Don't Listen to Your Customer: Behavior Change in the Informal African Retail Sector

When we launched Sarafu, a B2B commerce app that allows retail FMCG (fast moving consumer goods) shops to place orders for their supplies on a smartphone, most of the retail shop owners we approached in Dar Es Salaam, Tanzania were hesitant about the idea. Few were familiar with app-based ordering, and many did not have smartphones. Their preference was to call someone to place their order. This was the ordering habit since mobile phones became prevalent more than 15 years ago. 

We ignored the request from our target market and did not to establish call-center ordering (although we do have a call center for customer service). In order to achieve the kind of scale we envisioned it was necessary to change the way shop owners ordered their supplies. Instead of a call center, we built out a team of sales agents to train shop owners on how to download and use the Sarafu app to place orders. 

The phone-based ordering habit was so ingrained in the day-to-day psyche of shop owners that in the early days of operating Sarafu, customers would call the sales agents and ask them to log into their account and place the order for them. Such is the resistance to change in an informal market like the supply of FMCG. 

This chart below indicates transaction number by hour for customers placing orders on the Sarafu app about a year ago in March 2020. The majority of transactions take place between 7 am and 1 pm, or the typical ordering time for a retail shop. The transactions peak at around 10 am because the cutoff for same day delivery is 11 am, so shop owners are trying to get their products before the end of the day. There is a slight increase in transactions after 8pm. Keep in mind, before Sarafu all orders must be placed during business hours because they require a phone call to a distributor to inquire on inventory and price. 

As customers become increasingly comfortable with app-based ordering they also became increasingly interested in the different opportunities the app afforded them.

The following is a similar chart except about one year later in March of 2021. Here you can see shop owners continue to place most of their orders before the 11 am same day delivery cut-off, but a significant shift took place with respect to orders placed AFTER 7pm. A much larger percentage of shop owners are now placing orders at night.

Placing orders in the evening has a few advantages:

• Does not distract from servicing customers during the day

• Allows the retailers to receive their products first thing in the morning before customers arrive

• Retailer can assess inventory after a full day of sales and place orders accordingly

The data demonstrates that many retail shop owners prefer placing their orders late at night, something they were never able to do before digital ordering. 

Now consider the following: If we did a comprehensive survey before launching Sarafu and asked customers if they would prefer to purchase products

a.  by app that allows them to make orders at night, or

b.  by phone during business hours

The vast majority (including the ones now ordering at night) would request phone ordering. The possibility of ordering at night was never comprehended by them because the concept of online ordering itself was foreign: something that people do in the US and Europe but not quite relevant to their reality. Retail shop owners are not interested in understanding the implications of technology, they are interested in getting the products they need when they need them. Looking into the digital future is not what keeps them up at night.

In this case behavior change was driven in a multi-step, iterative process:

First, we forced them to order via an app by eliminating the phone option, while still providing enough incentive (through price and quick delivery) to give Sarafu a try. We provided a relatively low risk opportunity for the shop owners to see the potential benefits. 

Second, we shifted their behavior once an understanding of app-based ordering became a reality for them, they absorbed the lived experience of what it means to order through a smartphone.

Changing customer behavior at times requires you NOT listen to your customer. Instead follow a vision for where you see your customer can go, but they cannot. Initially, many retail shop owners avoided signing up for Sarafu because they did not have a smartphone. Now, many new customers are purchasing one so they can take advantage of the service.