The Kenyan retail market is growing increasingly complex. On one hand, trade is evolving, with online retailers and newer channels gaining in prominence. On the other, trade remains resiliently traditional, although with some modernisation. In such an environment, it’s critical that brands use the best execution methods for each channel in order to meet their targets and maximize the return on their investment.
Given the complexity and fluidity of the Kenyan retail market, we recently hosted an event in Nairobi focused on providing attendees, who were mainly sales professional from manufacturers and retailers, with an understanding of how they can optimize their sales processes so they can plan and execute their sales strategies with precision.
Jacqueline Nyanjom, Sales Effectiveness Lead, East & West Africa, kicked off the event by providing an overview of Kenya’s retail landscape and where it’s headed. Jacqueline described the changing retail landscape and identified several emerging themes that manufacturers and retailers need to keep in mind when planning their sales strategies. While traditional trade is still growing in Kenya, she noted that we are also seeing growth in specialty stores. Notably, foreign supermarket chains are investing in the market, and mobile e-commerce is growing in the country. Against this backdrop, Jacqueline stated that Kenya posted fast-moving consumer goods (FMCG) growth of 3.5% in 2018, which was mainly driven by small players and local manufacturers that are expanding their reach. In such an environment, optimizing sales execution strategies is critical for growing share and driving business growth.
But the changes involving category and channel shifts have broader implications, particularly around distribution, which Terence Colle, VP, Sales & Marketing Effectiveness, Africa, Middle East, & Eastern Europe, addressed after Jacqueline’s discussion, specifically in terms of ways to improve performance. The sales journey begins with identifying the right location and reaching the right stores. In Kenya, 11% of stores account for 50% of sales. We call these stores the “Gold Stores” for brands, and ensuring they are part of distribution plans can immensely boost sales for a brand. Terence discussed how we can optimize distribution strategies, by providing real-time data analytics, market prioritization, census, satellite imagery, mobile technology, among other solutions, to get products efficiently and successfully into the right stores.
No event about retail would be complete without a deep dive into product mix, shelf assortment and pricing. For this angle, June Sadya, Sales Effectiveness Lead, East Africa, and Raphael Nduyo, Analytics Lead, East Africa, led a session focused on how clients can maximize category demand while minimizing out-of-stock situations. Specifically, June and Raphael discussed how having the right product available in a store can boost sales volume by as much as 15%. Using assortment and space optimization tools like Spaceman and Planogram clients can understand the right balance of products in their category and how they are performing against the competitors’ brands.
Pricing is equally critical when we speak of an effective sales strategy. In Kenya, more than 70% of FMCG transactions that occur involve consumer spend of less than KES 55 (55 Kenyan Shillings), and the bulk of the transactions take place below KES 10, followed by KES 50-55. Raphael discussed how executing with the right price and promotion strategies can help clients drive significant incremental sales, ensure investment in promotions with higher ROI, and avoid brand equity erosion.
All in all, the event helped attendees uncover key sales strategies that they can use to create the perfect sales process, which will help them reach the right stores with the right execution and grow their brand.