Fostering business relationships, to enhance profits

• Shop to shop concept Businesses are pushing harder than ever to improve their services and products in order to grasp and maintain customer loyalty. Some are lowering prices to ensure a good perception and to keep new customers flowing in. Others work on customer service issues. Yet, all of these measures, without flexibility and creativity, do not ensure customer satisfaction. So what do businesses do to fulfill their customers’ ever changing needs? Nakumatt seems to have answered that question and embraced connectivity with other businesses in a bid to be the regional leading supermarket. The supermarket employs a new business approach, the ‘Shop N Shop’ concept. According to Joseph Ndungu, when the shop first opened they realised that they did not stock all the services and products that their customers seemed to want so they decided to introduce this new approach. They needed to form new mutual benefit business partnerships with businesses that offered quality goods and services such as their own. “At Nakumatt, we desire to fulfil our customer needs. Initially, with our other branches we noticed that customers required products and services that we don’t traditionally offer as a supermarket. We realised that since we could not provide these goods and services internally, we needed to bring in other business that could do it on our behalf.” Ndungu points out that they realised that they needed to develop mutually beneficial businesses relationships with local suppliers. To provide an opportunity for the suppliers to bring their products to the customers and to give Nakumatt a chance to provide a one stop shop service to their customers. Under this arrangement Ndungu says they have been able to have ATM services to their customers in other branches in Kenya and they hoped to translate the same here. “Through this approach we are able to bring variety to our customers at almost no cost to us. The traders bring in their own attendant for their particular stands and they pay a varied commission based on their sales. The only cost we cover is maintenance and lighting. As a supermarket we provide a good marketing front for these traders since the more they sell the more commission for us. It is a symbiotic relationship.” Ndungu points out that through the shop to shop approach they are able to have butcheries, bakeries, phone shops and other mini shops within their supermarket. He remarks that the commission is dependent on the cost of the products. He adds that for products that take long to sell suppliers do not invoice Nakumatt until their goods are sold sometimes it can take even be six months but its better than having their products in warehouses. “We have been able to provide to our customer’s things that we could not previously and this is thanks to the partnerships we have formed and maintained with the right traders and supplies. Taxes are deducted from the supermarkets overall earnings.” Ndungu remarks. Some of the suppliers that have been able to display their products within Nakumatt include Basco paints, LG, Darling Braids, among others. Maria Karanja has a curio shop within Nakumatt and she says that she is able to make more sales than she could ever make in a separate shop. “I sell African bags, sandals, bangles and curios in my stand. I don’t have to market my products since customers can see them as they shop for other things. The Supermarket ensures that my products are safe. Since Nakumatt is open 24 hours a day, I am able to make good sales.” Maria remarks that since she has a multi lingual attendant on her stand she doesn’t have to spend a lot of time in Nakumatt and hence she concentrates on stocking up the stand. “I have an agreement with Nakumatt so at the set time they send my sales amount to my bank account after they deduct their commission.” Maria says that her business relationship with Nakumatt has also ensured extra sales at very little cost on her side. “All my products are bar coded and hence at the end of the month a computer generated form will indicate all my sales. Nakumatt Kigali is the first in this region and hence management endeavours to increase ownership among the people. “Within the Shop N Shop concept we are able to create a feeling of ownership among our people. Suppliers are able to work together as they satisfy people’s needs. This helps in boosting the local economy,” Ndungu explains. Like any other business approach the Supermarket is faced with different challenges that come with introduction of more players within one shop. “Sometimes our quality services are not translated to some of our suppliers who operate under our supermarket. This sometimes can communicate a bad message to our customers. We however try to train all shop attendants together so that we can improve the quality of our services.” According to Ndugu, the supermarket stands at the heart of Kigali and has over 25,000 square feet display and plans to expand are still underway. Business need to develop and manage complex relationships so as to succeed and to be able to continually meet their clientele needs. Email: pgathoni@gmail.com