen have become aware that investing in solutions such as enterprise resource planning (ERP) able to integrate internal and external management information across an entire organization, going fiscal through the use of Electronic Tax Registers (ETRs) machines; a requirement for all businesses in Kenya by the Kenya Revenue Authority (KRA) or even investing in automated point of sale (POS) solutions are among the IT solutions that keep businesses on the competitive edge. For instance, a business operating without an Internet connection or those in the retail sector operating without a POS solution can easily be deemed as not ‘serious’. In this modern characterized with fast changing business dynamics, a retailer whose inventory does not match his tallies, sales go unrecorded coupled with staff spending far too much time chasing mistakes instead of tending to customers is an alarm that something is seriously wrong in the business calling for one to step out of cash registers and move toPoint of Sale Systems (POS). Step towards POS Automating one’s store or restaurant with a POS system provides a business person with great benefits.This is because POS software will record each sale done achieving up-to-date inventory records. Secondly, a POS system provides one with great amount of data than can be retrieved to analyze customer purchase history, inventory analysis, trend/movement reports, item sales detail, stock status reports, monthly, yearly, and seasonal sales data and much more. This data is vital in grasping total control of your business and increasing sales and profits. In addition to enhancing customer and inventory tracking capabilities, computerizing one’s store can also help tighten up on security and employee tracking. Some of the benefits gained by automating one’s store include; • Reducing costly inventory overheads, better buying decisions • Saving time and speed up on checkout lines through improving pricing accuracy by integrating bar-code scanners and credit card authorization ability with the POS system.
Retail & Restaurant Point of Sale Systems
POS provides one with great amount of data than can be retrieved to analyze customer purchase history, inventory analysis, trend/movement reports, item sales detail, stock status reports, monthly, yearly, and seasonal sales data and much more
• Running promotions becomes a click of a button leading to increased traffic in one’s store • Help in tracking and controlling one’s store even if you are not physically available with use of remote logins. • Increase customer service levels • Use the system-generated customer information to process direct marketing campaigns • Reduce the time spent on Back Office and Inventory functions • Automated VAT calculations Incorporated five years ago with the goal of providing high value and cost-effective business plans and other business development services, Insync Solution Limited is a one stop shop for all your needs from POS software, CCTV Security and Anti Theft Shrink management. The company which traces its roots from Nairobi proudly operates in the East African region maintaining the same dedication to help business owners successfully achieve their goals.
Partnership with Ashut Engineering 17” Touch screen Computer with original Windows 7 PRO, cash drawer Receipt printer, Biometric login device, Software for Restaurant system Dine IN, Delivery, Take away, Multi-user, Food Costing, User rights, Biometric logins, Multiple payments ( cash, cheque, credit card etc), Reports e.g. (Sales, End of day, Bill details, VAT/CAT reports, KOT Reports, VOIDs, Bill Delete etc.), Multiple KOTS, Multiple Printers (Kitchen, Bar, Barbeque, Receipt etc). Table Management & much more Author: Dinesh Jain, CEO Insync Solutions Limited Email: firstname.lastname@example.org
INSIGHT RETAIL | Q4 2012
End - to - End Retail Technology Solutions Point of Sale Anti-theft Solutions
Loyalty Inventory & Warehouse Suitable for all retail verticals
O d m
Tel : +254-20-374-7060 | Fax : +254-20-374-7280 | Website : www.CompuLynx.org | Email : email@example.com
Nairobi | Mombasa | Kisumu | Kampala | Dar-es-salaam
A U T O M AT I O N
Customer Loyalty Programs Do they add value?
TEXT: Sailesh Savani
n todayâ€™s business world, customer loyalty has become a buzz. Though debatable, customer loyalty remains one of the key pillars in driving successful businesses. Let us, for a moment, go back even to the ages of barter trade, way before currencies came into existence, when traders conducted businesses amongst themselves through the exchange of goods and services. Then, there were innumerable cases of repeat â€œtransactionsâ€? amongst traders, where trader â€œAâ€? was more â€œloyalâ€? to a certain trader â€œBâ€? and would only prefer doing business with him. This was a clear demonstration of customer loyalty. There was something that trader â€œBâ€? was continually doing to earn the loyalty of trader â€œAâ€?. Although there may not have been a modern or scientific method of earning such loyalty, but the expected end result was the same; to earn the loyalty of trader â€œAâ€? by way of continued business relationship and transaction. It is clearly shows that trader â€œAâ€? applied customer retention techniques without too many words. Back to todayâ€™s world characterized by an extremely well informed and ever demanding customer, fierce competitive landscape in all spheres of life and a continual war amongst businesses to take a share of their customersâ€™ spending through their businesses, customer retention and loyalty contributes to a large portion of any business strategy. Businesses are investing heavily in new ways and methods of continually engaging with their customers with a view to creating â€œcustomers for lifeâ€?. Globally, in the retail context, retailers are engaging with their customers through their various customer loyalty programs, meant to keep the customer â€œlockedâ€? to a particular retailer by way of repeat and more frequent purchases and higher spend with the retailer. Simply put, loyalty programs are a way for the retailer to encourage the continued patronage of customers. They will also allow retailers to gather data on customer behavior in order to decipher trends, appropriately reward loyalty, and influence shopping behavior. A well thought thorough and executed loyalty program enables retailers to transform their relationship with their customers. It requires shift of thinking from tactical to strategic engagement with customers. While one must look at every transaction to the smallest detail, the end goal is to strategically engage with customers to create a lifelong bond.
Among the pioneer retailers who courageously plunged into the retail customer loyalty programs is Tesco UK through their Club Card loyalty program way back in 1995, a time when the only other known loyalty programs were being run by airlines. While many retail customer loyalty programs in the world have delivered humongous value to both retailers and customers alike, there are several cases of programs that have failed miserably and have ended up either being an expenditure item on their P&L or a liability item on the balance sheet of retailers. Causes of such failures are multi-fold, the most common being that some of the programs are not thought through in terms of the objectives, target audience, expected short term, medium term and long term results. In addition, there is bound to be failure when the loyalty programs are viewed as a quick revenue earner initiative, which is not necessarily the case. As a matter of fact, most loyalty programs have a medium to long term return on investment (ROI) and may result to some quick gains in terms of increased revenues due to the retail offers associated with the initial program sign up. However, if there are no visible immediate benefits, it does not necessarily mean that the program has failed. The Kenyan retail space has witnessed several loyalty programs launched by virtually every medium sized to large retailer. Nakumatt Supermarket chain was the first retailer to launch its program known as the Smart Card loyalty program in 2001. Other retailers in the country soon followed suit. Today, almost every local retailer runs a loyalty program. Most retailers have seen benefits out of their programs by way of increased revenue and repeat purchases from existing and new customers. Loyalty programs are customer retention and acquisition tools, most loyalty programs would mine extremely valuable customer behaviour and buying patterns data which can be used for focussed and targeted marketing. Critics have argued that loyalty programs infringe on customer data protection and privacy. It must be appreciated that retailers who run loyalty programs are not interested in the privacy or confidential information of their customers. On the contrary, they would go out of their way to protect customer confidentiality
and privacy and would only use customer buying pattern and behaviour data to make lucrative offers to customers that in turn benefit both the customer and the retailer. The next big thing in loyalty programs is coalition of loyalty programs where noncompeting brands come together and run a common loyalty program with the intention of leveraging on each otherâ€™sâ€™ brands and tapping into their existing loyal customer base while giving each of them an opportunity to cross sell to each otherâ€™sâ€™ customers. This is expected to create great value for all; customers, retailers and brand owners. Finally, well thought through and articulated loyalty programs, positioned and marketed well, work in the interest of both the program owner(s) as well as the customers. Failed loyalty programs are a result of insufficient thinking and planning and should not deter other retailers and service providers from embarking on their own loyalty programs or becoming part of a coalition program.
