- August 18, 2020
- Posted by: simba001
- Categories: Reatil POS Insights, Uncategorized
Starting a retail business in Kenya is a popular consideration for many people looking for a side hustle or a retirement investment. However, many retail business close down within an year of opening due to the highly competitive nature of the retail sector. In order to succeed in the retail business, below are the 5 keys to success.
Starting a retail business in Kenya is a popular consideration for many people looking for a side hustle or a retirement investment.
Proximity to target market
When thinking of starting a retail business in Kenya, you must consider pointers such as whether your target market segment resides around or frequent your business location, can they easily access your premises? Is your environment of operation localized or are you a solitary retailer?
Retail business sector has one of the lowest profit margins, globally. It’s therefore important that you carefully consider your pricing strategy in order to make an informed decision. There are many different pricing strategies you can adopt for retail business in Kenya. But ultimately it comes down to between two alternatives. Will you either opt for premium pricing or will you go for economy pricing . Each comes with its own advantage and disadvantages- you just have to know your business objectives.
However, many retail business close down within an year of opening due to the highly competitive nature of the retail sector.
The Retail sector is essentially a commodity sector and as such, a savvy retailer must ensure he/she is able to get the required products at the best price and at the right time. It’s therefore critical that as a retailer, you select the best distributors/suppliers who will not only ensure that you have all the products you need but also guarantee reliability. Suffice to say , you must also pay the suppliers on time or as per agreed terms to maintain good relationships.
The importance of smooth and efficient operations cannot be understated especially for retail business in Kenya. The nature of retail business requires military precision and efficiency. On the customer side, items have to displayed properly and labeled accurately to make the shopping experience enjoyable. In terms of billing, a retailer needs a reliable and quick POS System to ensure the checkout process is hassle free. For general operations, a successful retail must have proper protocols for security, receiving stocks and fraud prevention. You should always be looking to do these things and more; realizing economies of scale, optimizing floor plan, digitizing functions and bench-marking performance.
In terms of billing, a retailer needs a reliable and quick POS System to ensure the checkout process is hassle free
The retail market in Kenya still has a lot of opportunity for new entrants. The middle class is growing and general per capita consumption is increasing. A quick look at the retail sector also indicates that some bigger chains like Nakumatt and Tuskys have either collapsed or experiencing life threatening challenges . Most challenges facing the retail sector can be solved with proper planning. This can be done by incorporating data collection and analytics to help in forecasting. You can edge your competition by knowing spending patterns, foot traffic vs actual counter transaction, etc. Information such as these will help you have optimal staff numbers and adequate stocking at all times.