Financial Innovation Usage and Profitability of Supermarkets in Mombasa County, Kenya

Abstract

Performance of supermarkets across the country contributes to the development of economy through service sector. The problem is financial challenges affecting supermarkets/financial underperformance. To achieve this economic growth there is need to embrace the latest technology usage which helps in channeling money across transaction space, Information database, risk management and pooling of funds in order to support decision making process, and a problems of a symmetric information, addressing moral hazards and a system of payment which based on purchase and sales of goods and services by payment system. However there still seem to be a challenge in achieving the best performance of these firms. Mobile banking, online banking and real time gross settlement and automated teller machines are some of financial innovations that have had strong effect on profitability both individually and collectively. Use of ATMs, SMS banking for example increased transactions due to easy access of accounts on machines placed at strategic locations. Online banking and mobile banking all brought services close to the customers and reduce cost of operation. The most common aim and object of this study is to determine the financial innovation usage effects on profitability of supermarkets in Mombasa County, Kenya. The certain aim and objectives were to determine the effect of barcode technology on profitability, to evaluate the effects of loyalty programs on profitability, to establish the effect of plastic money on profitability and to determine the effect of mobile retailing on profitability of supermarkets. The study was anchored on constraint theory, the transaction cost innovation theory and innovation theory of profits. Descriptive research design was used by the researcher mostly. 214 employees were selected from the accounts and finance departments of the supermarkets which known as the targeted population.83 employees was the sample size. Both of the data was collected primary and secondary. The collected data was edited, key and coded into the programs statistically for the analysis then by using descriptive statistics the coded data was analyzed corresponding to mean, standard deviation, and percentage by using the inferential statistics and (SPSS) were analyzed also such as correlation and ANOVA. The analyzed data was then shown in form of tables, graphs and figures. The study concluded that loyalty programs offered was appropriate point systems which can save time and improve accuracy in sales. Supermarkets have implemented rewards schemes, cash transaction have advantage if it effectively designed with loyalty programs.