Businessday Ng –
Online shopping in Nigeria may have characterised the shopping landscape during the pandemic but it couldn’t stifle the influx of customers into the brick and mortar retail experience. The future of retail from the post COVID experience is hybrid.
In Nigeria, the influx of customers into physical supermarkets signals a return to normalcy after the Covid-19 disruption.
Undoubtedly, the erstwhile restriction on movement and lack of access to public places changed consumer behaviour to a certain degree. A growing number of consumers in Nigeria made a switch to e-commerce thus making online sales very popular in the wake of the global health crisis.
Of course, online shopping comes with its bag of benefits: convenience to buy from homes, hotels and offices, ability to carry out discreet shopping, lessened chances of making compulsive purchases and crowd avoidance. Covid-19 was a catalyst for the spike recorded in the e-commerce sector in Nigeria and other climes. It’s an undeniable fact that Nigeria is Africa’s biggest economy and one of the fastest-growing in ICT.
According to the International Trade Administration, the current eCommerce spending in Nigeria is estimated at $12billion and is projected to reach an impressive $75billion in revenues per annum by 2025. It simply means that digital intrusion in Nigeria’s economy has opened up new opportunities for growth. How can anyone ignore the revolution that technology has brought to music marketing in Nigeria?
Just as streaming propelled the global sales of Nigeria’s urban music content, the online retail experience has transformed how groceries, fresh produce and other items classified as fast-moving consumer goods are marketed. Many households have working mothers. Some of these women are dominant breadwinners and caregivers to aging parents and their young children. Time-saving alternatives become necessary for these women, hence the rise in online shopping.
According to the report published by Deloitte titled ‘Understanding the Sector impact of Covid-19 on Nigeria Consumer Products,’ there is a permanent behaviour shift to online and delivery across consumer segments. The pandemic has brought older, first time users to online grocery and delivery models.
Considering this variable, one can say that online shopping is here to stay. In spite of this optimistic view, the dwindling numbers of eCommerce businesses in Nigeria are quite disturbing. Consider OLX, DealDey, Efritin and a few others that had to shut down businesses within a few years of operation for lack of profit. Many experts had cited poor infrastructure as part of the plaques inhibiting eCommerce in Nigeria. Heavy traffic, bad roads and inaccessibility occasioned by gated roads or ongoing construction had affected the efficiency of deliveries of goods and services.
Unreliable internet service and power supply have also been a bottleneck to online businesses, translating to increased cost of operations. Beyond these man-made drawbacks of the online shopping experience, it is believed too that shopping virtually has the tendency to be an isolating experience since human interaction is replaced by virtual ones. And there are limitations to the sort of communication that can happen online.
The virtual space has no empathy as a real-life shop assistant does. Also, families strengthen their bond when they go out for in-store shopping. With online shopping, a lot of young children miss the chance to push or be wheeled around in shopping carts by their parents.
Away from that kinship experience, online shopping is more prone to hacking and stolen identity instances than the physical retail experience.
At the peak of the pandemic, many shoppers lost out on the total sensual experience that retail therapy offers. The allure of colourful Ankara fabrics, the aroma of oven-fresh bread, the inviting fragrance of a perfume store, the wafting smoke from the steak and an assortment of groceries were all suspended sensual experiences during the lockdown.
This is where the brick and mortar retail comes in. Beginning with the Palms Shopping Mall, the construction of ultra-modern malls by Shoprite equipped with POS terminals across Lagos and nationwide was to make access to top quality product brands more convenient with secured shopping environments. Other supermarkets such as Spar, Goodies, Addide, Prince Ebeano, Just Rite and Hubmart evolved over the years, thus contributing to the robust retail sector in Lagos, the nation’s commercial capital.
According to the National Bureau of Statistics, the retail sector’s contribution to the nation’s GDP in 2020 was 14 percent while the Nigerian Stock Exchange (NSE) estimates that it will grow by 20.4 percent to hit N454 billion by 2025. According to the UN, Nigeria’s population will reach 400 million by 2050, up from an estimated 206.1 million in mid-2020, which would make it the third-largest country in the world after China and India.
