Why Zambian retail should go digital

Sara Drawwater
Seller Success School
19 August 2020
Ecommerce truly benefits the many faces of retail in Zambia. It enables businesses to stand out and sell more by transforming customer experience. It reduces costs by empowering businesses to be less reliant on rental space. It opens up new opportunities for micro retailers.

We all understand the process of buying something physically. A business has a physical product in a physical location. A customer physically visits the traditional business and physically gives money to the business in a physical exchange for the product.

Ecommerce is digitalising as many of the physical aspects of the process as possible. Does the customer have to physically visit the shop to view a business's products? No. Does the customer have to pay using physical money? No.

Reducing the physical elements of shopping usually means more convenience for customers and more opportunity for businesses.

By adopting ecommerce businesses can stand out and make more money, reduce costs and benefit from new opportunities.

1. Stand out and sell more by transforming customer experience

The traditional physical shopping model expects a lot from customers. Each purchase requires a physical journey which costs customers time and money. They have to visit the physical location to determine what’s on offer and once they get there, there is no guarantee of availability of what they are looking for.

Additionally, prices in Zambia regularly change and can vary significantly. It would be a wasted journey for a customer if they travelled to a store only to find an item at a price they are not willing to pay.

Ecommerce transforms the customer experience because customers can know what's on offer, how much it costs and whether it's in stock before they commit any resources. They can browse up to date stock and prices from anywhere 24/7. They can make purchases when a physical shop would otherwise be closed. They can set delivery to when it’s most convenient to them.

Enabling ecommerce means customers can choose to visit a store if they so desire, rather than being forced to because they have no other option. By transforming the customer experience, Ecommerce will help your business stand out and sell more.

2. Reduce costs by being less reliant on rental space

Despite witnessing the mass construction of shopping malls, the reality is that many of these malls charge US$ rentals. Throw in a volatile Kwacha and a challenging economy and you have crippling costs, a recipe for failure and lack of access.

Established retailers are being squeezed by Covid related reduced footfall and the challenges associated with a weakened economy. As the Kwacha goes down the US$ rate goes up. This is unsustainable. The reality is that the traditional physical retail model is too costly for a growing number of established retailers who desperately need to reduce their costs in order for their businesses to survive.

There are also many faces of retail in Zambia, from the established retailer in the glamorous and gated shopping mall to the micro roadside seller. In between there is a sizable group of micro retailers who sell their creations and imports through social media and Whatsapp.

But the fact is, it is very difficult for the micro retailer to jump from their current routes to market to a shop in an established retail space. The traditional physical shopping model demands a sizable upfront financial commitment. Before a business makes a single sale they will have to pay rent upfront. And regardless of the number of sales made, the same amount of rent must be paid.

Ecommerce can significantly reduce the cost associated with traditional retail. Established retailers can reduce the number of costly physical shops by launching and growing a profitable ecommerce route to market. And micro and small retailers can enter the market and expand their routes to market more affordably.

3. Enable new opportunities for micro retailers

Retail in Zambia goes beyond the shopping mall because a significant portion of trade takes place in less formal markets. The ability for micro and small retailers to sell online affordably and effectively, dramatically increases opportunities for growth.

Of course, not every type of retailer nor every type of customer has access to a smartphone, electricity to charge their phone or access to the internet. Still, a significantly broader range of sellers can have a smart looking digital shop compared to an unaffordable physical shop in a mall. And a significantly broader range of customers can have a more positive user experience when shopping online compared to having to navigate the challenges of physical shopping from informal traders - finding out what they sell and how much things are, physically finding them to buy from them, paying them and arranging pick up or delivery.

There is a vast difference in shopping habits in a country like ours in terms of desired products and associated costs. Not everyone shops in a shopping mall all the time.

If a large proportion of traders can’t sell in a shopping mall, then it follows that a large proportion of people don’t necessarily want to buy what is available in a shopping mall.

As well as affordability some people simply want to support smaller businesses and access local producers and makers. These are often greener and cleaner products that are more effective in supporting the livelihoods of the local community.

When we accept ecommerce we better support the thriving, dynamic and multi layered retail sector that is found here in Zambia.

4. Reduce the spread of Covid-19

Nobody really knows what post pandemic life will look like in the long term. It remains to be seen how long it will take for the world and Zambia to control the virus enough for everyone to be safe.

In the short to medium term it is clear that we must accept a new norm of social distancing and reduced human contact. But it is very difficult to maintain social distancing when shopping in its traditional physical form. Furthermore, moving from aisle to aisle, choosing products requires people to touch products — something that spreads COVID-19.

Ecommerce definitely reduces the spread of COVID-19. It’s clear that to address Covid we need Ecommerce. When we have Ecommerce we address Covid!

Summary

To conclude, let’s recap on why Zambian retail should go digital.

  1. Stand out and sell more by transforming customer experience
  2. Reduce costs by being less reliant on rental space
  3. Enable new opportunities for micro retailers
  4. Reduce the spread of Covid-19

Remember that ecommerce doesn't have to replace traditional physical routes to market. But it can add powerful new routes to market and provide compelling reasons to embrace a new way of doing things.

How we can help you sell online

If you’re inspired to progress into the world of ecommerce, you don’t have to navigate these big changes by yourself.

Ecommerce is a fledgling sector here, so we’re committed to:

  1. Developing ecommerce solutions that cater to the needs of both micro and SME businesses. Micro sellers, watch this space!
  2. Creating a Seller Success School, an ecommerce knowledge base specifically for micro and SME businesses in Zambia, helping them transition into selling online successfully.
  3. Creating a safe space for business owners and managers to ask questions about ecommerce and stimulate discussion on the if’s, but’s, how to’s, costs, benefits, challenges and opportunities related to ecommerce.

Our ecommerce package is:

  • K4,176 including VAT for 12 months - online shop set up, content maintenance and promotion with no additional costs for new content like product or price updates
  • 9% commission per sale - includes transaction fees and bank charges so there are no additional surprise costs when you sell online.

Join in with the ecommerce movement on social media

Follow us on Twitter, Facebook, Instagram and Linkedin where we share all our latest updates and ecommerce tips and where we’re designing in public more and more.

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