by Gavin Lottering
Africa is a single continent, but each of its 54 countries has its own complexities—language, culture, ethnicities, religion, laws, governmental agendas, resources... To succeed, you need to commit to understanding that diversity at the ground level. Instead of approaching fuel retail strategy as if Africa were a monolith, think of Africa’s markets as a lot of littles.
Retailers who are succeeding in Africa have picked their target markets carefully. They have chosen markets that align with the products they have to market. Every oil company has a view on which countries fit their strategy best, where their downstream capabilities align with consumer demand and market need. Where bigger brands have stumbled, regional and national oil companies have proven to be more nimble and dynamic.
Local culture rules. In many markets, the land and convenience store are owned by a dealer. Oil companies for the most part have traditionally not played in the convenience store sector. Delivering great customer service and aligning c-store offerings to local needs is a very specific discipline that is extremely difficult to be delivered from corporate headquarters, which could be on a different continent.
Oil companies have over the years begun to focus on c-store strategies, with a strong emphasis on local leadership, staffing and recruitment. This is a smart way to keep the company in touch with shifting demand in areas where a new consumer class is emerging. Many parts of Africa have fast growing economies, enabling people (especially young people) to move out of poverty and wield a new level of disposable income. The number of vehicles is increasing, with new and used cars crossing borders and shifting the demand for fuel and convenience offerings, including automated forecourts, food offerings and mobile payments.
These gains often follow investments in infrastructure. Wherever roads and airports are being built, jobs and petrol stations must follow. Insight into these investments is crucial for retail network planning.
KEY TAKEAWAY: Pick your target markets carefully and commit to their specific needs. Don’t expect to scale easily from one country or region to another, and be ready to adapt strategies and tactics to each market.
KEY IMPLICATION: Follow the infrastructure. Most retailers will follow a city-based strategy, where the density of sites can be highest. But opportunity for new sites exists wherever new infrastructure is being built.
KEY QUESTION: Does the diversity of local markets excite you? Does your organization thrive on being adaptable and nimble? If so, your strategies and tactical execution will be more apt to fit whatever opportunities Africa’s markets offer you.
Read Part 1: Calculated Risk, Focused Reward
Read Part 3: Living Strategy, Improving Performance
Talk with a Kalibrate Strategist about your opportunity in Africa.
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Kalibrate's 7 Elements for Fuel and Convenience Retail Success is the industry’s best-in- class management framework. It enables corporate strategies to adapt to local needs while maintaining an overarching network viewpoint. Kalibrate enables Total Site Visibility for Total Site Profitability. We are the trusted adviser to global brands and ambitious independents in Africa and five other continents. Our strategic expertise and technology solutions deliver fuller visibility, truer insight and more effective control over your fuel and convenience retail network. Your adaptive edge.™