Towards the end of 2013 Builders launched its latest format: the Builders Superstore, aimed at home owners in townships, rural and developing urban areas. “We identified the gap to serve customers better in our core markets,” explains Llewellyn Walters, Builders chief executive officer. “We are aiming at saving our customers money so that they can live better,” Walters said at the launch. “This target group will be able to source everything they need for their home in one store, with expert advice being on hand. The Superstore experience will be fun, safe, engaging and respectful, in stores that will be easy to navigate. The product range will be narrow and focused, but project complete. Even the purchase of prepaid electricity will form part of the experience.”In line with this brand new offering, one of Massmart’s other firsts was DionWired, a format the group grew from inception.
Before this brand entered the market, there were few stores selling aspirational merchandise across the home entertainment, computing, gaming, cellular, large and small appliance categories. The brand has been well accepted and has established itself since its launch in 2006. A notable first introduced by DionWired was the development of software that allows for online transactions. Some of Massmart’s earliest innovations have become the status quo in South African retailing. For instance, in the 1980s Makro established its liquor outlets – and this format has since been followed by many other retailers in the market.
Advantages of Walmart link-up
The group’s link to Walmart dramatically reduces the risk of running trials with new product categories. For instance when introducing fresh food retail into Makro and Game Massmart had Walmart’s experience to rely on. To date, Massmart has grown its fresh food business from a zero value base to a business sector worth R10bn. But the group is not stopping at fresh food. It has already established a business base so varied that one can easily name a product category and somewhere in the Walmart world there will be a proven winning strategy that Massmart can tap in to. An added advantage of being part of the Walmart world is the access Massmart now has to Walmart private label brands, such as the recent introduction of the Equate sunscreen brand, both affordable and innovative, with a range of sunscreens in the 30 and 50 SPF ranges.
Late last year Massmart also introduced the famous British clothing brand George to three of its stores. Chief executive officer Grant Pattison said the launch provided an example of how access to the Walmart group’s intellectual property can enable Massmart to cost-effectively identify new ranges for local introduction. He explains: “Being part of the Walmart family gives us this edge: we can try new things with lower exposure to risk. Our customers have called for a total shopping experience – one store that offers everything – and this is another opportunity to be able to give our customers what they have asked for.”
Part of giving customers what they ask for is making certain that products are available on shelf all the time. To attain this the group has established a R4bn network of regional distribution centres with the very latest in software developments, able to forecast and replenish in-stock levels in time, while simultaneously reducing transport, storage and handling costs – these savings are passed on to the group’s customers, who have come to expect good quality at affordable prices.
Sticking to its roots
Not losing sight of its roots, Massmart has extensive experience to draw from, as a well-established retail holding company in Africa. Massmart’s innovative approach to format development includes reinventing its formats, launching brand new ones, and acquiring high potential businesses that fit the overall profile in the process. Makro for instance, started its retail presence as a warehouse and general merchandise value creator, but in 2010 it became much more than that, with the addition of a fresh foods section which turned it into a one-stop superstore for both retail and wholesale customers. Game too, has added fresh produce and food to its mix making it more of a one-stop convenience store. Ultimately, the offerings developed by the various divisions, including Massdiscounters, Masswarehouse, Masscash and Massbuild, reach into the furthest corners of the country with the latest in merchandising mixes and innovative approaches.
Leading the followers in retail
With the Walmart tie-up Massmart now is part of a family of 69 formats in 27 countries
The British clothing brand George has made its way into Game stores towards the end of last year
Massmart firsts include the launch of the Makro Liquor outlets in the 80s and DionWired in 2006.
A World of Innovative Retail Knowledge
Massmart can now tap into a world of retail knowledge and experience with the link-up to Walmart, the world’s largest retail chain. This has put the group at the forefront of retail in Sub-Saharan Africa.
Massmart now has access to best practices and policies from all over the globe and has begun exploring this new world of knowledge, expertise and experience in order to identify winning innovations and smart ways to implement this locally. When it comes to acquiring new formats the company has always been on the lookout for existing businesses with the potential to put it in touch with new markets. In 2003 the Builders Warehouse group was acquired with this purpose in mind: and it has since made inroads in the group as well as growing its existing clientele into new areas. Since then the group has become the leader in its field and a trendsetter, as are the other brands in the Massmart stable.
by Ilse Ferreira