Multi-channel Retailing Operations and Performance of Select Alcohol Manufacturing Companies in Nairobi, Kenya

Abstract

The objective of the study was to investigate the effect of multichannel retailing operations on the performance of alcohol manufacturers in Nairobi, Kenya; with the multichannel operations being proxied by inventory, warehousing and capacity management. The performance of the firms was measured by the resultant cost containment, competitive advantage and market share changes. Towards the realization of the research objective, the case study research design was adopted because it facilitated an in-depth probing of the answers provided by the interviewees. The population of the study were the three major alcohol manufacturers that control a 5% market share in the local market, namely; East Africa Breweries, Kenya Wine Agencies Limited and London Distillers Kenya Limited. Primary data was collected through the use of an interview guide with the analysis of the data being realised through content analysis. From the results, it was evident that all three firms adopted a multichannel retailing operations in their business as a result of the need to reach a wider market segment. The changes to the capacity of the organization as a result of adopting multichannel retailing involved altering inventory ordering process and storage all the way to the queuing for service delivery and demand management through bringing forward or delaying a sales order processing. The capacity planning under a state of uncertainty brought about by online retailing was found to demand improved planning process. Similarly, the findings reveal that warehousing operation has necessitated the need of increased coordination between the production, warehousing and various retailers dispersed all over the country and this has led to the introduction of the inventory vendor management system to improve this coordination. The results reveal that the adoption of multichannel retailing had resulted in increased market share, especially from the online market, improved firm competitiveness and cost reduction. The study recommends increased investment in the online retailing by the firms because with the increased internet penetration in the country, the online purchase will the future mode of purchasing and less store purchase.