The other day I was reviewing a piece on key shopping destinations around the world. This was out of curiosity given the development in the retail sector. However, if you run a search engine on “shopping destinations”, you will realize this is almost synonymous to fashion! Most search engines provide results mostly on fashion destinations. I thought this is biased – what about other items like electronics? Cars? For that, one has to make a specific search. Of course, this ended up with some common areas such as Singapore, New York, London, Hong Kong, Tokyo, Dubai … after checking a few more, I realized it’s the same pattern – North America, Europe and Asia.
So, I decided to search the same for Africa and your guess is as good as mine – the world, including the web, thinks Africa is synonymous with South Africa! A few other areas cropped up such as Cairo, Marrakech (interestingly not Casablanca). So, what about East Africa? I searched for Nairobi and some interesting results for Nairobi as shopping destination popped up – Crafts and curious, park in the city … etc – the unique offering.
The retail business worldwide has experienced phenomenon growth, with key destinations such as listed above experiencing huge gains. However, different regions have experienced varied success rates. The key aspect here is differentiation. For instance, taking fashion as a common aspect, this may be of common interest but different areas will have differences in what makes it tick. For instance, New York could be due to designer outfits, Istanbul could be affordability; Dubai could be due to accessories such as gold.
Hence, taking Dubai as an example, what has made the retail sector grow and more so, events like the shopping festivals? For instance, in 2009, the Dubai Shopping Festival attracted more than 3.3 million people (more than the population of 1.5). It generated revenue in excess of 1.12 Billion USD (over Ksh.90 Billion). The initial objective for the shopping festival was to revamp the retail sector; however it has ended up as a tourist attraction, and a major earner for the economy attracting millions of direct and indirect marketing costs.
We find success is not only due to the vibrant retail sector, but also many other players come in play. For instance, the local airline is not only the official carrier, but also a sponsor as well as offering packages and discounts. This ensures any one taking a flight is assured of ‘safe landing’ inclusive of hotel transfers and accommodation for specific number of days. The local hospitality industry also lines up; from buses, taxis and metro to ensure shoppers have a smooth flow from one centre, mall or area to another. The shopping festival does not take place under one roof but whole city. Hence, taxis line up outside all the areas to ensure shoppers are able to hop from one area of interest to the other. Of course, hotels, restaurants and even road side kiosks play a role to ensure there is variety from fine dining to food on the go (literally!!). The media, both paid and unpaid, passes the message across. The government, mainly through relevant government departments oversees all elements to ensure things are running smoothly. Security organs are also available round the clock. In short, it is an exercise where all stakeholders contribute.
At micro level, the retailers play a significant role to ensure goods are available at point of sale (as advertised), displays and excellent customer services all contribute in making the exercise a success. Many internationally recognized fashion brands are present in the market. At the end of the day, a lot of work goes in making a wholesome customer experience. Of course, there could be a few flaws, be it at micro-level (poor experience at some shops) or macro, but the whole exercise creates buzz for the market. This leads to a fast developing retail sector.
While every market / region has its unique offering as well as challenges, there are some lessons one can take:
1. Sector (and subsector) development – In Kenya, we can take the example of telecom sector. The involvements of government, from the PS to the regulator, the CCK and of course the four main service providers (whom I call lead players), have led to a vibrant sector. The learning and development has led to an ever evolving sector, with some global flagship products.
The retailers would still compete on their own front but the sector leaders play a greater role in ensuring better service and product standards, adherence to regulations and healthy competition. Allow me to take two other retail areas as examples that we can improve:
a. The fashion industry – We have some of the best fashion designers in the East Africa region. I have the privilege of getting some outfit from one. However, why aren’t these designs so common on the streets? Can they compete with the high street? Yes they can. Events such as fashion week help in raising awareness. However, other aspects to consider could be in branding and brand development (after all, fashion is mostly about brands!), franchising, concentrating on design while outsourcing the cloth making part to distribution in partnership with even stall owners.
b. Can’t we replicate the above telecom success in transport sector, and in this case the matatu sub-sector? In my opinion, this is a key Kenyan industry. Public transport is universal, but ‘Matatu’ is Kenyan! This sector can define the means of public transport! The goal to encourage matatu owners’ form companies / Saccos should be encouraged. The government should provide guidance and regulations required, including guidelines on competition, service standards and maintenance. Some Saccos / companies already exist with self regulations. The Saccos / Companies would then ‘teach’ code of ethics and service standards to individual players, which is a key area lacking now.
2. Involvement of ALL stakeholders. The engagement of public and private sector ensures everyone is working together. It should be a philosophy of consultation and engagement and not a case of “us” against “them”. A look at some areas e.g. Kenya’s public transport, the street vendors (hawkers), is usually a defensive approach.
Also, sectors (and sub-sectors) that don’t have ‘lead players’ should be encouraged to form associations / companies or Saccos. Fragmented sectors and players may not develop much, but as Swahili saying goes, “umoja ni nguvu”. Having umbrella bodies, not only ensures representation, but can help in developing towards improved service delivery and better performance.
This would also help in developing sector- based initiatives, which at an individual enterprise level may not be feasible, for instance exhibitions.
3. Flagship / unique offering – What would be flagship elements in different sectors? Every sector should be encouraged to come up with flagship products. For instance, Vuvuzela defined soccer in South Africa. Of course, different manufacturers produced it and sold in many different outlets.
4. Having a competitive global outlook from a local standpoint – as we embrace what others can offer and stock in our outlets, we should also be in a position to offer the world what it can embrace. This could be through customizing the above unique offering to both local and international markets.
5. Communication and creating buzz – no business can develop without communicating with the customers.
Overall, no single sector can develop in isolation. Hence, development of the retail sector will not only offer consumers wider choice, but also have multiplier effect on the economy.
For details, contact:
pauline@episodesresearch.com
www.episodesresearch.com
