Online shopping platform Jumia has entrenched its offline stores strategy with branding existing shops with a view to deepen customer engagements on their platform.
The new strategy which is built on existing experiential shops will see existing shops partner with them to brand Jumia outside them thereby attracting more customers. The main difference is that while their experiential shops could have some goods where customers taste the quality of products before buying, in these ones, shop attendants act as Jumia agents, enabling customers to buy through them, while they respond to their queries.
Announcing the agency program and inviting existing Jumia vendors with physical shops to take advantage of this new revenue stream, Jumia Managing Director Sam Chappatte said the move is meant to provide more options to customers. It will also deepen visibility of Jumia closer to people for inquiries.
Currently Jumia has several experiential shops in Nairobi, Mombasa and Kisumu. “The end point for us is to provide touch points for our customers, have them play with tablets and order stuff online and book hotels in every major town particularly outside Nairobi”, Chappatte remarked a past function.
The offline experiential centers are a kind of digital centers with screens and computers and free internet allowing shoppers to toy around with the Jumia platforms and order or book whatever they want.
This route was first embraced by banks who pivoted the quick access of mobile banking services like Mpesa to launch agency banking in 2010. A 2011 report argued that agent banking presents opportunity for rapid expansion at minimal cost by leveraging on the existing investment of the retail agents through ICT. It showed that the main factors that propels agent banking adoption among commercial banks in Kenya are the prospects of cost reduction and customer service enhancement.
Aimed at reducing the cost of financial transactions and allowing banks a cost-effective way to expand its reach without necessarily investing in brick and mortar, the branchless banking system has tapped into the millions of the unbanked population mostly in the informal settlements and upcountry, who have the capacity to engage in profitable banking relationships but do not have access to the formal banking infrastructure.
According to the Central Banks’ Supervisory Report for the year ending December 2017, the number of banking transactions undertaken through bank agents increased by 34.1 percent from 104,193,459 transactions recorded in 2016 to 139,751,189 in December 2017. During this period, 18 commercial banks and 5 microfinance banks (MFBs) had contracted 61,290 and 2,191 bank agents respectively.
The value of banking transactions undertaken through agents stood at sh1 trillion in December 2017. The large increase was attributed to the growth of transactions relating to payment of bills, transfer of funds, cash deposits and cash withdrawals.
Over 89 percent of the approved commercial bank agents while 94 percent for micro finance institutions have also contracted agents.
Chappatte expects more people to be employed in the shops to attend to potential customers, a move that will see the platform increase the number of direct employment it offers in the retail market.
Currently, Jumia has over a million products on its ecommerce platform.
Launching the agents’ service in readiness for Black Friday which commences on November 2nd and will last for a month could offer the impetus to deepen trust among customers. Jumia’s Head of Marketplace Chris Rumenda estimates that products will sell seven times faster than normal.
Jumia’s Black Friday will have treasure hunts, huge discounts of over 70 per cent, quickest deliveries, wide variety as well as normal price guarantee for some products like electronics. The price guarantee is valid for seven days and is meant to champion the platform as a quality products’ only. Customers can return products with defects or quality issues for a 100 per cent refund or option to take a different product. But vendors are penalized.
The agents will get a commission for every product sold directly from their shops. Jumia will give the agents phones to use to make the orders while customers will decide the pickup locations and share their contact details, the same way they would when buying the products on their own.