My Thoughts on: Retail, Spending Patterns and the New Way to Shop.

Following tonnes of conversations we’ve had with our over 500 retailer partners here at Lipa Later, we noticed that so many of them had the same questions about what is going on in the ecosystem and what Lipa Later is doing about it. We sat down with our Head of Business, Claudine Gakundi to get a better understanding of what she believes matters now and what Lipa Later is doing for the ecosystem. Below is what she had to say. 

1. What kind of consumer shopping trends have you noticed since Covid-19? 

Having worked with hundreds of retailers since Lipa Later’s conception, I must say there has been a slight shift from some of the previously most popular products such as phones and home theatres to more ‘work from home’ and home improvement related appliances such as cookers, fridges, TV’s, laptops and furniture. Internally, here at Lipa Later we have dabbed some of these ‘Covid-19 Essentials’ the “Stay at Home Kit”. Majority of our customers are spending most, if not all, of their time at home due to the country’s lockdown and social distancing efforts. In hindsight, it makes a lot of sense; Who would want to be stuck in a house that is not comfortable and self sufficient? Lastly, we have also seen a lot of what we are calling ‘dual purchases’. Some common dual purchases we have seen people buying are; cookers and fridges, beds and sofas, TV’s and laptops.

2. What are your thoughts about the future of consumer shopping and payments post Covid-19? 

Actually, we are already seeing it happening now, not in the future. We have experienced a spike in two major aspects of our company; increase in credit demand as a payment option and delivery. This has led to us adjusting to our customers needs by ;

i) Approving them for their maximum credit limit - With the launch of our new website and client portal, clients can now sign up within 3 - 4 minutes and get an instant approval for their maximum credit limit. Instead of increasing our customers purchasing power for just one item, we give them a credit limit that they are able to use over time without the hassle of signing up every time they want to purchase a product through Lipa Later. And the credit is revolving, once you make payment, we reward you with a top up.

ii) Online purchases and delivery - A number of our clients and retailer clients are requesting for online and delivery services to avoid going to the stores and exposing themselves. We have therefore collaborated with our retail partners to ensure this is being done seamlessly. For the retailers who are not able to do delivery, we organize for the same internally. Customers are now able to shop from anywhere, get quality products delivered to their doorstep and pay monthly. 

The world is tipping towards paying for almost everything monthly, it’s time all retailers jump on this bandwagon. We are here to help, retailers can visit our website, sign up easily and cater to your changing clientele. 

3. In light of the current pandemic, consumers are avoiding spending due to the prevailing uncertainties. The solutions would be shopping on credit and spreading the payments over time. However, a section of consumers view credit as a poor money decision. What are thoughts about the mis-conception and your take on using credit?

I honestly never used to be a believer myself. Until I got into the adult world and started having a lot of responsibilities. At that point I realized three things; 

i) It did not make sense to me as to why people should struggle and save for 3 or so months to get something that they need (not want) like a smartphone. In my line of work, I need to be in communication with partners, online studying trends and consumer behaviour etc. All these things I needed to do now, not later. And if it’s affordable, why not!

ii) Cash flow management, our product works for people of all backgrounds ; rich and low income, old and young ; but it’s not because people do not have the money to pay for products upfront, it’s because they want to manage how they spend their money on a regular basis. This helps them in terms of liquidity and having spare change in case of unexpected events or emergencies. 

iii) It’s okay to be comfortable and live the lifestyle you want (within your means of course) - There is a common misconception in Kenya that you have to be absolutely stringent with the things you purchase so as to save. I am not saying that this is a bad thing, but why struggle when you can purchase in affordable installments the things you need to make your life comfortable? Life is for living, live a lifestyle that you are happy with and that is not constraining you financially. Live affordably. 

However, as a consumer, you need to be keen on a few things just like any other partnership you get into, in this case it is a financial partnership;

i) Interest rates - Are the rates being offered reasonable? 

ii) Will the monthly payments be a financial burden or a financial lifeline? 

4. Based on your experience working with retailers, what must retailers do to stay alive, survive and thrive during unforeseen economic crises as the current pandemic? 

On my previous blog I published, the key things retailers need right now are;

i) They need to offer a payment plan to their customers and foster strategic relationships - With Lipa Later as a partner, retailers can sign up instantly and we’ll have Lipa Later as a payment option for your customers in no time.

ii) Going online & enlisting on marketplaces - Although it might take a lot of time and resources, it is inevitable for most retailer’s growth. 

iii) Offering in demand products in their industry during this time. 

5. What is Lipa Later doing to help retailers during these uncertain times?

The most impactful thing we can do for retailers now is work closely with them to boost their sales and revenue. Their sales are taking a hit because most Kenyans are losing their purchasing power to buy things in cash. We had to shift and pause some of our objectives when the pandemic hit and refocus on the best strategies to implement for our retail partners with our retail partners. We have a brilliant team of account managers that are appointed to manage and grow our retail relationships and with the support of our sales team, we were able to boost their sales (purchases through Lipa Later) from 20 to 30 % to an average of 40 to 50%. This was largely contributed by the fact that consumers were turning to us for credit rather than buying in cash. 

6. What have you learned leading a team virtually during a time crisis and what advice do you have for other start-up leaders?

Let me not lie, it was hard at first, because I had to manage my new way of work and at the same time still figure out how to lead my team virtually, all in a short amount of time. I narrowed it down to two main things;

i) Consistency - Once you settle on a successful or ‘good enough to start plan’ for how you and your team are going to work virtually, stick to it. Even when other days are more hectic than others, stick to it. And also, if you don’t, your team probably won’t. Set routines such as morning online huddles to discuss deliverables for the day and accomplishments and challenges for the previous.

ii) Trust - Trust that your team will deliver, after all, you were most likely involved in choosing them for your team. That’s why it is important to have a plan and have frequent check-ins on the implementation of the plan, review, continue, repeat. I have realized trusting your team especially when they are performing gives them a sense of accountability and responsibility to achieve more.

7. Any last words?

Change is inevitable, what are you doing about it?