INSIGHT RETAIL | Q4 2012
Loyalty programs are a way for the retailer to encourage the continued patronage of customers.
The Author has been part of building the growing most successful loyalty programs in Kenya, including the Nakumatt & Ukwala Supermarket Loyalty Programs Sailesh Savani, CEO & Founder, Compulynx Limited. Email: firstname.lastname@example.org
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DELI - NAIVAS CASE STUDY
Playing the top league
or a long time, shopping malls were located either along major busy highways or within the city center taking advantage of the never ending human traffic. However, this trend has fast been changing as expansive business centers looking to house businesses such as the larger and more popular chain of supermarkets as their anchor tenants’ mushroom within various residential areas. In the recent times, factors such as a congested city, the need to bring services “closer” home have seen businesses such as supermarkets and commercials banks take their services closer to their clients. Among the chain of supermarkets that have taken advantage of the trend as businesses move closer to various residential areas is Naivas Limited; which has also been turning heads as it emerges as a major player in the fiercely competitive Kenyan retail business. Currently, Naivas operates 21 branches countrywide. Early this year, the supermarket opened its largest retail outlet sitting on over 90,000 square feet in Mombasa, Nyali. Other branches include Eldoret (2), Naivasha (2), Nakuru, Kitengela, Kisii, Kitui, Narok, Thika, Ngong, Embu and Nairobi (8) towns.
First pioneered at Naivas Ruaraka branch as a pilot project but which Mr. Kimani categorically declares has never disappointed. Naivas’ deli service is currently available in ten branches so far. Here, shoppers can enjoy a meal or even purchase fresh snacks. In some of the larger new outlets; Kitengela and Nyali, Naivas has introduced Café Naivas, where shoppers and other walk in clients have a chance to do their meals comfortably or meet and chat over the same. There is also fresh fruit juice, freshly brewed coffee, tea as well as milk. “Our aim to have “proper” coffee shops, a pace that has been set by the Machakos, Nyali and Nakuru branches,” he quips. Mr. Kimani notes that the deli concept is a value addition service that is proving to be quite popular among its shoppers and in turn profitable for the company. “Today, shoppers want a variety the minute they step into a supermarket. They (shoppers) want fresh food, bread and vegetables, which is all available at Naivas,” he adds. Though space could be a limiting factor to roll out such services, Mr. Kimani says Naivas is looking at its shoppers’ needs with plans to tag along more services such as butcheries and laundries.
Service diversification The supermarket chain continues to intensify its battle for consumers’ wallets among residential areas giving its customers that one stop shop convenience and experience coupled with proximity and it is not about to stop anytime. Its newer branches have embraced a ready-to-eat meals’ concept as well as bakeries offering a wide variety of bread and other snacks, bottled water services, fresh fruits and vegetables’ section. According to Willy Kimani, Naivas Marketing and Business Development Manager, the ready-to-eat food concept has fast taken shape in a market where the preparation of meals continues to become a challenge due to people’s busy schedules while some argue that it is cheaper to get ready food as opposed to cooking. Naivas employs the highest levels of standards when it comes to preparation of the meals and incorporating the company’s enterprise resource planning (ERP) system to achieve optimal cooking.
At the customer’s forefront Naivas continues to thrive under its slogan ‘Saves you Money’, which has given its customers goodwill that the supermarket is concerned about the customers’ pocket as Kenyans embrace and try to adjust to the hard economic times. Late last year, Naivas unveiled the new look of affordable shopping. Other than low prices, the company’s other pillars include service, variety and freshness. Naivas also runs a loyalty scheme known as the Naivas Reward Card for its customers. Once registered to the loyalty program, earning points starts immediately you get the card. One point is earned for every Ksh.100. The Naivas points may be redeemed for rewards on free shopping and vouchers at any Naivas branch countrywide. Experts in the telecommunications industry have taunted M-Commerce as the next stage of revolutionizing the various areas of commerce. Naivas has also partnered with Safaricom’s M-PESA under a service called ‘M-PESA Buy Goods’.
INSIGHT RETAIL | Q4 2012
Mr. Kimani notes that the deli concept is a value addition service that is proving to be quite popular among its shoppers and in turn profitable for the company This means that Naivas shoppers are able to pay for their goods at Naivas using the M-PESA service. The service is the first of its kind in the regional market and can be enjoyed by over 12.7 million M-PESA subscribers. According to Safaricom, the mobile telecommunications company continues leading the way towards a mobile wallet and cashless society where all payments will be made online reducing the risks involved in carrying cash. He noted that the effort by Safaricom and partners was aimed at deepening online and cash-less payment solution in Kenya and also a first in the region. Pioneers Naivas has yet established another first in this competitive industry. The Naivas Online shop; www.naivas.co.ke is the perfect example of convenience at the touch of a button anywhere and everywhere. The provision of this service brings out the sense of maturity and the pride that goes along with marketing our African heritage. By demonstrating leadership skills in this innovation, it can only be expected that the other players will borrow a leaf from the Naivas team.
y ll d
The History of Weighing
Some of the remarkable historical steps of weighing machines
very human being on the planet is affected by weights and measures in some way. From the moment one is born and throughout his daily lives, weighing and measuring are an important and often vital part of manâ€™s existence. Our bodies, the food we eat and all the products we use as an integral part of modern living have all been weighed and measured at some stage in their development. Weights and measures are undoubtedly one of manâ€™s greatest and most important inventions, ranking alongside the wheel in the evolution of civilization. Commerce would not have progressed beyond the barter system without the invention of a system of weights and measures. From Seed to Electronics At the height of Egyptian civilization, the weights used were fashioned from bronze and often cast in the shape of animals, some in the shape of a cow, an ancient standard of value. The concept of making weights in the shape of animals and other decorative designs was practiced in Africa, India and the Far East using brass. Many other materials were used throughout the ages, including porcelain and pottery. However, the first weights were not fashioned by man but by nature. In order to weigh small amounts precisely, small objects that were easily obtained and of a consistent size were needed. So the grains and seeds of plants were chosen for their elegant uniformity. A grain of wheat became the grain of weight. Mustard seeds were used to weigh gold in India. The seeds of the liquorice plant and of the carob tree were also used. The carob gave carats, still used today to express the value of gold and diamonds, although it is now a metric carat. The weights of seeds were eventually transformed into stone equivalents for the weighing of general goods, but other materials such
INSIGHT RETAIL | Q4 2012
as lead were used as well. Haematite or nephrite was reserved for weighing precious materials like gold. ... To Kilogrammes When France had her revolution in 1789, the ensuing explosion of new thinking led to the development of revolutionary new system of measurement in which all the different physical properties were linked by interrelated units - the metric system. The master kilogramme, made from platinum, resides in Paris, whilst faithful copies, or witnesses, are held in major cities around the world, ensuring that a kilogramme weighs exactly the same from Kilmarnock to Karachi.
