The price of oil has been falling steadily since 2014 and there are signs that it will remain volatile in a foreseeable future. This trend has resulted in a drastic reduction in revenues and a subsequent economic slowdown in the countries whose economy heavily depends on oil. One such country is Congo Brazzaville, a top ten oil producer in Africa. Per the World Bank, the oil sector accounts for 65% of its GDP, 85% of its government revenue.
With a 40% decline in oil revenue, the country entered in a “crisis” in 2016. This has directly impacted the spending of Congolese households, regardless of their social status.
Traditionally Congolese families mark Christmas and holiday seasons with buoyant, even extravagant days-long celebrations. But now, in Pointe Noire, the country’s second largest city and home to the oil companies, hundreds of businesses and consumers have become frugal. They have dropped non-essentials from their shopping basket. This is precisely what keeps Vanessa Prince up at night. She owns and runs 7 Chemin des Anges, a Pointe Noire based luxury interior design and decoration boutique and is the exclusive distributor of Flamant, a Belgian high-end brand.
Vanessa Prince is a global serial entrepreneur. Coming from a Belgian family, her life trajectory counts young and happy years in Kinshasa DR Congo, a first real job in Johannesburg South Africa, three years in Antigua, then Brussels Belgium, then a return to Africa by the way of DR Congo, Ghana and now Congo Brazzaville. Having run various businesses in Africa, she is supposed to have seen it all. Nevertheless, she admits the current times in the Congo come with unprecedented challenges.
This is an extract of our extensive discussion at a luxury boutique hotel and her store.
PG: Could you tell me a bit about how you operate these days?
VP: In general, I have one container coming from Europe every month by boat. Now it’s up to three shipments every month by air. At the end of the year, I do crystal, wood, silver, glass and almost no funky colours. In December, I mostly sell to individuals, in January-February, it’s corporate clients.
PG: What has been the first tangible consequences of the oil crisis?
VP: A lot of businesses have closed. It’s astonishing. Among the few ones left, some are agonising. With less money to spend on decoration, customers now mix luxury and low-end in their purchases. I have opted for going further in the high-end category.
PG: In Africa, the Congo stands out by its people’s familiarity with luxury. They know about labels, brands and origins in almost everything from fashion, automotive to food and furniture. This is symbolised by the world-renowned culture of Les Sapeurs. At the same time, this love for high-life and luxury is not immune from the current difficult times. How risky is it to go further upscale in your product offering when customers cut back on luxury? Will they keep on coming to you?
VP: There’s no such thing as expecting that the customer comes to you. You must go find them wherever they are, from hotels and homes to events and restaurants. That’s how I work now. I am out there most of the time. Sometimes I even travel to Brazzaville, I have friends who tip me on potentials visiting the city, others who recommend me to their networks, we help each other.
It’s more hustle! Now I work a whole lot more with instagram, facebook, whatsapp, etc. People visit the store much less, except for Christmas since they have gift lists.
Another new situation is the rise of the last-minute purchase. A customer calls me “I have a birthday tonight; I have a budget of 100K. Please organise a delivery at that address”.
Customers don’t even say what they want me to deliver! On the other hand, that shows that they trust me. So, gone is the time when they would come at the store and do serious shopping.
PG: The last-minute purchase is also growing because people have less time for in-store shopping. They are moving to online shopping and if they can find a merchant who guarantees timely delivery at their door, then they have less reasons to go to a physical store.
VP: If that’s the case then the customer will be missing out on so many things. OK, you call me for a cocktail glass, but maybe you would have liked the silverware piece sitting just on the side. You may say “build a website”, but I had one in Kinshasa and people didn’t use it. Facebook and Instagram are much more powerful here. There is always something going on there. What I would hope is that on top of social media, people would visit the store and experience the great service.
PG: The most recurrent reasons people give for deserting physical stores is the awful traffic jams, the lack of parking space, the lack of pedestrian facilities and so forth. All these are factors that shape the customer experience. But at the same time, they are beyond your control as a retailer.
VP: I believe it should be like the Grand Hotel [a Kinshasa-based five-star hotel hosting a galleria where Vanessa used to run a store]. You come for a meeting, you have a room there, you find stores there. Or like the Radisson [a Brazzaville-based five-star hotel also hosting a cluster of high-end boutiques]. Pointe Noire doesn’t provide that infrastructure to retailers, we are all scattered here and there. You must know who is coming in town, you must get access to these social circles…
I have longstanding customers who have never visited my store! I know they would change if we had a place where all retailers would be gathered under one roof. I’ve heard about a new hotel opening soon, maybe a mall is attached to it…
PG: A mall is not a panacea. The location, the tenants, the management…you need to take a hard look at these factors before moving there. I see so many cases of malls struggling because the conditions for success are simply not there.
