Brick-and-mortar Supermarkets can beat ecommerce platforms if they want to

Close to end of last year Naivas Supermarket said they’d invested about 180 Million in setting up an e-shop: naivas.co.ke. The news came around the time Safaricom was setting up Masoko.com whose website I still feel is poorly designed. Naivas also announced Naivas Pay, a quite unique payment system that enables their customers to pay using cash, cards, and even mobile money.

A few days ago, I tried shopping from the Naivas website and realised I am not included in their delivery areas. I live in Maseno but they only deliver in Nairobi. That kind of made me angry. They are available in many cities and towns across Kenya, but can’t deliver outside Nairobi? But then again, maybe they are planning on expanding their delivery across Kenya in the coming days. So let’s be hopeful.

Traditional brick-and-motar retailers, in my opinion, are sitting on a lot of opportunity. They can, if they want to, easily beat the new shaky and unsure e-commerce platforms in Kenya. They have the upper hand, and all they need is a little bit of investment, and some wise minds to hack it.

Here are some things that are really bad with the current e-commerce platforms in Kenya:

• None of them have stock: The current mainstream platforms all require vendors to sign up to their platform so as to avail stock.
• Delivery time-frames: No one actually delivers within the specified periods promised. That’s mainly because all of them have to send their items from Nairobi.
• Delivery Costs: Have you ever checked out with three items and been asked to pay delivery for each of the different items? Kilimall did this to me and I decided it is better to find a local shop that could have the items.
• Assurance of quality: Ever bought really cool headphones online for a nice price only to discover they are fake? Yeah, Jumia I’m talking to you. Although, it is the particular vendor on the site that’s to blame, it is Jumia that takes the blame.
• Limited variety of goods: You can’t shop for every personal or household item you need by visiting say Jumia or Kilimall. Groceries and many other food items can’t be bought online. And this will be a big market in the near future.
• Payment: People want to pay on delivery. People can’t trust you to deliver without seeing the items, without verifying the quality of the items.

We know that for any e-commerce platform to be sure they can properly serve the whole country with a variety of items in stock and fast delivery, they need to setup warehouses across the divide so that items can be quickly released once ordered. They need to have a good partner for delivery. Or to set up their own delivery company, which up to now no platform in Kenya has tried. The e-commerce platform also needs to very intimately understand the different types of buyers based on their spending habits, and their preferred items based on location.

Traditional brick-and-motar retailers are sitting on a lot of opportunity.

Supermarkets have the upper hand in all this. Having stores open across the country means they already have warehouses across the country. They can easily invest in their own custom delivery system. I mean if they can deliver electronics e.g. refrigerators across the country, they can do well in this sector. Also, and this is big, they have a lot of data that can help them better understand the types of buyers in the different location in Kenya.

I want to believe that all supermarkets know that in the near future most people will want to buy stuff online and have it delivered at home. Some estimate this near future as the next 10 years. Some say the next 5 years, but we all know no one can really tell.

What this means, however, is that current eCommerce platforms are in direct competition with local supermarkets. And the odds (for the foreseeable future) are tilted in favour of the eCommerce platforms. Thus, local supermarkets need to have a plan for staying in the game.

During all December holidays, as a rule I don’t walk in to any Tuskys or Naivas Supermarket in Kisumu (or Nakumatt, but they’re dead now). Why? Because they are crowded as hell. You will spend 10 minutes filling your trolley but spend more than 30 minutes queuing up to pay.

Websites don’t have queues at check out. And you won’t have to move back for someone to key in their pin or wait for someone to find the paybill number or count their cash. Why not have a way for customers to do this? Why not offer this as an alternative for shopping?

eCommerce platforms are in direct competition with local supermarkets. And the odds are tilted in favour of the eCommerce platforms

We all know that each market is different. And Kenya is quite the unique country. That’s why what works in other countries won’t necessarily work in Kenya. And I want to bet that’s why online retailers aren’t doing that well in Kenya. They’re approaching the Kenyan market as they have seen other retailers try it out in other countries.

See, there’s a supermarket within a sizable radius of anyone who’s interested in buying things online. This is not backed by any data, but it is arguable that anyone who’s ordered for something online, or who has the potential to order for something online lives within a good radius of a supermarket.

Supermarkets in Kenya need to try and be unique for the Kenyan people. Don’t set up e-shops that imitate the other retailers. Customise the experience for Kenyans, and do it such that it is truly unique for all Kenyans in all locations across the country.

Here are some things I think that can really help out with Supermarkets setting up e-shops:

• Have the normal shop on a website. As have Naivas and Tuskys.
• Classify items based on the stock of the different supermarkets in the country
• Have a user log in and state their location and then show the user supermarkets across his area and the stock that’s in the said supermarkets
• User can then add to cart the items they want that are available in the particular supermarkets
• If they want other stuff that may not be in the supermarket they can order for these items and pay extra delivery fees for the same
• User can then check out and choose between having the items delivered or picking up the items at the local supermarket near them.
• The Supermarkets can be collecting data on the trends in shopping and learn trends like which areas love what items more and stock the supermarkets in these locations with such items. Based on the data, different supermarkets can stock different items as per demand.

What works in other countries won’t necessarily work in Kenya.

One of the biggest predictions of 2018 is that Amazon.com will buy Target. Some have called this preposterous; the joke of the century. But many have seen that it is quite possible. And it would make so much sense for the retailing giant to own retails stores across the USA which would help with crazy delivery timelines.

If supermarkets want to stay in the game in the near future, they need to go digital. But it isn’t just going digital, it is setting up a unique and unmatched shopping experience. Something that the current e-commerce platforms have failed to do.

What are your thoughts on this?