Retail is important as a route to market for products, but it is also the visible face of a company and its brand.
It’s vital to ensure that consumers not only get the best possible exposure to products, but enjoy an exceptional customer experience as well, says Yugen Naidoo, consumer business group lead at Lenovo SA.
Naidoo ensures that consumers have access to the range of Lenovo products in the way that make sense to them. His team manages the retail channel, the education sector, the telecommunications channel and small resellers who acquire their products through distribution. These distributors are Pinnacle, Axiz, Mustek, Rectron and Tarsus.
Lenovo’s consumer products include all-in-ones, desktops, notebooks and tablets.
The team of three account managers, a product manager and an operations manager. A further team of field account managers is contracted to Lenovo to look after the retailers in the regions, and an agency manages in-store promotions and customer touch activations.
Lenovo places a lot of emphasis on its retail presence, recognising the important role it plays in overall perception of the company.
“There is a huge evolution in retail,” Naidoo explains. “We are going through a new Industrial Revolution in the way the consumer think and purchases products. At the same time, there is fierce competition between the vendors.”
The first challenge is inn getting consumers into the store in the first place, and Naidoo believes that event shopping – in-store festivals or holidays like Black Friday – are becoming more important for retailers to get customers in the door.
In addition, a lot of feet are being driven through the door by attractively-priced low-end products.
The next challenge is how to influence the customer’s buying decision. “Most consumers do their research online and they go into the store already knowing what they are going to buy,” Naidoo explains. “Although 60% of the decision is made in-store a lot of forward planning and thinking is done either online or through the experience of an influencer.”
So education and upfront marketing are as important as the in-store experience.
“A lot of decisions are being driven by education, which we didn’t have to worry about in the past,” Naidoo points out.
Once a customer is in the store, retailers want to maximise the sales opportunity, and the vendor wants their product to be the one selected.
“So the salespeople in the retailer have to seize the opportunity to upsell or cross-sell. And to do this, they have to really understand what the customer needs.”
Getting in-store salespeople to sell a particular product is never easy. “So we have to do a lot for the retailer in terms of enablement,” Naidoo says. “There is a high rate of attrition among staff in the retail store, so it’s hard to keep the salespeople interested in your product.”
Lenovo has embarked on a series of countrywide roadshows aimed at touching the sales staff at the various retailers, and to give them the knowledge and skills to maximise every sales opportunity.
“The relevance of the brick and mortar retailer is based on the customer’s in-store experience. If you aren’t treating the customer well, they won’t be back.
“That’s why you will see a lot more emphasis on sales experience.”
This is so important that Naidoo believes the future of the retail model will depend on it. “The people in-store have to live their brand. But the reality is that retailers don’t have the strongest salespeople instore – and that’s why we get involved with promotions and other in-store activities.”
Online is also moving quickly from the place customers do their research to becoming the shopfront as well. “Young people have grown up with smartphones, they are the connected generation,” says Naidoo.
“There is huge online penetration now, and a lot of stores have been driven out of business by online retailers. The sector is in a very volatile state right now.”
South African businesses are still nervous about buying online because of perceptions around security, but the online generation doesn’t have the same concerns.
“The new generation is not afraid of online; they know they have to invest in IT.”
The penetration of online retail in South Africa is currently about 7%, and is expected to double by the end of 2018.
But brick and mortar stores are still very important to the vendors, Naidoo points out. “Retail is the image of the product that we show to the world. It’s where you present your brand.
“Retail allows vendors to tell a story or impart a message about why customers should buy your brand. And this means we have to create a different experience for customers.”
This is what Naidoo calls the “Uber effect”, the different experience that is outside of the conventional box.
“You are going to see a lot more of the experience being driven by the retailer,” he says. “This could be in the form of always-on connectivity, or social media activity to get the consumer attached to a brand.”
Brand loyalty is hard to build, but it’s important to have. “In the future, investments in brand loyalty will pay off. There are a lot of ‘white boxes’ on the market, so we have to constantly re-invent ourselves to stay relevant to the consumer.”
Lenovo South Africa is in a great position to do this, Naidoo adds. “The culture of this company is around its entrepreneurial spirit. We are a free-thinking organisation; people are encouraged to apply their mind and then make things happen – we don’t have to wait for corporate policy to be changed. This gives us the ability to move a lot quicker than many other vendors, and we can adapt quickly to changes on the ground.”
This is what the local team has been doing. On the back of a brand-building exercise, Lenovo SA has also been innovating and changing its value proposition.
Consumers can expect to see some exciting new campaigns around the Lenovo brand in the very near future. “We are working on a number of value propositions that will give consumers good reasons to buy our product – we are going to make them think very differently about their purchase,” Naidoo says.
“None of our competitors are offering what we are bringing to the consumer market.”
Lenovo is also investing in business analytics to help it manage the channel more effectively. “Bringing the right product into the country has been a big differentiator for us. We used to bring in just the high-volume products, but analysis showed us that we should offer the full range. And there is huge demand for it, which is great news.”
By giving customers what they want, and ensuring they have a great experience with that product, Naidoo believes Lenovo is starting to create a high level of brand loyalty.
“People are still loyal to brands, and they will start to build an ecosystem around that brand. This is what we are driving, to invite those people into our family.
“And retail is the window through which we will make it happen,” Naidoo explains. “We are a very important part of the value chain from an ecosystem perspective.”
It’s been an interesting journey, Naidoo adds, and Lenovo has been successful in growing its market share. “I attribute a lot of our success to the people within the company being focused on their goals; and to using data analytics to bring the right information and the right product to users are the right price point.
“I am really excited about the supply chain, about our business partners, and the journey we are all on. We have had some tough times but we continue to innovate.”
Retail is certainly not an easy market at the moment, Naidoo adds, and it’s getting tougher every year. “You have for to be ready for anything, agile and flexible so you can innovate. If not, you will just be part of the crowd. Our motto is to stand out from the crowd.”
Tapping the education market
Almost 10-million South Africans are at school today, so the education market is a massive opportunity for any vendor.
Lenovo is addressing this market by packaging solutions that are relevant for students at different phases of their education.
“We are creating different packages in the form of a solution in a box that includes everything the student will need,” Naidoo explains. “For instance, a package could include a tablet, earphones and a calculator.”
The company is working hard to penetrate the education business, and is partnering to get its product offering in front of students.
“We are trying to make our product different from the run of the mill; we want to be seen as a cool brand,” says Naidoo. “So we are working with partners to showcase the offering at place where students go.”
As an example, a recent Yoga promotion took place at a mall and involved people doing yoga in live window displays.
“We have to come up with smart ways of marketing to the consumer,” Naidoo says. “We have to keep thinking about the cycle and the evolution of the customer; understand there are different generations and make sure we are talking to the right people.
“Above all, we have to stay cool and exciting.”