The past five years have not been kind to the dominant players in the retail space. Even more recently, Nakumatt, once seemingly an invincible retail monolith, has dramatically, and infamously fallen from grace, with numerous creditors calling for its liquidation. While other traditional industries players may be rejoicing in the wake of Nakumatt’s troubles, they too should be cautioned over following the same well-trodden path.
As reiterated often on this column, innovation is the mother of progress. It means turning creativity to economic value. Particularly in this day and age, innovation is arguably the only viable weapon against competition. The same applies in the retail space. While not pointing an accusatory finger, retail giants the world over are comfortable in their dominant position. Retail giants know the value of the products they provide, and are comfortable that their target market will time and time again come back. Unlike other markets whereby the consumer has to be lured by the service provider, the same may not be necessary in the retail space, particularly in relation to ordinary household goods. Nakumat, Tuskies, Naivas, and their elk, know that at the end of the month, the middle-class Kenyan, as if by clockwork, will visit one of their stores in search of household necessities. Traditionally, the only challenge faced by these giants, is who attracts the highest number of customers.
The technology age that we are currently in, however, has produced disruption in its wake. It is no longer business as usual. Traditional retail market players, used to competing with businesses operating similar business models, are now facing steep competition from new entrants that are truly taking the market by storm. Amazon and Alibaba, for instance, are giants in the field that are currently pioneering retail innovation. While traditional market players are sticking to the model whereby the consumer visits their premises when in need, these new entrants, bringing with them a barge of new ideas, are busy finding ways to serve the consumer, with minimal effort from the consumer – on-demand services ‘anywhere, anytime’.
A little closer to home, we have players such as Jumia, Pigiame, Kilimall, among others, who are willing to take a risk and attempt a less trodden, but arguably more future proof path: “on-demand services”. While end month shopping at the local mall may be sacred tradition to some families, the same can now be done from the comfort of one’s home. Only this week, Safaricom, Kenya’s very own innovation juggernaut, unveiled its online retail platform – Masoko. Arguably, Safaricom, noting the potential for growth in the retail space, and the resistance to change currently being experienced by legacy players, seeks to utilize Masoko to earn a piece of tomorrow’s pie, by embracing innovation.
Lesson: Innovate! Innovate! Innovate!