Retailing as a process has not been properly understood and greatly explored on this side of the world, and in my context, Africa. Take chocolate for instance, 75% of the world’s cocoa production is facilitated by Africa and yet it only receives 5% of the over 100 billion USD annual revenue. This clearly is a result of a lack of understanding of the enormous merits of retail or retailing and its utilisation. The inability to produce cocoa-extracted goods is not the causative factor for this menace but rather the inability to get the cocoa-extracted products to consumers in this side of the world and to other parts of the world as well; hence Africa is compelled to export the raw material instead of adding value to our cocoa and producing products which can be exported. If retailing can be explored to the peak and a clear roadmap drawn where cocoa-manufactured products can be made available to end users or consumers on the world market with little stress or without any stress, Africa can benefit massively.
Retail is explained to be the sale of goods and services from businesses to end users to satisfy their needs or demand. Retailing on the other hand is the distribution process of obtaining products and reselling to customers for use. Getting products from manufacturers to customers (End Users) requires an effective supply chain. A supply chain is a system involved in moving a product or service from the manufacturer to the customers. The supply chain consists of manufacturers, distributors, wholesalers and retailers. Distributors purchase products or product lines from manufacturers and resell them to wholesalers. A wholesaler is an intermediary entity that buys in bulk and resells to retailers rather than the customers directly. Retailers are at the end of the channel in the supply chain and hence are solely responsible for the direct sale of goods and commodities to the customers.
Recent years have seen surging investor interest in sub-Saharan Africa’s retail and consumer sectors. Whereas the focus was traditionally on extractive industries such as oil and mining, a growing consumer class demanding everything from mobile phones to fast food have provoked many retail companies in Africa to look extensively at opportunities on the continent. With this retail expansion in Africa, consumers tend to be geared towards modernized and technologically engineered commerce, good customer service and excellent customer satisfaction in relation to brand and quality.
Retail business in Africa is not excluded or unique from challenges suffered by small and medium-scale enterprises (SMEs). These challenges include high inventory costs, high rental costs, high taxation, lack of business management skills, inability to market products, strict government regulations, unavailability of business data and insights, insufficient human resource, theft and finally competition from other retail businesses.
Amidst all these challenges, there are ways retail companies in Africa can thrive. A retailer must have a deep understanding of the local market. Unfortunately, we’ve seen too many multinationals take their retail businesses into Africa without a deep understanding of local market dynamics, skills and conditions. They assume that success is a sure thing due to Africa’s population, and as a result, their strategies turn out to be too broad and target growth projections rather than what the market actually needs. Such understanding is critical but equally important is knowing where your own strengths lie and matching these capabilities to the local market.
Also, an emerging or existing African retail business must think globally but operate locally. Once a company has identified its target markets, it will need the right people on the ground to execute its strategies. In many of Africa’s labour markets, companies will need to develop their labour with the skills needed to run their local operations. They should start by embedding a core team of home-country experts who understand retail dynamics to oversee the new business giving out their best business and customer management practices.
Sumundi is a retail accelerator working with retailers of all sizes and supporting them with digital tools to help them with the fundamentals of managing their businesses. Sumundi on the other hand is helping resolve most of the challenges retail businesses come across. With the amazing technologically engineered ways of running a business, most of the challenges such as unavailability of business data and insight is curbed, that is, transactional data, sales information, accounts, reports and business trends are made available to the shop owners with ease. With the Sumundi Keepsales software, retail business owners are able to get the aforementioned data to permit informed judgements. In addition, human resource issues and theft are woefully eradicated or minimized to the lowest acute level because Keepsales allows retail business owners to manage shops and control inventory even when not physically present at shops or business centres. Also, Sumundi helps retail businesses obtain financing which vehemently helps the businesses grow in size and increase their sales. The availability of such financing vehicles helps retail businesses deal with huge inventory and other huge costs involved in running a business.
In conclusion, retail business in Africa is just about to explode and African legislators have to take steps in rolling out a roadmap to ensure the export of value-added products instead of exporting raw materials. Retail businesses act as marketing tools for brands, serve as supportive tools for end users to communicate important information and also have the capability to contribute to the GDP of the economy by providing jobs. With all these benefits and Sumundi in the picture, retail businesses in Ghana and Africa at large are assured of easily accessible financial, technological and logistical needs which will help their businesses grow locally and globally.