Commerce would not have progressed beyond the barter system without the invention of a system of weights and measures.
First Weighing Apparatus The first weighing machine was probably derived from the yoke, which discovered that two equal masses would balance if they were suspended from a beam that was supported at its center. Balances were in use in Mesopotamia as early as 4000 years BC. They consisted of straight pieces of wood suspended by a cord passing through the center. Holes, pierced in the ends of the beam, carried cords suspending the scale pans. The accuracy of the beam scale, or balance, relies on ensuring that the distance from the fulcrum to each end of the beam is exactly equal. The holes were difficult to locate precisely and the cords moved about in the holes, so affecting accuracy. The Genius Leonardo Da Vinci (1452 - 1519), one of the most remarkable men of time, designed the first recorded self-indicating scale. He produced two designs, one with a triangular chart, and the other semi-circular, but both worked on the same principle. The object to be weighed is placed in a suspended pan. The chart acts as a pendulum and
finds a new position of balance. The weight is shown on the chart by a plum bob crossing its face. Like many of Leonardoâ€™s conceptions, this scale was ahead of its time was not manufactured until three hundred years after his death. New Opportunities The origins of the present postal system whereby weight would determine the cost of postage, provided yet another commercial opportunity for scale makers to exploit, and large numbers of scales were produced. Coin-operated equipment began to appear towards the end of the 19th century and was operated by the weight and size of coin. Apart from person being weighed, it included money exchange machines, chocolate and cigarette dispensers. Towards the end of the 19th century, the technology of weighing machines began to develop into the type of machines recognized today. Inventors began to consider designing scales that would indicate the value of goods, as well as the weight. Indicating Scales One of the first price-indicating scales to be manufactured commercially appeared in America in 1897. Based on a steelyard supporting a weighing platform, its computer consisted of a flat rectangular chart attached to the steelyard.
A weighed cursor, graduated vertically into prices per pound, was slid along the steelyard and the price of the goods could be read off the chart at the point where a balance was achieved. Unfortunately it was very slow to use. In the late part of the 19th century the development of accurate self-indicating scales for industry revolutionized the weighing process, which gave an almost instant indication of the weight of goods. Pendulums were applied to the Roberval and Beranger designs. Yet another innovation, the Avery Dial recorder fitted to industrial weighing machines, printed a fraudproof record of all goods weighed on the scale. The printed tickets also had the advantage of being much easier to read than hand-written notes. Electronics Take Over From the late 1940s mechanical weighing began to combine with electronics. But it was not until the device called a load cell was invented that complex and bulky lever systems and knife-edges were replaced. Load cells, or transducers, now lie at the heart of every electronic machine. Precision load cells convert weight into electronic signals, and are manufactured for a wide range of products, from a sensitive and delicate scientific balance to a weighbridge for a train. Each load cell
contains thin, metal foil electrical resistors, known as strain gauges. When a load is applied, the strain gauge is compressed, changing its electrical resistance, and thereby changing its electrical resistance, and thereby changing the output signal in proportion to the weight put on it. From the cellâ€™s electronics, weight information together with other data, such as calibration, are fed via an analogue-to-digital converter to a microchip with the software implanted into it. This processes all of the calculations, descriptions and other information which is then digitally displayed or printed out. Todayâ€™s modern electronic machines are manufactured to weigh in kilogrammes, or pounds, but they must still conform to the weights and measures regulations of the countries to which they are exported.
DELI - LEMOC LIMITED CASE STUDY
Quality, variety and value R co co p be
emoc Limited is a food company that mainly deals in fresh meat products, cheeses, salamis and hams. Currently supplying its products in most of the Nakumatt Supermarket outlets, the company which has been around since 2003 continues to take pride as an outstanding supplier of quality meat and deli products in the region. Lemoc Limited is founded on the three main pillars; Variety: Lemoc Limited ensures that customers have a wide variety of products to choose from to satisfy their needs. Quality: The Company does not compromise on the quality of products supplied to its outlets. This is achieved through its competent quality assurance team that works round the clock to make this happen. Value: At Lemoc, we ensure that customers always get the exact value, if not more, for his / her money. Our high quality products remain very affordable. Service: As much as we can have all the best products to offer, we believe in offering memorable service to our esteemed customers through our well trained personnel at the counter and shelf level who remain Lemoc’s ambassadors. The service pillar is divided into various sections. The Meatery This section deals with fresh meat products such as fresh meat cuts, sausages, burgers, meatballs, among others. It retails its products in Nakumatt Supermarkets that trade under the same brand name. Naku Deli Naku Deli deals with various types of cheeses; locally manufactured as well imported cheese products from Europe and Tanzania). Other products include salamis and hams. The Meatery and Deli products are sold over the counter as a customer is able to get the cut he wants of whatever weight.
INSIGHT RETAIL | Q4 2012
Lemoc Limited is founded on three main pillars; Variety, Quality & Value
The Prepack This section packs products from both Meatery and Deli and supplies them in the Nakumatt outlets. These are shelf products that have standard weight. Lemoc Limited remains the pioneer in packing its products using modified atmosphere in Kenya. This is meant to maintain the original product’s taste, texture and color without adding any additives. Quality Assurance (QA) This ensures that planned and systematic activities of the quality system are implemented so that quality requirements for a product or service will be fulfilled. This section dwells on two principles: • “Fit for purpose”, the product should be suitable for the intended purpose and, • “Right first time”, mistakes should be eliminated. QA includes management of the quality of raw materials, assemblies, products and components, services related to production, and management, production and inspection processes ensuring that customers get only the best product. Office This is the brain of the company where all planning, strategy and decision making is done. All communication is centralized to ensure easy follow up of all processes. Lemoc Limited believes in the power and importance of human resource. It ensures that all her employees are provided by all the necessary tools, equipment, facility and environment for a comfortable service delivery. Lemoc believes in employee motivation, good employer – employee relationship and effective communication channels. Through this, we are able to notice any challenges and solve them as soon as possible. Our key customers are the locals, who have for a long time before, starved for better quality products that Lemoc has proudly resolved with pleasure. Finally, we believe, business is not all about money, but customer satisfaction able to earn customers’ loyalty.
NEWEST TECHNOLOGY IN THE REFRIGERATOR MARKET! Refrigerators are a necessity. However it is always a trend in the market that price is the first factor considered. Yet when the consumer has more information it can change their mind-set- From price consciousness to more awareness on features and new technology resulting in many more benefits present and long term. It may cost a few extra bucks in the present but over the years that amount will be seen as a return on investment.
The Latest trends in Technology: This is the cooling system that equalizes freshness throughout the whole refrigerator even. At the door basket area, by supplying cool air from the front and rear of the refrigerator unlike in conventional cooling where air comes only from the rear making food colder while food in the front is tepid. LG cares for your health. By using extracts from the green tea leaf, the new cooling system prevents mold and unpleasant odors. The filtered air is then combined with ions, which creates a lasting natural freshness inside your refrigerator.
Customer benefit - Reduced Bacteria, Reduced Fungus, Better Odor.
This is only found in LG fridge’s vegetable-bin cover. It’s a grid patterned cover that condenses extra humidity between the grid patterns and evaporates moisture, allowing foods to maintain freshness longer. This is a control mechanism only found in LG refrigerators to control excess moisture thus helping foods stored in the vegetable - bin to retain just the right amount of moisture. Customer benefit - Increased lifespan of fruits/vegetables, Fresher taste, Texture maintenance.
