Innovation and growth

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By Kerry Elliott – Retail Industry Expert, Trade Intelligence

The food retail sector in Kenya is among the most sophisticated on the continent. And by offering an exceptional shopping experience, it seems ready to take on the world.

With its strategic location on the Indian Ocean and growing access to resource-rich East African countries, Kenya enjoys a growing reputation as an East African market , a rapidly modernizing country with an expanding economy and a dynamic technology sector. But it is in the area of ​​food retailing that Kenya really shows its potential.

At 5.3%, Kenya’s projected GDP growth for 2023 supports the country’s economic outlook during an otherwise difficult time for consumers, with high inflation and drought putting pressure on households. As in other African countries, young people constitute an increasingly powerful economic bloc, and it is on their choices and purchasing habits that the future of retail rests.

This is a particularly connected generation in an already connected country: there are more active mobile connections than inhabitants in Kenya, or 63.9 million connections for 54 million people. “If there is anything that has had a huge impact on the lives of Kenyans, it is the smartphone. It revolutionized everything. Education, healthcare, banking, media, agriculture, transportation, communication and e-commerce all depend on the ubiquity of the smartphone to impact lives.“, explains Dr Lilian Wanzare, professor of computer science at Maseno University. Technology has revolutionized everyday interactions and transactions: since the launch of M-Pesa in 2007, mobile money has become the preferred way to make payments in Kenya, with 96% of Kenyan households having a mobile money account M-Pesa.

Food and grocery is one of the largest segments of the retail sector in Kenya, and its growth is steady: as the population becomes urbanized, the demand for the objects of urban living , including packaged foods and household items, is increasing. Several characteristics distinguish Kenyan retail from other, more traditional African markets – including the supremacy of local product ranges, the proliferation of promotions and an incredible shopping experience.

Formal retailers offer dedicated departments for butchery, bakery, pet care, pharmacy, some private label offerings, e-commerce and innovative retail marketing, product testing and, in case of a recent Carrefour pilot project, self-service checkouts. “Retailers are stepping up their efforts to provide customers with a better shopping experience For retain and retain customers and ensure that they return to shop in store,says Eric Kinoti, senior managing partner of Nineyard Consulting Group.

But Kenya excels in more than just the basics of 21st century of retail. “Kenyan retail offers some of the best shopping experiences around the world“says Kerry Elliot, senior executive at Trade Intelligence, a leading retail research firm.”Llocal retail chains continued world-class in-store execution in the form of revamps with new in-store lifestyle layouts and modern interiors.»

These add-ons come at a cost, but in a landscape where buyers are increasingly demanding and competitors offer similar value, the “wow factor” is a necessary investment. “THE The wow factor may be why shoppers choose one retailer over another; And typically, Lifestyle categories may be areas of value-added products or services that can offer enhanced margin opportunities,” Elliot said.

The success with which Kenyan retailers are meeting shoppers’ need for experience is not a happy accident of Kenya’s vibrant retail culture. This is where the pedal of the country’s digital development meets the metal of commerce. “Buyers, farmers, brands, partners and collaborators are increasingly connected through data and information,» explains Elliot. “As mobile technology evolves, they are increasingly able to share and exchange ideas or develop joint campaigns with the ultimate goal of meeting buyer needs.»

Trade Intelligence has just released a report on the trends shaping Kenya’s retail sector and will present key insights at the Kenyan Retailers Association (RETRAK) forum on October 17, 2023 in Nairobi. For more information on Ti’s Kenya retail intelligence reporting, see here.

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