Growth in retail business redefines firms' sales strategies

By Macharia Kamau

The changing landscape of local retail industry is making manufacturers rethink their sales and distribution strategies.
Other than the increase of supermarkets in commercial and residential areas in major towns and as the shopping mall idea takes root, retail outlets are not lagging behind in Kenya.

This is why mere presence of a brand on the shelf of a retail shop or supermarket is no longer enough and firms have to be innovative and fit in retailers’ strategies to stay competitive.

Manufacturers and suppliers to retail outlets have been compelled to move from the traditional model of sales and distribution to one that is in sync with the retail reality today.

"Retail business has become more organised than before. We may have to deal with a retail industry more complex in a few years," said Joseph Kibuchi, the Customer and Commercial Leadership Director for Coca-Cola East and Central Africa Business Unit.

"Therefore, if you do not win with the retailers in the market, you will lose out to the competition. To avoid this, the manufacturers have to realign their strategy to be in line with that of the retailer," he said.

The beverage maker has recently introduced a division in its East and Central African operation aimed at improving sales and distribution, bringing on board the retail industry.

Mr Kibuchi said the firm’s customer and commercial leadership division keep tabs on the changes taking place in retail business — large and small retailers: malls, supermarkets and kiosks.

Value-based relationships

"The division comes up with propositions that demonstrate to the retailers that we are in tune with their business, something that helps solidify our position as their preferred partner," he said.

Kibuchi said the practice establishes value-based relationships that will lead to better business results with all customers.

He said getting hold of the retailer is part of the job and the firm has to communicate to consumers if it is to move odd products from a supermarket shelf.

"Commercial leadership is the collaborative end-to-end planning and execution process that focuses on creating good shopper experiences at a time. The success of commercial enterprise lies in the simple idea that everyone who touches our brands should get value," he said.

Trying to create a ‘wow’ shopping experience for consumers has seen brands take their battles for market to the supermarket aisle, branding entire shelves and even floors.

New technologies

"Over 80 per cent of buying decisions are made at the mall. So, it pays to have a strong presence in a store," said Kibuchi.

He said Coca Cola would be introducing new technologies in the retail stores locally to improve the shopper experience.

"We will soon have intelligent and interactive vending machines in select shopping malls in Kenya," said Kibuchi.

These are available in some of the markets and enables customers, for instance, blend their own cocktail of juice. Retail outlets globally want to associate with big brands, often seen in the amount of space given to brands that have a name in the market.

Uchumi Supermarkets CEO Jonathan Ciano said the relationship between brands and retailers is mutual. He said such relationships with firms like Coca Cola and other recognised brands restored consumer confidence in Uchumi Supermarkets, when the chain was facing difficulties in 2006.

"The presence of certain brands on our shelves when we re-opened helped restore customer confidence in the supermarket chain," he said.