LG fridges have gaskets made of organic anti-bacterial materials that prevent production (proliferation) of mould thus protecting them from distortion and decay due to wetness hence ensuring a bacteria free storage. This technology ensures that your fridge’s gasket retains its original form.
Customer benefit - Increased Refrigerator life span.
The hygiene of the food that we eat is the first concern than any other hygiene care. It is more important than the hygiene of the clothes we wear and more important than the hygiene of the air we breathe. The food that we eat goes directly into our body and it is the factor that is most related to our health in relation to food consumption hence the introduction of the world’s first hygiene filter in a Refrigerator:
DELI - COVER STORY
Nairobi Kitchen Where quality and T
he National Economic Survey continues to identify the retail and wholesale trade as among the key growth drivers of Kenya’s economy. At the same time, Vision 2030, the country’s economic blueprint envisages wholesaling and retailing as one of the key sectors that will drive economic growth. According to economic analysts, this sector rides on the supermarket model, which will enable successful firms to replicate themselves not just in Kenya and East Africa, but globally. Generally, supermarkets are a logical growth of the kiosk, where one buys what he wants over the counter but at the same time provides one with a wide choice espousing freedom, economies of scale, steeper learning curve and economic growth. Gone are the days when supermarket shopping was considered a preserve of the rich. In fact, today supermarkets have evolved from just a place where one selects goods and in some cases services, pays for them and then take them home in polythene bags. The modern day supermarket has evolved from just stocking and displaying a variety of mainly household goods to a one-stop entity where customers can purchase fresh fruits and vegetables, meat, or grab some fresh baked bread, confectionaries or snacks and for those seeking to avoid the hassles of cooking their own food, then the solution lies there thanks to ready-
INSIGHT RETAIL | Q4 2012
made food. Simply put, the supermarket will have a bakery, butchery and ready to eat food at times coupled with a sitting area. Here, various forms of bread, meat and food menus are on display leaving the customer spoilt for choice. To many customers, the one stop shop concept within a supermarket has enormously reduced the numerous errands that people will want to avoid to save on time. For people who find the preparation of meals at home cumbersome due to their busy schedules as well as those who believe that it is cheaper to get ready food as opposed to cooking, the ready-to-eat food at the supermarket has tremendously worked for them. But even with such changes in the retail scene, the ability for the supermarkets to prepare and attractively display fresh bread, food or meat and even store the same under the required conditions cannot be achieved without proper equipment. For the above to be achieved, Nairobi Kitchen Care Limited remains the supermarkets’ one stop provider for such equipment. “We pride ourselves as being the supermarkets’ specialists,” explains Mr. Amit Aggarwal, the company’s manager. Nairobi Kitchen Care Limited which spans 45 years ago offers supermarket chains eager to set up bakeries, butcheries and ready food
We pride ourselves as being the supermarkets’ specialists. Our range of products is endless...large ovens, burner stoves, ice makers, dough mixers... Mr. Amit, Manager, Nairobi Kitchen Care Limited
en Care Limited: and service reigns ves
ts e ers,
a complete set up equipment for all these services and more. At the company’s main office located along Mombasa Road, clients will find a wide array of equipment for deli, bakery, butchery, grilling and display. The company also stocks a variety of equipment used in hotels and restaurants; an area which has also evolved to include coffee and tea shops as well as ice cream parlors. “Our range of products is endless…these include large ovens, burner stoves, ice makers, dough mixers, chicken rotisseries, meat mincers, manual bone saws under-counters and potato cutters,” he adds. To further complete the solution, clients are also able to purchase smaller tools which accompany such equipment. These include coffee makers, tea urns, kettles, pans, knives and chopping boards. Great service, complete solution Nairobi Kitchen Care Limited endures to stock all equipment that clients such as supermarkets require in these new areas of diversification even though the company does not do any pre-orders. Other than quality, Mr. Amit notes that offering great service is their second main focus. “It is no doubt that every single machine is bound to experience a downtime,” he explains. The company which sources the equipment from Europe and Far East admits that it ensures that every new line of equipment comes with spare parts. Nairobi Kitchen Care
Limited stocks a wide range of spare parts for all equipment sold ensuring that clients are spared the troublesome process of replacing the worn parts. In addition, the company boasts of technicians able to carry out the job as expected to ensure that the equipment is up and running. This has greatly boosted their business portfolio. To further stamp its authority as a supermarkets’ specialist, the company plans to introduce a special kind of shelving characterized by durability. “Tego, the shelving brand is regarded as one that is of high quality as it does not scratch easily. We will also be able to design the shelving for our clients and especially those new in the retail business,” Mr. Amit reveals. Other than the Mombasa road office, Nairobi Kitchen Care Limited operates branches in Nairobi city center, Mombasa town and Uganda however through distributorship mainly serving clients under the hospitality portfolio. Even though demand for products and services remains enormous locally, Mr. Amit notes that the same is fast catching up with the region. The one-stop shop supermarket concept is fast spreading its wings in Uganda and Tanzania. “However, servicing equipment in countries such as Rwanda can be quite a challenge,” Mr. Amit quips. Mr. Amit welcomes financial institutions willing to partner with Nairobi Kitchen Care
Limited to offer asset based financing solutions especially targeted for small but upcoming supermarkets who may find it difficult to purchase some of the equipment. At the same time, the company has basic starter packages for those starting their businesses but require the equipment.
INSIGHT RETAIL | Q4 2012
DELI - ORIGIN
“Deli” concept across the globe
he term delicatessen meaning “delicacies” or “fine foods” is an English term which originally exclusively referred to specially prepared food. With time, the store where this food was sold came to be known as delicatessen as the new meaning for the word was eventually shortened to deli. In Europe, the history of deli food and the delicatessen store concept has its origins in Germany. Munich’s Dallmayr listed as one of the oldest delicatessen dates back to the 17th century and is still open today, functioning as a deli, restaurant and coffee shop. The past decade has seen the rise in the popularity of the deli department within supermarket stores across the globe. Kenya has not been left behind. Here, deli is all about food; fresh bread other baked foods such as cakes and pizza and a wide variety of food giving customers a chance to take away their favorite meals, all weighed and packed hygienically. The German emigration to America took back in the 18th century, and New York was a particularly popular place for Germans to settle. The deli concept was most probably brought across during this time. Major Jewish immigration to New York in the 1880s coupled with the increase on anti-Semitism in Europe further revolutionized the deli concept. They served hot foods in a cafeteria style, where one picks up their tray, orders and pays at the register. Italian delis specialized in meats, cheeses, and pastas. They also sold sweets and other confectionaries such as cakes, spices and garnishes such as olive oil. As the concept developed, larger delicatessen stores sold cold cuts and meats, but the smaller, more up market delis stocked luxury food goods including confectioneries, fine spirits, wines, exclusive cheeses, high quality coffee beans, fruit, spices, herbs, specialty breads, tea and handmade chocolate. Literally, this could pass as the modern day standalone deli store. More recently, supermarkets may provide their own “deli” food, or even operate a fully-functional delicatessen on the shop floor. Delis today often remain specialized to the culture they originate from, but more varieties seem to exist now than ever before.
