Naivas is one of the family businesses in the retail space that has arguably managed to keep its operations professional, bringing on board talent to scale up the business. To date they boast a network of 56 branches across the country.
Naivas’s growth trajectory in the short term involves increasing the count of its branches in strategic towns across the country and scaling up the food market concept it pioneered with a maiden branch at the Capital Centre on the Nairobi- Mombasa Road.
They have borrowed the food market concept from some of the world-famous supermarket chains like Italy’s Eataly and America’s Wegmans. Studies increasingly show that customer experience is becoming the differentiator in the retail space.
The Business Daily had a conversation with Naivas Chief Commercial Officer Willy Kimanito find out why investing in the food market concept remains one of the key growth areas for the chain retailer, how it is warding off competition and its future plans.
How has Naivas managed to position itself as one of the leading retailers locally?
We decided early on to focus on what the customers wanted, invested in research to understand the people we wanted to serve and structured the business to respond to their needs. One of the key aspects we learned in the course of our research was that convenience mattered greatly to shoppers and thus over the years we have strived to offer as much of this as possible in as many ways as we can, including establishing branches in easily accessible locations, designing interiors for better navigation, shelf arrangements for easier reach and payment processes that are fast and secure. For those who prefer to shop online, we have set up a fully-fledged e-commerce site.
Naivas is set to go big on the food market concept it pioneered in 2017. Explain the difference between regular Naivas stores and the food market outlets?
As the name suggests the food market is designed in a way that the departments dealing with fresh food are allocated 25 per cent of the overall store size. This is more than double the normal allocation in other standard supermarkets that give such sections just 10 per cent of the store area.
Why does this remain a viable strategy?
The food market is a unique selling proposition for us. This is because research has shown that more than 60 per cent of shoppers visit shopping areas for food items. Of course, we must consider the general population that one food market serves. So far it is encouraging to note that our food market model is now working as a general industry standard as other retailers also embrace it.
How many branches of this kind are in the pipeline?
We are working with local design firm Renova Limited to bring on board three additional stores of this kind soon. We are firming up two new food market stores to be located around the residential areas of Yaya Centre and Syokimau and Mombasa. We are also refurbishing the Mountain View Westlands branch. We plan to have another branch of this kind in Nyali, Mombasa.
Is implementing the food market concept capital-intensive?
The approach we have taken is to infuse the store with an attractive interior, featuring well-lit large areas, a wooden feel and modern shelving that keeps the produce fresh. Our experience is that this means we incur nearly 40 per cent more in capital expenditure to achieve this. Besides, setting up a new branch is not easy. It takes a lot of time, money, due diligence, market research and the discussions can be fluid if there are extraneous factors that will determine the set-up and eventual success of the branch. As such, we make annual plans for expansion.
Studies show that customer experience is becoming a key differentiator in the retail industry. Is this why the food market strategy remains an integral part of the retailer?
It is interesting because human beings generally like to be spoilt. We all relate better with a person or an organisation that pampers us and treats us with respect.
The same is true for the retail business. In addition to outlet location, design, product availability, affordability, general layout and customer service, we believe that data is an emerging tool for us to learn and serve our customers better.
How is Naivas planning to deal with the growing competition especially from foreign brands and the local brands that have financial muscle?
We believe competition is healthy for this economy. At the end of the day, it is the customer who benefits. But Naivas does not fear competition. We are confident that we have a great product and have over the last two decades built an excellent, family brand. Any competitor coming in now has a great task ahead of them. Kenyans are said to be peculiar and that also goes for their shopping tendencies. It takes time to learn them, gain their trust and loyalty.
We are grateful that over the years we have been able to reach and build relationships with customers and suppliers.