The middle class which rose by 600 percent to an estimated 4.1 million households in 2014 shows some measure of strength in the purchasing power of the consumers. With eyes on the bigger picture, experts have argued that the retail sector is one of the non-oil pillars of the Nigerian economy.
Fitch Solutions, the research arm of the international credit rating agency, projects that real household spending in Nigeria will begin to recover in 2021, forecasting 1.7% percent growth. With this forecast, it is expected that consumer spending will return to pre-pandemic levels by the second half of 2022 or latest the first half of 2023. With that expectation, Nigeria is set to witness massive expansion projects of ultra-modern shopping malls by Shoprite, the largest grocery retailer in Africa.
From growing 25 stores nationwide over the years to Ketron’s takeover, the Shoprite example has demonstrated how the brick and mortar retail store model in Nigeria is evolving to become a hub and indeed a catalyst for development. A case in point is the Benin Mall project in Benin which will house a library. Needless to say, the Brick and Mortar retail industry boasts of varied expertise.
The workforce for it requires investors, real estate, construction, engineers, store managers, surveyors, architects, technicians, drivers, suppliers, advertisers, lawyers, cashiers, store attendants, cleaners, security, IT support services staff and more. The reality is that a brick and mortar store is more likely to engage a larger workforce, thereby reducing the rate of unemployment in its host community.
Also, post-pandemic recovery plans by the Nigerian government are likely to unfurl economic opportunities.
According to Nicole Genchur, director of marketing research & insights, GroundTruth, ‘when it comes to shopping habits, expect consumers to drift back to physical stores.’ Hence, the desire to return to normalcy is one factor that would sustain brick and mortar retail marketing.
Read also: Consumers drive retail’s digital transformation, says Microsoft
In her report ‘Five Consumer Trends to Watch in 2022,’ the marketing expert listed the opportunity to try-before-you-buy, avoidance of high shipping costs and better deals as some of the motivations for a return to the physical stores.
Additionally, brick and mortar retail helps to eliminate the challenge of conveying fresh produce to reach their destinations. This, in itself, has been a major challenge in the produce supply chain system. With looming expansion projects for physical retail stores in Nigeria, this setback to produce marketing can be removed to breathe life into small and medium scale businesses. Certainly, the future of retail experience is- as a matter of necessity- hybrid.
The realisation that physical stores still have to compete with e-commerce platforms on convenience will make operators introduce innovative solutions to bolster the in-person shopping experience. “Customers are everywhere, shopping in micro-moments, whether looking through the glass of a storefront or their phones,” Colm O’Brien, the director for strategic offerings for the Global Consumer Industry at IBM Services, observed. “Retailers need to be there with them, and to do that, they need to be much more agile to marry digital and physical experiences”.
Technology is an asset to optimising the consumer experience whether during in-person shopping or online engagements. For instance, the use of free WiFi will drive foot traffic. Some international retailers have added the self-checkout feature enabled by the barcode technology to make self-service possible for tech-savvy consumers and that’s replicable in Nigeria.
Additionally, in-store rewards such as competitions, raffle draws and deals which are traditional features of rewards for customers in Nigeria are ways of reviving the culture of in-person shopping. Very likely too, bringing a popular singer or a famous author or an actor to a shopping mall can make the brick and mortar shopping a value-added experience.
The power of technology in optimising consumer experience for the brick and mortar retail industry cannot be overstated. By powering the brick and mortar experience with innovative solutions, the retail industry will reinvent itself as a relevant and significant part of the nation’s economy.
Oni, an entrepreneur, writes from Lagos
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Business Day, established in 2001, is a daily business newspaper based in Lagos. It is the only Nigerian newspaper with a bureau in Accra, Ghana. It has both daily and Sunday titles. It circulates in Nigeria and Ghana
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Businessday Ng –