Europe In Europe, “delicatessen” has a different meaning than in the United States as it designates topquality and top price foodstuffs. While small US-style delicatessens may also be found in Europe, they still tend towards the luxury market. In Russia, the shops and supermarket sections that offer something close to US-style delis are called “kulinariya” and mostly offer various salads and main courses; the delicacy meats and cheeses, both cold-cut and sliced, are always sold in separate sections. Delicatessens may also provide specialist food from other countries and cultures which is not readily available in local food stores. 18
INSIGHT RETAIL | Q4 2012
Canada In Canada, both uses of the term delicatessen are found. Immigrants from Europe often use the term in a manner consistent with its original German meaning, but as in the United States, delis can be either strictly take-out or mixed takeout and sit-down restaurants. Australia In most of Australia, delicatessen retains the standard European meaning. Large grocery supermarket chains often incorporate a specific deli department, and there is an abundance of stand-alone independent delicatessens across all parts of the country. Both formats offer a range of cured meats, sausage, pickled vegetables, dips, breads and olives. Deli is also used to denote a small convenience store or milk bar. United States Here, a delicatessen store, or deli, is a type of business that could be described as a synthesis of a grocery store and a fast-food restaurant. The delicatessen shop offers a wider and fresher menu than those found at chain fast food restaurants rarely employing fry machines (except for chicken) and routinely preparing sandwiches to order. They may also serve hot foods kept on a steam table, like a cafeteria. They sell cold cuts by weight and prepare party trays. Delicatessen shops vary greatly in size but are typically not as large as grocery stores. In areas with high rents for retail space, delicatessen shops are often quite small.
Kenya Here, deli refers to take-away ready-made food; it could be meals similar to those prepared in homes or fast food as well as bread and other snacks such as sandwiches. The deli is usually a section inside the larger supermarket stores. The Kenyan deli concept borrows aspects from both the Europe and US. It has continued to become popular as the Kenyan consumer prefers fresh healthy food as compared to snacks and fast foods such as French fries. Generally, the ready-toeat food concept has fast taken shape in a market where the preparation of meals continues to become a challenge due to people’s busy schedules as others argue that it is cheaper to get ready food as opposed to cooking. Off late, as the retail chains seek for expansion, they are considering to invest in a larger deli sections comprising of a sitting area where customers can shop and later enjoy a meal or drink; tea, coffee or fresh juice. The Kenyan deli is indeed a value addition product for their shoppers.
Additional information: Wikipedia
Specialized Retail Training TEXT: Jasper Ouma
he target customer for retail stores in Kenya has become a sophisticated consumer with awareness of available shopping alternatives. The customer is no longer interested in just the price but in search for value additions to make his shopping experience worthwhile and different. Through technology, the modern day retail customer has been exposed to what is happening in other more developed markets and expects nothing less from the local supermarket. Given this scenario, to ensure that retail supermarket stores increase their service standards, sales and profits, there are certain factors that one can consider; Pricing: Pricing of products in the supermarkets has been the traditional and major point of competition, with many outlets claiming to be the cheapest in the market. However, this is not the case anymore, due to profit margin constraints and unique overheads that current supermarkets are facing; there is obviously a limit to how low they can go. Product: Products are continually being sourced from same/similar suppliers who enjoy various
Outlet Outlay: Currently most outlets are similarly outlaid with convenience as a base of their designs, adequate space that permits even luxurious shopping and complimentary products that completes the consumers shopping basket. Branding: Most outlets have comparable brand names and company colors and are located close to others thereby presenting no uniqueness in our market! People: This remains the only flexible asset in the retailers’ reserves. The quality of staff and their willingness to provide the consumer with that exceptional shopping experience will determine the following issues: willingness to come back • Customer’s ability to tell others about you • Customer’s volume and value of spend in your • Customer’s outlet growth and in turn retailer’s • Customer’s growth • Customer satisfaction
People Training: Distribution Management Systems Ltd offers training that is aimed at equipping supermarket staff with appropriate skills that ensures unique and delightful service to customers Claiming from Directorate of Industrial Training Most retailers have been making monthly contributions to DIT but never utilize the opportunity. Did you know that DIT will reimburse your training 200% based on your previous year’s contribution and that if you do not claim, you lose it! This has been the scenario as most retailers have been losing this money. Kindly consider training your staff before December 2012 and benefit from your 2011 contribution. Mr. Jasper Ouma is the Chief Trainer, Distribution Management Systems Ltd. Email: email@example.com
RETAIL MANAGEMENT TRAINING FOR SUPERMARKETS
t es ch e
economies of scale and can guarantee consistent quality. This leads to many supermarkets stocking similar product ranges. This is therefore not a competitive factor.
DISTRIBUTION MANAGEMENT SYSTEMS LTD Management Consultants & Trainers
Level one: Basic Training for Shop floor Staff Level two: Training for Supervisors/Managers 2 LEVEL SEMINARS
CONTENT OF TRAINING Ø Personal Empowerment Ø Customer Service Ø Supermarket Management Ø Communication Ø Stocks, shrinkage and other losses
s st toet es od
DIT APPROVED TRAINING PROVIDER (DIT/TRN/792)
1) BENEFICIARIES Ø Shop floor attendants Ø Aisle supervisors Ø Customer service staff Ø Cashiers Ø Packers Ø Shelf stockers Ø Store receiving staff Ø Back office staff Ø ALL STAFF IN THE SUPERMARKET
2) METHODOLOGY Ø Interactive lectures Ø Case studies Ø Role Plays Ø Group Discussions Ø Field Visits where possible Ø Exercises 3) CLIENT TO PROVIDE Ø Venue Ø Catering 4) TRAINING GROUPS Ø We propose to train in groups of 25 to 30 with least interference to daily supermarket operations.
nt cou s i d ial Spec if you ugh ro k th gazine o o b Ma the
5) TIMING OF TRAINING Ø CLIENT TO DECIDE 6) PROPOSED TRAINING BUDGET Ø Training fees per group of 25 for 2 days will be ksh 140,000/- plus VAT Ø Training of Supervisors and Mangers for 4 days will be Kshs 280,000/- plus VAT Ø DIT REIMBURSEMENT 200% OF LAST YEAR'S CONTRIBUTION 7) SUPERMARKETS CUSTOMER PROFILE: Ø Khetia Supermarkets All branches Ø Woolmatt All branches Ø Transmatt All branches Ø Naivas All branches Ø Rivanas All branches
DISTRIBUTION MANAGEMENT SYSTEMS LTD GILFILLANRD HOUSE, KENYATTA AVENUE 3 FLOOR, ROOM 314 P.O. BOX 1009 – 00517, NAIROBI – KENYA Tel: 0203567644; Cell: 0722726055/0732726055 Office contact: SUSAN - 0714801072 EMAIL: firstname.lastname@example.org, WEB PAGE: www.dms-train.com PLEASE CALL OR EMAIL FOR MORE DETAILS AND A CUSTOMIZED TRAINING
PERSONALIZED, PRINCIPLED & PROFESSIONAL, TRAINING SOLUTIONS PROVIDER
H E A LT H T I P S
Authenticity, Health, Quality add to success of ready meals
n tracking the global launch activity of ready meals in 2011, Innova Market Insights identified some key trends, including ongoing interest in healthy options and more authentic-style ethnic recipes. There is also more emphasis on natural, organic, and locally-sourced ingredients and more interest in restaurant-style products for in-home dining as an alternative to eating out. While convenience continues to be the key positioning for ready meals and prepared foods, more than 36% of introductions tracked used a health positioning of some kind. Passive claims, such as low-calorie, natural and organic dominated, but also more active claims, such as vitamin- and mineral-fortified, weight management and heart health were reported. The highest levels of health claim usage were among ready meals and meal components, at nearly 50% of total launches, falling to less than 25% for categories generally much less widely associated with health concerns, particularly meal kits, pizza, and sandwiches. Rising interest in “naturalness” and clean labeling has been a feature of the food and drinks market as a whole in recent years, and ready meals is no exception, despite the challenges presented by its inherently “processed” image. More than 17% of launches recorded by Innova Market Insights were positioned as additive- and/ or preservative-free, more than 5% as natural, and nearly 6% as organic, resulting in nearly 25% of introductions using either one or more of these claims. The next most popular healthrelated claims related to free-from or low and light products, with more than 6% using a gluten-free positioning and just under 6% a low-fat claim. A significant number are also specifically positioned on a vegetarian platform, equivalent to more
Source: Dairy-Deli-Bake Digest, a trademark of the IDDBA.
