Edgars: Solid strategy, now let’s see some action

07 Jun, 2024 - 00:06 0 Views
Edgars: Solid strategy, now let’s see some action Edgars could explore partnerships with local boutiques targeting mid-income market segments across Zimbabwe.

eBusiness Weekly

Sylvester Mupanduki

Edgars’ bold strategy to rejuvenate its operations in Zimbabwe, including the revival of the Express Stores, warrants significant attention. The company faces challenges ranging from competitive pressures to its capacity to adopt e-commerce and digital operations.

In its recent analyst briefing, Edgars announced plans to open 10 new Express Stores in 2024—a move that seems poised to attract more customers from the low-end market segment.

While there are strong arguments in support of Edgars, stakeholders responding to my opinion piece from last week are concerned about the survival of formal fashion retailers amidst intensifying pressures from macroeconomic policies that create an uneven playing field between formal and informal businesses in the retail sector.

Despite financial hardships and other escalating challenges, these formal fashion retailers have the potential to endure competition and leverage their capital investment capabilities to compete effectively in the long term.

In a follow-up to my recent article, “Can Edgars Change Zimbabwe’s Fashion Outlook?”, I will delve into a few strategic ideas that, if effectively implemented, could significantly enhance profitability and overall success.

Enhancing digital presence

To complement physical stores, Edgars should establish robust virtual shops. These online platforms should list all available items, detailing sizes, prices, colours, and styles. Each item should have a description, like how Nike highlights its sustainability efforts. For instance, Nike’s Air Max Dn is noted for being made with at least 20 percent recycled content by weight.

This transparency helps customers understand exactly what they are buying. Additionally, allowing customers to create accounts online without needing to visit a branch, offering free delivery for online purchases, and enabling receipt-less returns for members would enhance the shopping experience.

In recent times, using shopping apps has become one of the most efficient ways to shop, enabling easy comparison shopping. Unlike our parents in the 1990s, who had to visit multiple stores to compare prices, today’s consumers can do so effortlessly from the comfort of their homes.

Shopping apps allow customers to purchase clothes from Edgars online, with the convenience of home delivery. While some might argue about the cost of delivery fees compared to petrol, a robust integration between e-commerce and strategically located physical stores across the country could make delivery fees more competitive.

The company is expected to make significant investments in capital expenditures (CapEx) and operational expenditures (OpEx) to drive its turnaround strategy. This demands a departure from traditional marketing approaches, opting instead to avoid spending on billboards and TV commercials.

The strategy hinges on letting the products and customer experiences speak for themselves, promoting a cost-effective model. Emphasis should be placed on word-of-mouth, in-store experiences, and leveraging social media. The brand’s success will be fuelled by satisfied customers who naturally become brand ambassadors, sharing their experiences within their social circles.

By creating engaging content and maintaining active communication, Edgars can cultivate a strong community of loyal followers without the need for costly TV ads.

The company can also foster customer loyalty by encouraging patrons to showcase outfits they recently purchased on social media platforms, offering them a chance to either be featured or win back a percentage of the purchase price.

Another approach to enhancing the customer experience could involve offering membership benefits such as exclusive events, and access to member-only products and experiences.

Collaborating with local influencers on Facebook, Twitter, Instagram, and TikTok could expand Edgars’ reach and engagement. A good example can be seen in “The Suits World”, which utilises social media influencers as brand ambassadors, including Night Shadaya Tawona, who boasts over 500 000 followers on Twitter and 64 000 on Facebook. Consequently, The Suits World has amassed over 100 000 followers on Facebook and 12 000 on Twitter.

By capitalising on the reach and influence of these ambassadors, they are effectively marketing their $30 suits. Earlier this week, one of his Twitter posts announcing, “The Suits World’s” Father’s Day promotion garnered 53 000 views in under 24 hours, with several followers commenting and requesting the company to open a branch in Bulawayo. This is a strategy that Edgars should aim to emulate in the future.

Partnering with local boutiques

Edgars could explore partnerships with local boutiques targeting mid-income market segments across Zimbabwe. Instead of renting out big spaces for Jet Stores, Edgars could pay for the showroom space while offering a commission to the hosts for each item sold.

This model supports both physical and digital retail, as customers could make purchases online using the boutique’s in-store devices or from their personal computers, applying promotional codes for discounts.

To ensure a seamless experience, Edgars could either deploy its customer experience associates to these boutiques or train boutique employees to handle Edgars’ products and online purchase processes.

Turning shareholders into business partners

The company could also reframe its relationship with shareholders, viewing them as business partners rather than mere investors. Encouraging shareholders to support the business by purchasing Edgars products could drive earnings from operations and increase returns.

For example, in 2021, Edgars had 109 local companies and 91 pension funds holding 45 percent and 18 percent of its shares, respectively.

If these 200 institutions encouraged their employees to shop at Edgars and Jet under favourable terms, both the number of active accounts and earnings could have been significantly boosted.

Additionally, engaging local individual shareholders and their families to recognise the value of Edgars’ brand and potential cash flows could further solidify this partnership approach.

Seeking Government support

Edgars’ strategy to use local manufacturing as a driver for economic development aligns with the “A nation is built by the efforts and contributions of its citizens” ideology, emphasizing local contribution to national growth. By advocating for local manufacturing, Edgars supports job creation and aims to restore the manufacturing sector’s contribution to GDP.

Government support in the form of favourable tax policies and incentives for local initiatives could help lower the cost of locally manufactured products, making them more competitive against imports and fostering broader economic benefits for the local community. In a market-driven economy, punishing companies for having a good business model does not make much sense.

Edgars Stores Limited has faced significant challenges in the past, but it has planned substantial capital expenditures for the next few years, with debt not posing a major concern. For investors seeking opportunities in turnaround stories, Edgars could be a promising candidate.


The information and opinions in this report were prepared solely for informational purposes. Though the information herein is believed to be reliable and has been obtained from public sources believed to be reliable, the writer makes no representation as to its accuracy or completeness.

The writer neither endorses the content nor is responsible for the accuracy or security controls of any references that might have been provided in this report.

The writer may also engage in transactions, for their account or with anyone, in a manner inconsistent with the views taken in this research report.

Recommendations contained in this report may differ from recommendations contained in others, whether because of differing time horizons, methodologies, perspectives, or otherwise. Opinions, estimates, and projections represent the current judgment of the writer as of the date of this report and are subject to change without notice.

Sylvester Mupanduki is a financial analyst specialising in equity investment research. He can be reached via email at [email protected] or through his LinkedIn page www.linkedin.com/in/sylvester-mupanduki

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