Traditional shops still remain popular despite protracted supply chain issues and supermarket and online retail competitors.
The 2022 Digitising the Corner Shop research, published by Flourish, a global fintech investor released yesterday shows better-than-expected sales and that 94 per cent of consumers surveyed plan to shop as much or more at their corner shops in the future.
Both shopkeepers and customers believe, however, that corner stores need to speed up adoption of digital technology to remain relevant and competitive.
The survey sampled the often overlooked $900 billion industry with informal retailing making up 67 per cent per cent of total retail across Kenya, Nigeria and South Africa.
According to the survey, 73 per cent of consumers strongly agree that the corner shop is vital to their community.
This is mainly due to proximity, convenience, and service, with 50 per cent of them visiting their corner shop daily, and 24 per cent regularly receiving credit.
The report shows that 80 per cent of shopkeepers are eager for digital business and financial tools, which have the potential to increase profits by 60-100 per cent.
At least 71 per cent of consumers purchased more groceries from local corner shops during Covid-19 lockdowns.
Flourish managing partner Arjuna Costa says the research proves that, even during the pandemic, predictions of the corner store’s demise may have been premature.
“While customer sentiment across the surveyed markets is enthusiastic, continued patronage will depend on further digitisation of store operations and customer responsiveness,’’ he said.
He added that research findings can be applied to other markets in Sub-Saharan Africa.
''With corner shops adopting some form of a digital solution with the diffusion of mobile technologies in Africa solving many of the challenges that shop owners face, making it easier to track inventory, record sales, monitor cash flow, and supervise customers’ credit,’’ the report reads in part.
Even so, shopkeepers are adopting new technologies.
During the pandemic, shopkeepers accelerated the adoption of digital technologies to address supply chain inefficiencies, low online sales and limited access to finance and other banking services.
Research findings show that 55 per cent of shopkeepers use messaging apps in their businesses, and 75 per cent plan to increase usage in the next 12-24 months.
Flourish estimates that when corner shops go digital, merchants can increase profits by 60-100 per cent, which may explain why 80 per cent of shopkeepers are eager for better business and financial tools.
However, they remain slow to adopt them due to other pressing business tasks, data security concerns, lack of familiarity and limited access.
The continued reliance on corner shops by customers is despite the growth in commerce.
The global e-commerce market size was valued at $9.09 trillion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 14.7 per cent from 2020 to 2027.
Increasing penetration of the internet is bolstering the smartphone-using population across the world.
Kenya's adoption of e-Commerce continues to grow, with Statista indicating that the user penetration is above the regional average.
Revenues are expected to have a positive annual average growth of 16.4% by 2025.