INSIGHT RETAIL | Q4 2012
than 10% of global launches in 2011. The research concludes that, despite difficulties in some parts of the market, product activity in ready meals is continuing as a result of ongoing demand for convenient meal solutions among time-pressed consumers. ...For Chocolate Lovers Chocolate never goes out of style; the challenge is in finding new and exciting ways to use it. The Food Channel, CultureWaves, and the International Food Futurists decided to take a deeper look into chocolate for trends; Craft Chocolates: This trend combines all the worries of the world and solves them with chocolate. When you make your own craft chocolates, you can, well, craft anything you want out of anything you want. Chocolate with an Ethnic Twist: This is being seen across all desserts, not just chocolate. But it appears to have started with chocolate, as Mexican chiles and vanilla got called out in candy bars. Then companies added matcha (green tea), and began dipping churros in chocolate. Chocolate in Unexpected Places: Expect to see chocolate at breakfast and to find more and more unusual flavor combinations. In fact, chocolate flavors are enhancing all kinds of food experiences. Chocolate for the health of it: If you have heard enough of “Death by Chocolate” and overindulgence (well, it may depend on the day). The point is, if we can garner a few health benefits and eat chocolate at the same time, we are all about it. The “Cinnamonizing” of Chocolate: Cinnamon is hot right now in chocolate. He Said/She Said Chocolate: Can you tell gender by your preference for type of chocolate?
Informal tests showed yes, and science is at least saying that women prefer the stronger flavors of dark chocolate. Rumor has it that parents in need of a baby should consume some chocolate every day. A Chocolate for Every Dietary Need: It is hard to think about flourless or sugar-free or even dairyfree when it comes to chocolate, but it is there. The huge rise in glutenfree diners has had a bigger impact on menus than the entire calorie counting that worried restaurants a few years ago. Crowd sourced Chocolate: Call it mash-up, personalization, or customization. This trend says that chocolate is showing up with some unusual combinations in what we call a mash-up of ingredients. Chocolate Pairings: Chocolate and roses, Chocolate and cheese or Chocolate and wine. It is not new to put chocolate with something else that complements it, but off late there are a lot more pairings.
Make time your allySave for your retirement now
H en ts
yut t a
ow many times have you seen the above statement and ignored it because you think that you are too young to start saving for retirement, or too old to save for your retirement or you are selfemployed you do not have to save for retirement? How easy has it been for you to ignore the statement under the guise that your company has no company scheme therefore you cannot possibly save for retirement, or that you are self-employed therefore you cannot save for retirement? According to financial analysts, one of the most neglected things in Kenya is saving for retirement. The Retirement Benefits Authority (RBA) indicates that a majority of Kenyans hardly spare a thought for retirement at all until maybe when they are within striking distance of age 55. For most, retirement savings consist purely of the pension contributions put in by their employers. For those with non-mandatory contribution schemes, even putting in their own tax free contributions is not an option, preferring to rely 100% on the employers’ contribution. However, this could be for a number of varied reasons; mainly the fact that living for today is in itself a hustle for most people, with school fees and rent to pay, parents and distant relatives to support and food to put on the table. While examining some of the consumer financial savings choices made today, one realizes that many will opt for debt instruments such as bank or co-operative loans as opposed to savings’ products. Today, with the expansion of the financial markets more options exist for those who would like to save for retirement as more companies are venturing into the pensions’ market increasing the array of services. Here, individuals will opt for either receive a cash lump sum or receive a monthly income for the entire lifetime after retirement. The laws put in place by the government through RBA to regulate the retirement benefits
industry has enhanced proper governance structures for retirement benefits schemes. These regulations have brought along benefits such as security of members savings and enhanced accountability by the parties involved in management. Since the government is on a mission to combat old-age poverty, tax incentive structures have been put in place to encourage individuals to save through a registered retirement benefits scheme. For instance, for every saving that an individual makes that is less than Kshs.20, 000 per month, the amount is not subject to tax. In addition, investment income earned on these savings is also not taxed. There has been however, a misconception that retirement saving is a reserve for only those who work in the public sector or in large organizations. Personal pension schemes are an opportunity for the self employed and employees in organizations with no company schemes to also save for retirement. Personal pension schemes have become popular among the self-employed and small and medium enterprises (SMEs) that are yet to have the capacity to set up company schemes for their employees. The Octagon Personal Pension Scheme targets SMEs as well as self-employed members of the public eager to save for their retirement. There are eight (8) reasons why one should save through Octagon Personal Pension Scheme: entry fee and costs are clearly defined. • No • Members can get paid their benefits at any time they want to exit. • Benefits are paid within 15 working days after notification. • The savings are credited with full investment returns as earned. • Transfer to another retirement scheme attracts no penalties.
• A member can vary
savings levels as per financial circumstances.
• If one saves Kshs2, 000
per month consistently from age 25 to age 55 years you automatically qualify for Kshs4 million at retirement.
• Contributions can be paid
through MPESA via Paybill No. 916600 and the account number is your scheme membership number.
Always remember, retirement saving is like a hydraulic system, whereby one uses a little force to do a big job. It is better to start when one is young and energetic, rather than rush at the last minute where one will be required to save lump sums for one’s future.
Ksh. 4m The amount of money you automatically qualify for if you saved KShs. 2,000 per month from age 25yrs-55yrs
Author: Fred Waswa, Managing Director Octagon Pension Services Limited Email: email@example.com INSIGHT RETAIL | Q4 2012
R E TA I L T R E N D S
Global retail trends at the heart of local retail growth TEXT: Atul Shah
he world is fast shrinking into a village. This statement denoting the breaking of barriers and structuring of world social economic affairs in a global village rings very true in the retail world. In East Africa just like in other parts of the world, the consumer is turning out to be extremely discerning and aspiration-al. Most consumers prefer to use internationally manufactured products that satisfy their psychological preferences’. This trend for me is a cue to sound an alarm for local manufacturers to address the challenge. Consumers will easily shift from brands with a local heritage to international brands unless we can quickly move to raise quality standards, packaging and value addition. The future of the regional retail sector will beyond investment continue to rely heavily on local manufacturers. However, these manufacturers must also rise to the occasion by adopting international standards. On this point, I always mention the case of Kevian Industries a local beverage manufacturer that has raised the bar and attained global standards for its range of fruit juices. Kevian for me is a perfect example of a company that has successfully attained standards previously reserved for the likes of DelMonte. I am also impressed by Pwani Oil Industries, which has recently also invested heavily in raising the bar in quality, branding and packaging. All these are essential ingredients that raise the profile and brand equity of a product to a consumer’s eye and are not mere aesthetics. In my view, the challenge of maintaining world class standards cannot be underrated. Given the growth in literacy levels and exposure to international standards due to increased travel, Africans are demanding and expecting similar standards as those practiced abroad. For example within the retail sector where we serve diplomats, East Africans returning from the diaspora and other well-travelled east Africans, we can’t afford to present mediocre retail services. Our customers at a minimum expect us to meet and where possible exceed standards they’ve experienced internationally. This means that we have to invest heavily in store stocking with a mix of international and local brands. It also means the ambience within the stores has to be tastefully done and the location of the stores also has to be in the finest developments. I keep on reiterating that unlike in the west, where stores are within arm’s reach, East Africa as a whole remains a virgin island as far as the retail market is concerned. The citizens and expatriates living here demand products/ services that can satisfy their dynamic lifestyle needs.