VP: True. I was offered a space at that place [undisclosed name of a local elite hotel]. But their guests are not my targets. I truly believe in local customers, in people moving up the social ladder with my brand firmly established in their habits from day one.
PG: What about a pop-up store at that other luxury hotel there [undisclosed name]?
VP: They don’t fancy seeing visitors and shoppers coming in and out. They want to be a hotel primarily. They prioritize tranquillity and exclusivity for their guests. Also, in terms of logistics, it’s not that simple for a deco store to move things.
PG: Standalones tend to be great formats in certain circumstances.
VP: My ambition remains strong: increase my retail space. Go bigger. I want to do more. At one point, I wanted to get a house. In that option, I would have to dramatically up my game in terms of going out and attracting customers. But then, on the client side, will the purchasing power remain strong or even increase in the times we live in?
Right now, it’s Christmas, I am getting busier and busier, but during the rest of the year, it fluctuates a lot. In Kinshasa, it’s very stable, regular, logical. Here it’s good but different.
PG: I also found that, maybe due to the difficulty of making plans in this state of the economy, cash changes hands quicker. So, consumers have a different approach to spending. In their eyes, the expense that can wait, will wait longer; the expense or obligation that looks unmissable will get the cash. This is how people still spend on non-essentials. For instance, you may see a lower number of weddings but you still see monumental weddings with people spending big on florals, fashion, food, etc.
VP: I agree. A few days ago, someone calls me: “I have guests today, I need glasses, different types…for cocktails, champagne, wine, water…can you deliver?”. I reply “Sure, I can be there in ten minutes”, “OK, no tags, clean, ready”, “I just need to go to the warehouse: ten minutes” I say, “Great. While you are on your way, grab me some great wines and top class champagnes!”
VP: True story. There are more and more like this. The other day, someone who is tendering with a big oil company calls me and says “They are coming to visit our offices. Everything has to match their standards”. We were talking about decorating the whole office building, starting with the conference room and the CEO’s office.
I ask him “What’s the deadline?”, “fifteen days”. I get there and find out that I have to look after the plasterwork, the painting and so much more beyond mere decoration…in just fifteen days! We met the deadline. Since then, I got contracts with the same customer for other offices, other projects.
Another case was about delivering tens of Christmas trees in a matter of days. Suddenly the client didn’t want to work with their usual provider and called me. Sometimes customers call and start with their budget “I have XXX, send me something!”
Thus, the amount of work outside the store increases dramatically. Nevertheless, working in-store is better because it allows customers to discover, to widen their horizons, to be curious and adventurous again.
PG: What other changes do you see in this climate?
VP: Everybody is a deal maker or an information provider or a facilitator now. They know someone who knows someone who knows someone who needs this or that. So, I work well with everybody and value everybody’s contribution. I stick to my specialty, I do what I do best; and let everybody else pitches, recommends, facilitates.
Sales processes may be shorter or lengthier, but they involve more and more middlemen. That sits well with me as I love earning their trust at every stage, in terms of doing the right thing, respecting them.
PG: Where else do you make a difference?
VP: I offer only current collections. Customers find here what they would find right now in Paris or Brussels. This is in sharp contrast to what you find at other stores, where they sell leftovers, stuffs from two-three years ago.
PG: If you had to single out one thing you had to adapt to, what would it be?
VP: Discretion. In some other African cities, people are more show-off. Here, riches highly regard discretion. They don’t want to be seen or perceived in a certain way. When they are in the store, they want privacy and tranquillity. So now, on Saturdays I open only upon appointments.
PG: How is it going?
VP: Decent returns so far.
PG: Where do you see yourself progressing?
VP: There is serious money here, that’s for sure, but there is less cash circulating. Debtors request more time for payment. As a sole trader, as a relationship business, it’s not a comfortable seat to be in when customers owe you money and you have to send reminders.
I try to make a better case for payments in time, one that will drive them to pay, not because they owe me money, but because it helps me keep on delivering the high-quality service. A customer who owes money is in an equally uncomfortable seat.
I don’t have bad debtors. I am lucky that so far, the direct relationship with the customer – not their company but the one who called and purchased – is preserved. They have the courtesy not to say “deal with my financial director or go see my accountant”.