I have a theory about the future of retail in Nigeria and a few other African countries. We have already seen millions of Nigerians leapfrogging fixed-line phones and becoming the darling of the mobile industry, and I foresee a similar opportunity with retail.
Space is at a premium in Nigeria, so for any retailer to get space in a good neighbourhood is nigh impossible. Supply chains and many other issues typically pertaining to successful retail management are also still at a very basic state in Nigeria.
Why will online retail destroy traditional bricks and mortar?
I would like to take into consideration the typical consumer in Nigeria who, after all, is the one buying things. For example, commuting in Lagos is mind-numbing. People typically spend nearly as much time getting to work as actually working. Shopping is not merely a chore but a great inconvenience, taking away from precious family or community time.
Anyone who has ever been to The Palms shopping centre on a Saturday can attest to the horror of trying to drop into the mall to do a quick shop. Unless one decides to make the trip into a day’s outing, the experience is not pleasant.
Enter the saviour, the online retailer.
Online shopping in Lagos has grown enormously, and is projected to increase even more. Why go to a mall when you can order everything you need online, and it is delivered to you?
It is not only white goods and clothing, but fresh victuals and everyday necessities. I believe that online ordering is going to grow to such an extent in Lagos that you will never need to set foot in a mall again, unless you are going to be visiting a showroom – showrooms with no items on sale are also going to explode in this market.
The growth industries set to emerge with this opportunity are as follows: delivery and courier services, payment systems, loyalty programmes, and referral schemes. It will create an entirely new industry of micro-enterprises servicing small communities exclusively, like a mobile 7-Eleven operating 24 hours a day, offering not only a pack of gum, but additional services such as laundry collection and delivery.
The reason we can be pretty confident about this growth is the relatively good access to smartphones and the decreasing cost of data. Pretty soon, the MTNs of the world are going to be put out of business as data becomes a human right… but that is a discussion for another article.
I do believe there will be a preponderance of online vendors to start, but as is customary, people will default to brands they know and trust, that are ubiquitous and that have the cash. So, just wait for mobile Shoprite stores using ‘big data’ to know how many boxes of crisps and cases of beer they have on hand for match night in Surulere.
Or perhaps Coca-Cola will refit their delivery trucks with a fridge section and start selling perishables along with their standard fare when supplying the various vendors in their territories. The business of warehousing and cold chain will be a key part of making this all work.
So, I can definitely see a space again for the Japanese 7-Eleven chain taking a share of this market with their unbelievable attention to detail about stocking very small retail spaces, but just in a mobile setting.
I don’t think drones will be very welcome in Lagos just yet as they could pose a security threat, but I am sure an enterprising Nigerian will create something that fills the gap.
Me: “Anyone want to pop to the shops?”
Progressive Lagosian: “Nah bros, relax, the next one will come past in 10 minutes.”
Nicholas J.W. Kühne CM (SA) is founder and CEO of Wunderbrand, a pan-African brand consultancy. Nicholas has a BA Marketing Communications from the University of Johannesburg and is a Chartered Marketer. He is a regular guest lecturer at leading universities on marketing and branding in Africa. He has held senior marketing roles at Nando’s, TBWA/Hunt Lascaris, MTV/VIACOM and Interbrand.
He recently accepted a position on the African Brand Council and was invited to join the prestigious African Leadership Network (ALN). His company Wunderbrand has delivered cutting edge brand strategy and design to some of the continent’s most important brands and aims to strengthen Africa’s growth through building great African brands.