Thus, the opportunity for retail investments remains high. To justify my thoughts on retail, I’ve time and again resorted to using Kenya as a country case study. Use of the Kenyan environment and scenarios remain very valid as Kenya is highly representative of the other east African countries. Another challenge that is weighing heavily on me is the growing incidents’ of organized pilferage. What we previously thought to be small time cases of shoplifting has unfortunately evolved to become an organized crime leading to high shrinkage rates on our stockholding. It’s extremely alarming to note conventional in store policing measures are not helping much on this score given that these organized rings are now looping in our own staff in this schemes. The industry pilferage rate should always be at less than 2% but this appears to be growing at a fast rate. With the formal retail trade market estimated to be worth more than Kshs 200Billion the industry could well be losing more than Kshs 3billion annually to shoplifters among other shrinkage avenues. In my view, beyond surveillance systems, there’s a need to review existing laws to make them more punitive both for shoplifters and also for employees tried under theft by servant clauses. At Nakumatt, we also believe that environmental sustainability particularly the plastics war can only be won through an integrated, focused and sustainable approach such as the ambitious Nakumatt Think Green; Go Blue campaign which is geared at sensitising end users. Through such a campaign, we are able to engage our shoppers to adopt a more responsible attitude by refraining from the use of plastic bags and opting to use reusable bags. Besides shoppers, we are also engaged in a consultative process with keys suppliers to reduce unnecessary use of plastics in product packaging by seeking environmentally friendly options. Our project has been informed by the uncertainty regarding the relative environmental benefits of different retail bag types. Globally, it’s agreed that addressing various environmental impacts is ultimately a question of identifying and using “better” bags, and then encouraging consumer behaviour change over time focused on reducing bag use, effectively reusing bags, and recycling them at the end of their useful life. Convincing consumers to; reduce, reuse and recycle bags, in that order is the only viable option to managing plastic waste from a retail perspective.
Mr. Atul Shah The Managing Director, Nakumatt Holdings
Last but not least, let me take this opportunity to reinforce the fact that the future of the retail industry remains very bright. As a player in the growing retail sector in Africa, I am alive to the fact that global brands/corporates are keenly studying the Africa market and will be making very strong forays. For me, this is a positive and welcome threat that demands for African corporates to ensure they maintain world-class standards if they intend to survive. At Nakumatt Holdings, I am always reminding my colleagues that we need not worry about the foray of International chains into Africa. Our constant worry however, should always be based on our corporate capacity to deliver value to our target customers in a better way than they will ever manage to do in this market. This demands that we constantly review our service delivery standards and also ensure that we forecast demand points by signing up to be present in key locations and countries. As matters stand today, the market for the formal retail trade is still up for grabs and presents a good investment opportunity both for African and international investors.
email: nakumatt@Nakumatt.net INSIGHT RETAIL | Q4 2012
RESEARCH + INNOVATION
Powerful insights into your consumer goods markets
fK East Africa is a research company based in Kenya and overseeing operations in Kenya, Uganda, Tanzania and Ethiopia. It is part of the global GfK Group that has its headquarters in Germany. In Kenya, GfK East Africa was set up in 2010 even though the company has been conducting research since 2006 from its South African office initially tracking the sales of mobile phone handsets which has since expanded to cover areas in information technology, consumer electronics, white goods and small domestic appliances. Kenyaâ€™s retail market has continued to witness drastic changes with more changes expected driven by the growth of the suburban towns and the new Constitution that will encourage the development of retail infrastructure to support all the regional governments. In Kenya today, GfK has expanded its scope to cover the following products Telecommunications: Mobile Phones, Modems Major Domestic Appliances Refrigerators, Washing Machines, Cookers, Microwave Ovens, Freezers Consumer Goods: CRT TV, Panel TV, Audio home systems, DVD Players Photography: Digital Camera Office Equipment: Printers Information Technology: Laptops, Tablets Small Domestic Appliances: Deep fryers, Food preparation appliances, hair dryers, Iron boxes, Juicers, Kettles, Shavers & Toasters DIY (Do It Yourself): Paints and Cement Lubricants: Engine Oils
INSIGHT RETAIL | Q4 2012
Based on this information, companies are able to make decisions on prices, promotions, distribution and portfolio analysis based on the market trends.
GfK generates reports from sales collected from shops that are participating in the GfK panel. These reports are used by manufacturers of electronics products to track the market movements in the segments that they are competing in. Based on this information, companies are able to make decisions on prices, promotions, distribution and portfolio analysis based on the market trends. The benefits of the GfK reports are not limited to the manufacturers only. The retails participating in the GfK panel benefit from having an opportunity of tracking the overall market performance on a regular basis and thus understand whether the market is growing or shrinking in size. With this information, retailers are able to evaluate whether they are matching the growth registered in the overall markets or are performing below the total market. In addition, the GfK reports are able to highlight various factors driving growth in the market and the prices behind the growth. This information is invaluable especially to the buyers as they are able to select products that are driving the market and thus having a lower probability of having dead stock in the outlets. At all times, GfK maintains confidentiality of the information received from the retailers. At the same time, the information received is not shared with industry players who are not part of the panel. We believe that as companies continue to expand their presence out of Kenya, GfK services will prove to be useful in helping the retailers make better stocking decisions on the electronic products and hence increase their chance of success.
