For any brand manager, sales director or senior executive, this should be a relatively simple question: Do you know how your stock keeping units, your SKU’s, are performing?
In modern retail, the answer is often “yes”. Sales reports, point-of-sale data, stock movement, pricing and market share information provide management teams with a relatively clear picture of what is happening to individual products.
But what happens when your products enter Africa’s traditional trade?
For many businesses, this is where visibility disappears.
Africa’s Two Retail Economies
Across Africa, two very different retail economies operate alongside one another: modern trade and traditional trade.
Modern trade consists of supermarkets, hypermarkets, formal convenience stores and organised retail chains. These businesses generally operate sophisticated point-of-sale systems, maintain detailed stock records and have structured supply chains. While the brands and retail groups may differ, modern trade is remarkably similar from one region or country to another.
Traditional trade is very different
It includes independent retailers, informal shops, kiosks, market traders, neighbourhood stores and thousands upon thousands of small outlets serving local communities. In many African markets, traditional trade is considerably larger, and more influential, than modern trade.
Yet, for many business managers, traditional trade is something they know about but seldom had any direct contact with.
It is often discussed in boardrooms, included in market reports and referenced in route-to-market strategies. However, the reality on the ground can be very different from the assumptions made at head office.
Traditional Trade Is Not One Market
One of the greatest mistakes businesses can make is to view traditional trade as a single, uniform retail channel.
The term traditional trade covers an incredibly broad range of outlets and trading environments. The nuances of traditional trade in East Africa may be completely different from those found in West Africa or Southern Africa. Even within an individual country, trading behaviour, supply relationships, pack sizes, pricing, credit arrangements and purchasing patterns can differ significantly from one region to another.
Unlike modern trade, there is no standard traditional trade model that can simply be applied across Africa.
There is, however, one common characteristic: record keeping and reliable retail data are virtually non-existent.
Once a product leaves a formal distributor or wholesaler and enters the traditional trade, many companies lose sight of it.
Where is it being sold? How quickly is it moving? Which pack sizes are performing? Which competing SKUs are gaining ground? Is the product consistently available? Are there distribution gaps? Is pricing affecting sales?
Without accurate information, these questions are extremely difficult to answer.
You Cannot Develop a Strategy Without Data
The lack of reliable information from traditional trade has a direct impact on business decision-making.
Without accurate, ground-level data, meaningful growth strategies are difficult to envisage, let alone implement.
The same applies to route-to-market strategies.
How can a business optimise distribution if it does not know where its products are available? How can management identify growth opportunities without understanding SKU performance at retail level? How can a brand improve market share when it cannot accurately measure what is happening in one of its largest retail channels?
Assumptions are not data.
And in the diverse and complex markets of Africa, assumptions can be expensive.
Frontline Research Group has the Data Management teams need.
For 30 years, Frontline Research Group has been working in African markets, developing an unparalleled understanding of traditional trade and the realities of retail on the ground.
Over this period, Frontline Research Group has accumulated extensive historical market and retail data.
More importantly, FRG is currently tracking thousands of SKUs across the major economies of Africa, with particular expertise in the beverage industry.
This ongoing retail tracking provides management teams with visibility into markets where reliable information has traditionally been extremely difficult to obtain.
It allows businesses to better understand how individual SKUs are performing, identify changes in the market, monitor competitive activity and make more informed decisions about distribution, growth and route-to-market strategies.
And this data is readily available.
Do You Know What Is Happening to Your SKU’s?
Companies can purchase Frontline Research Group’s historical data as a once-off investment, providing valuable insight into past market and product performance.
Alternatively, businesses can join one of FRG’s many ongoing syndicated retail tracking panels currently underway across Africa.
Syndicated research provides companies with access to ongoing market intelligence at a fraction of the cost of commissioning an independent retail tracking study.
The result is something every management team needs: accurate information on what is actually happening in the market.
So, the question remains:
Do you know how your SKU’s are performing in Africa’s traditional trade?
If the answer is no, the data may already exist.
For more information on Frontline Research Group’s historical data and syndicated retail tracking studies, contact Art Janse Van Rensburg at art@frontlineresearchgroup.com.
