Analysing the internal and external factors that influence and affect Loose is important to make sure the store has a strong start and can make considered, strategic decisions throughout its first year.
In the global context, there are many trends that count in Loose’s favour, including a rise in values-based shopping (choosing products that have a positive social impact) (Zacharias, 2015) and a growing concern about the amount of plastic the world produces and throws away every day (Laville and Taylor, 2017, and Plastic Packaging Survey, 2017). On a holistic level, this means Loose needs to build a meaningful brand through transparency, sustainability and delivering value, but it also shows the viable market gap for a store that promotes plastic-free, positive shopping.
On a more local level, Loose will need to take issues of food access and food security into account. One survey showed that up to 80% of sampled houses in Cape Town can be classified as moderately or severely food insecure (food security is defined as all people, at all times, having enough food for an active, healthy life [Labadarios et al., 2011]) (Battersby, 2011). Therefore, it will be important for Loose to be accessible to anyone in the surrounding area who would like to buy from it, and to be active in supporting a sustainable local food system. Some ways they can avoid being seen as exclusive are by sourcing supplies as locally as possible, making their goods as affordable as possible, and by adhering to ethical trade policies (like Fairtrade).
While there aren’t any big political forces that will affect the store, politics will be linked to the economic factors that do: South Africa’s current economic recession means people could be buying less in general and, while they will always need food, they could look to big retailers for good deals if the recession grows. Environmental influences are linked to the economic situation too as climate change has been shown to increase the cost of food (350 Africa, 2015) and so it could become more expensive to source supplies.
The other environmental factor to consider will be the footprint of the supplies the store sources, but as mentioned, these should come from as many local suppliers as possible.
In addition to making sure the store is accessible to anyone who would like to buy from it, Loose needs to be aware of the sociocultural stigma of privileged, ethical consumption having bad side effects: in the past decade, as the popularity of many “superfoods” have skyrocketed, there have been reports of the global demand taking access away from the Indigenous people who relied on the crops before they became well-known (Bose, 2016 and Blythman, 2013). Loose will need to work to address wide food and product needs and avoid niche trends.
On the technological front, 38% of the South Africans who shop online currently order groceries that way too (BusinessTech.co.za, 2014) and an increase in this practice could threaten traffic to the Loose store. However, technology can also help solve this problems by making it easier for consumers to shop at Loose with options like pre-ordering for in-store pick-up, mobile payments, and eventually their own delivery system, if it can be done in a low-impact way.
Finally, Loose will need to be aware of their legal policies and practices unique to their store. For example, will they be able to offer a refund if a consumer’s own container breaks? How will they take unpackaged goods back? These are issues they will need to be clear on with potential customers.
Based on the macro environment discussed in the previous section, it is possible to start getting a clearer view of the context that Loose will be operating in. Because it doesn’t only sell groceries, Loose bridges different product categories. It sits in the supermarket category for the food and home cleaning supplies it sells, but also inhabits the cosmetics category for the eco-friendly body products available. The closest comparison to the established stores in these markets would be as a cross between Woolworths and Wellness Warehouse (although these are not direct competitors as they do not have a zero-waste focus).
Locally, smaller stores in the eco-friendly, consumer goods categories have had a strong market-based presence (here, ‘market’ refers to a public place where a market is held, not the general demand for goods). As there are over 100 regularly-occurring markets in the city of Cape Town throughout the year (SA-Venues.com, 2017), it is evident that there is a consistent consumer demand for ethical food, home and cosmetic products. However, all these market competitors, along with multiple brick-and-mortar competitors in the form of Woolworths, Wellness Warehouse, and Clicks, highlight that there is no shortage of outlets for people in Cape Town to buy these goods from. Although Statistics South Africa says that “one out of every two Rand spent by South African households goes towards housing and food expenditure items” (2013), this saturated market could be a threat to Loose if it is not navigated well.
Because of the zero-waste movement’s holistic focus on the goods it uses, there is a lot of room for Loose to collaborate with stakeholders across their supply chain. They could use the store as a platform for a ‘meet the farmer’ initiative to introduce customers to their suppliers, educating their audience about where the food is coming from and how it’s produced. As there are already stores in Cavendish Square that share some similar values (like Montagu dried fruit, Rain body products, Lush cosmetics), Loose could also partner with these stores to sell some of their products without packaging, for example.
Further analysis into Loose’s market and micro environments will be unpacked in the competitor analysis, target market, and brand identity sections below.
Loose has some direct competitors within the zero-waste category and some product competitors based on the goods they are selling. One the zero-waste side, the main local competitors are Nude Grocery, a food-only store set to open on the city of Cape Town on 5 November 2017; and Wild & Waste Free, a lifestyle co-op in Glencairn that is currently testing out its pilot phase and might continue in 2018. Wellness Warehouse is the biggest competitor in the healthy living category, although it doesn’t have a zero-waste focus, it is still an established player and potentially top-of-mind in the market.
Table 1 on the next page will compare Loose to its competitors in terms of their profiles, competitive offerings, target markets and marketing strategies so far.
|LOOSE||NUDE GROCERY||WILD & WASTE FREE||WELLNESS WAREHOUSE|
|Overview||Packaging-free store in Claremont, selling food, home and cosmetic products.||Plastic-free grocery in Cape Town city bowl.||Lifestyle co-op in Glencairn selling food, body, and cleaning products.||Chain offering comprehensive list of health and wellness products. No zero-waste focus.|
|Differentiator||Southern suburbs location, wide range of products||Central location and very clear offering||Wide range of products and collaborations with known brands. Community feel.||Size – 17 stores in Cape Town and more across the country.|
|Target market||Young adults and families in the southern suburbs area, looking for a one-stop shop for low impact living at a convenient price.
|Young adults in Cape Town interested in low impact living and able to afford a higher price point.||Families in the southern peninsula area interested in low impact living and healthy food.||Adults across the country interested in preventative wellness and healthy living, also able to pay a higher price for ‘healthier’ products.|
|Market share||0% – opening in 2018||0% – opening in November 2017.
Current Facebook fans = 2,160
|Small as the location isn’t easily accessible. Current Facebook fans = 1,613||Large as they’re spreading nationwide. Current Facebook fans = 50,173|
|Marketing strategies||PR, social media, digital marketing, direct marketing, alternative media.
These will be unpacked in the communication strategy section below.
|So far, they’ve used PR to launch their ‘coming soon’ video and direct people to their email sign up form and Facebook page.||Social media (photos and videos), personal selling done through workshops and DIY events, loyalty/discount schemes for joining them.||Social media, discount deals and special offers, search engine marketing, print media (Wellness magazine), display advertising.|
Table 1: Competitor analysis for the South African zero-waste market
It is evident to see that Loose needs to be clear on its positioning and points of differentiation going forward. There is a gap for its offering in the Southern Suburbs location, but it will need to highlight its value against burgeoning competition in the zero-waste market, and more established players in the healthy living market.