The GfK Group, established in 1934 as Gesellschaft fĂźr Konsumforschung (Society for Consumer Research) is Germanyâ€™s largest market research institute, and the fifth largest market research organisation in the world, after Nielsen Company, Kantar Group, Ipsos (incl. Synovate) and IMS Health. It was founded by an association of university teachers. www.wikipedia.org
QR codes The popularity of QR codes is as a result of people increasingly using mobile phones to access 3G networks.
ne of the keys to efficient search engine optimization is making sure that the company’s or business website remains constantly updated. Whenever one blogs or changes something in his homepage or even introduces exciting business offers for his clients, it will be important to keep the site “alive” by making sure the online users and followers (with regards to social media) are updated. In the same way as websites, universal resource locators (URLs) and more recently Facebook and Twitter company/business pages are been tagged along in TV, magazines and newspapers adverts and other related notices intended for the mass under the address component, QR codes are also been added making it even easier to get more information about a product, service or even the company. QR codes, short for Quick Response codes are currently used in publications such as business cards, newspapers, letter heads and envelopes as well as other company and business merchandise. A QR code is a 2-D barcode that can be scanned by a smart phone’s camera and transfer information. Their popular¬ity is as a result of people in¬creasingly using mobile phones to access 3G networks. Based on the type of code it is, it might direct the viewer to a website or make a phone call. They are similar to the barcodes used by retailers to track inventory and price products at the point of sale however the main difference between the two is the amount of data they can hold or share. QR Codes are used to take a piece of information from a transitory media and put it in to your cell phone. Jill Kibigo, an online content producer explains that people are about to spot QR Codes not only in magazine advertisements but also on billboards, web pages or on almost any object which users might need information. QR code printing can be done in brochures, leaflets and product packaging or labels or even walls. One can even tattoo a QR Code on your body! Whereas a barcode encodes data in only the horizontal plane to allow scanners to read the width and distance between the vertical lines, QR codes encode data both horizontally and vertically in a grid of tiny squares. This allows for much more data to be encoded in a smaller space. QR codes, on the other hand, can actually embed that information in the code itself, and, when read with the proper software, can trigger actions like launching a website or downloading a file. Additionally, QR codes can be read from any angle, while barcodes must be aligned properly. Their origin of QRs is said to be Japan where their usage remains common. Initially used to track parts in vehicle manufacturing, QR Codes are now used over a much wider range of applications, including commercial tracking,
entertainment and transport ticketing, product/ loyalty marketing. It can also be used in storing personal information for use by government. You can use QR Codes on a website but they should not generally be used as a substitute for an old-fashioned hyperlink because obviously the user is already online and does not really want to fiddle around with their phone only to find a website they could have just clicked through to in half the time. “Once it is in your cell phone, it may give you details about that business (allowing users to search for nearby locations), or details about the person wearing the t-shirt, show you a URL which you can click to see a trailer for a movie, or it may give you a coupon which you can use in a local outlet,” Mr. Kibingo adds. When you scan such a QR bar code using a web cam or mobile phone camera, the QR reader application takes you to a Web site, a YouTube video or some other web content. QR codes are an easy way of sending people to a site without having to type a URL. Generating and using a QR Code Mr. Kibingo says one can easily generate a QR code using a site like Kaywa.com or use the Open Source code to generate codes. Search Engine Google also has a tool that can be used to come up with a QR Code. Businesses; large or small could use QR codes in a number of ways. One might auto generate one next to every product on a company’s website containing all the product details, the number to call and the URL link to the page so they can show their friends on their cell phone. A QR can also be added to one’s business card containing one’s contact details making it easy for someone to add you to their contacts on their cell phone. The codes can be added to any print advertising, flyers, posters, invites,
TV adverts containing, product details, contact details, offer details and event details. Others include competition details, coupons or even on Twitter, Facebook, MySpace IDs and a link to one’s YouTube video. There are a number of applications in the iPhone App Store that can read QR Codes, including the free QR reader. Most Android phones and BlackBerry mobile phones are able to read the codes right out of the box, as can newer Nokia handsets. Windows Mobile users can download QuickMarks. All you need to do is launch the appropriate app, and point your phone’s camera at the QR code you want to scan. At the same time, not everyone is aware of QR codes. As a result, not everyone who sees one is likely to pull out a cell phone and take a picture of the matrix. Not everyone owns a camera phone, and because many cell phones do not include a QR reader, the software must be downloaded and tested. Furthermore, a QR code might direct us¬ers to a website that does not display properly on a cell phone. With the ever growing number of mobile phone users now owning smartphones, QR Codes have the potential to have a major impact upon society and particularly in advertising, marketing and customer service with a wealth of product information just one scan away.
INSIGHT RETAIL | Q4 2012
A S S O C I AT I O N S
Association for Retail Sector Is it necessary?
ccording to the Kenya National Bureau of Statistics, the retail sector growth rate stands at 10% controlled by medium class consumers and it yet to mature to reach the strides of their peers in developed countries such as in Europe and America. In Kenya, the expansion of supermarkets follows high and medium class consumers leaving out the other class of consumers to small traders. Kenya’s growing middle class is a factor that has seen the growth of the country’s retail sector. However, due to access to various media channels and information, they have become more discerning and knowledgeable. In turn, this kind of shoppers want flexible shopping hours - which has seen an increase of 24-hour shopping outlets, a wide variety of products where they can choose from as well as convenient shopping locations. According to Vision 2030 (Kenya’s economic blue print), the government aims to increase efficiency in the country’s retail sector and raise the market share of products sold through normal channels to 30% by 2012, and to contribute an additional KShs. 50billion to the GDP. Retailers’ Association? Business and trade associations are mutual assistance organizations that have formed for the purpose of promoting growth and progress in their particular industries by providing a central information source about the industry and its issues, establishing best practices guidelines, lobbying local, state and federal government, and promoting the image of the industry through licensing, membership standards and public service advertising. Some may argue that there is a difference between business associations and trade associations, though the terms are often used interchangeably. Associations differ from one to another depending on the objectives and purpose they are established for and the benefits their members or stakeholders acquire from them. Most business and trade associations are not-for-profit corporations, but many are not because they form as informal clubs and do not collect money. A trade or business
INSIGHT RETAIL | Q4 2012
Ms. Betty Maina C.E.O Kenya Association of Manufacturers
According to Vision 2030 (Kenya’s economic blue print), the government aims to increase efficiency in the country’s retail sector and raise the market share of products sold through normal channels to 30% by 2012, and to contribute an additional KShs. 50billion to the GDP
association should essentially provide link for cooperation, dialogue and understanding with the Government by representing the views and concerns of its members to the relevant authorities. Insight Retail Magazine sought views from the Kenya Association of Manufacturers (KAM) chief executive officer Ms. Betty Maina on the possibility of stakeholders in the retail industry setting up an association. “An association for the retail industry in indeed a positive idea however its sustainability is critical depending on issues that members will need to tackle and solve through the association,” she explains. Some of the industry issues which may require the help of an association include; • Business information on trade • Pilferage or stock shrinkage: According to industry insiders, with the formal retail trade market estimated to be worth more than KShs. 200 billion, it could well be losing more than KShs. 3 billion annually to shoplifters among other shrinkage avenues. Beyond surveillance systems, retailers are of the opinion that there is need to review existing laws to make them more punitive both for shoplifters and employees tried under theft by servant clauses. • Any labor unrest in the industry • Advocacy matters on behalf of the industry to government • Tax issues in case of changes in tax regime which may affect the industry • Work out round table models to help solve pressing issues from industry such as government and suppliers
Rate Card Retail Interchange Centre Limited is the publisher of the Quartely Magazine – “Insight Retail” which focuses on creating a platform where retailers in Kenya, large or small can share their retail experiences, trends as well as case studies through a common retail business language to enable upcoming or existing retailers pick on the best prooven business and retail solutions to give investors a return on their investment. Our target audience for the Magazine is the general Retail Industry which includes; • All retailers in Kenya: Existing and upcoming • All strategic Partners, Solution & Service providers of retail business • All institutions which offer training in relation to retail concepts • All research institutions which carry on their research in the retail outlets and • All other interested partners. Our advertising rates FY2012/13 is as below: ADVERTISING SPACE
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INSIGHT RETAIL | Q4 2012
INSIGHT RETAIL | Q4 2012