First it came for the Banks, next up is Kenya's Retail

15 January, 2018

From WalMart's "Scan & Go", Amazon's "Amazon Go" to Kroger's "Scan, Bag, Go". The era of Self-checkout or cashier-free shopping is now with us. Coming soon to a Kenyan Supermarket near you.

The Long Lines

When you get into the supermarket, if you are like me. You want to spend the least amount of time possible, to pick the things you need, spending the least amount of money possible while at it.

These, I learned, are exactly at odds with the objectives of any supermarket.

Many shoppers have always loathed the often long slow lines at the supermarket. It doesn't help that Kenya is largely a consumer market and everybody works with end month dates for shopping.

I always thought Supermarkets should have employee contests during these peak times of the month. Where cashiers competed against each other with performance evaluation primarily based on speed, and accuracy.

I also hate how supermarkets always seem to know how to place the things one really needs on far-flung opposites across the supermarket all in an endeavor to get you, the buyer, to check out other merchandise as you prance along to pick what is on your shopping list. This was before I learned that this is really the art/science behind sales maximization in supermarkets.

First it came for the Banks

The above scenario, however, was no different for Kenyan banks a short while ago.

About 20 years ago Kenyans were largely un-banked.

Our Parents had to travel long distances to visit the bank. Normally one had to take leave or an off day since bank day tended to be a whole day.

Often at the mercy of the banking institution, the banks had no pressure to innovate or value for their customers. One time Barclays Bank of Kenya invited account holders with amounts below a specified threshold to withdraw their monies or risk losing it and thereafter closure of their accounts.

Then came Equity Bank, and a short while later, Mpesa. Kenya topped global charts for the most banked population at 75 percent in 2014, above the global average of 62 percent.
Banking was never the same, rapid changes inspired by strong technology innovations took center stage.

Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services.

Soon mobile applications such as Branch, Tala & Mshwari were disrupting the credit space where banks made their profits. And just when they thought the worst was surely over, came a sweeping policy change of interest rate caps with strong political undercurrents, this was surely the last nail in the coffin.

C-suite bank executives were sent back to the drawing board. First, came the cost-cutting, with huge cuts on the wage bill as many junior level employees went home. Mostly Cashiers.

Huge bets now being placed on technology innovations such as digital banking. Most Banks are encouraging their customers to download their mobile applications to perform simple transactions such as; checking their account balances, making withdrawals, money transfers to name a few, on their phones.

Next up is Kenya's Retail

For Kenya's retail sector, its the same script but different cast.

First came the e-commerce companies, Jumia, Masoko, Kilimall & Rupu the impact of latter two having waned in the past year. Most local brick & mortar retailers never gave much thought to this, however in this earlier article we sounded out a warning.

Tuskys, took our advice, partnering with Jumia to great success for them on this front. Nakumatt is a sad story, we talked about it here too. For Naivas we don't yet have the numbers however estimates have them lagging behind Masoko which debuted in December last year.

However observing recent efforts by Amazon, Walmart & Kroger to improve & scale their self-checkout systems. This signals the end of Supermarket cashiers. This will soon be in Kenya.

Here at Seed, we've already learned of a mobile application being piloted with select retailers here in Kenya. It will enable Kenyans to shop at their favorite local stores from their phones with a choice to self-collect the packed shopping or opt for delivery to their home. We will share with you more soon, so keep it here.