by DYI Team
A few weeks ago, our team sat at coffee, deep in conversation with some foreign retail investors adept at the APAC and EMEA markets. Their questions edged around fiscal trade in West Africa, the role of the retail, distribution, and general marketplace for fast-moving consumer goods, and the Pandemic’s impact on the Nigerian retail business.
Arguably, some Nigerians seem to have moved on from COVID-19 and its preventive measures. This is evident in what you find in Lagos stores where one only needs to wear a nose mask at the entrance of a supermarket and may yank it off immediately they’re in; no one seems to care, after all, “life has gone back to normal” as they say.
When asked why he was not wearing his nose mask, Dapo, a Lagos retailer, said, “There is no COVID anymore; life has gone back to normal. We thank God.”
But what do we find in other parts of the world? Governor Gavin Newsom of California issued a stay-at-home order on March 19, 2021, making the state one of the first in America to declare a coronavirus lockdown. The state has, since June 15, relaxed state rules on social distancing and ended limits on capacity at public spaces. Meanwhile, on June 21, 2021, the lockdown was eased in the United Kingdom with a review of the regulations. Considering these, what does the future hold for retailing?
It is no longer news that in 2021, the world’s most equipped supermarkets are not those with the most welcoming attendants, largest spaces, nor sophisticated technologies; they are those that are designed with inbuilt strategies to accommodate life and economic disruptions. Gone are the days when profiting effortlessly from retailing was as certain as death and taxes. The biggest retailing takeaway from 2020 was the urgent need for a shift to e-commerce. If customer relations before the pandemic entailed shaking hands and talking over coffee, the story is now different, as “contactless” and “frictionless” are the selling points. Speak of change at the snap of fingers.
The Nigerian Reality
It came as a shock when the COVID-19 pandemic struck Nigeria in late February 2020, with the subsequent months unveiling loads of unforeseen hurdles and seemingly insurmountable challenges. Of the many issues we encountered at the time, buying and selling were particularly Herculean. But somehow, we could not stop trading, so our survival instincts set in, hence the e-commerce awakening.
Having gone through such a year, with about 167,000 COVID cases and only 0.9 of the entire population vaccinated, should retailers expect business to return to “normal”? But wait a minute, what exactly is now “normal”? Brick-and-mortar retailing? Or virtual retailing?
Let us dive right into this scintillating conversation!
A Trip Down Memory Lane: Blessings of the Pandemic
According to Mirakl’s recently released Enterprise Marketplace Index, marketplaces witnessed an 81% increase year-over-year in gross merchandise value (GMV) in the fourth quarter of 2020, bolstered by an eye-popping 106% increase in marketplace purchases.
Incidentally, Africa also felt the effect of the pandemic-induced growth in the e-commerce sector. For example, Jumia, Africa’s biggest e-commerce company, recorded a 22.8 percent on-year boost in active customers last year.
FarmCrowdy, a Nigerian agritech startup, launched an e-commerce store that directly purchased fresh foods from farmers. Reportedly, the platform received an estimate of 3,000 orders in the initial 90 days.
It’s important to highlight the role logistics companies played in aiding online retail success during the lockdown. These informal distributors supported contact-free delivery and cashless payment, thereby providing full supply chain management for e-commerce firms.
Growing Innovation
It is glaring that the pandemic galvanized the development of numerous technological innovations. For instance, one of our clients at Del-York International, GAC Motor, had to find a way to keep selling cars, despite the lockdown. A tall order, you say? Well, our IT team brainstormed and voilà! What emerged was a unanimous decision to convert their website into an e-commerce site with a virtual showroom, so as to accommodate their customers in the heart of a pandemic and simplify their buying process.
According to Kevin, one of the virtual buyers of the GAC GS8, “This is such an amazing website; I had a remarkable experience looking through the ultra-modern wonders on wheels at the GAC showroom. It was a virtual fantasy.”
Another GAC car buyer, Alice, excited about her virtual tour, said, “I love that I had access to various GAC cars, saw their prices and payment options easily. And I was able to purchase a car and even secure after-sales care, all online. It was such an experience!”
In essence, GAC Motor, through our expertise as a leading PR and Strategic Communication Agency, created a technologically-driven hub ― a revolutionary website centered on progressive user experience. Who says “impossible” is a thing?
The Big Question; Is The ‘New Normal’ Here To stay?
The Covid-19 crisis ignited a significant change in consumers’ behavior in the country. That change is gradually transforming the future of retail in Nigeria.
According to a survey, Nigerians’ spending on e-commerce presently accounts for an estimated $12 billion per year. By 2025, experts believe that the figures will rise to $75 billion in annual revenues.
Furthermore, a study conducted by MasterCard, an authority in global payment in Nigeria disclosed that 81% of consumers (four out of five) in Nigeria are shopping more online since the start of the pandemic. With these findings, it is safe to predict that many consumers will continue to choose online retailers over brick-and-mortar retailers even after Covid-19 is completely gone.
The pandemic has accelerated a long-term trend shift of demand towards digital commerce by many Nigerians. On the flip side, Dare, a phone accessories dealer, thinks otherwise. “Nigerians will always want to see and touch a product before they buy,” he asserted after narrating how some Nigerians made their way to his store to purchase goods in person despite the pandemic. Dare seems to have a strong point. Nevertheless, data suggests that more customers’ behaviors are evolving, and the change is here to stay.
Way Forward: E-Commerce or Not?
Should we just bid our farewells to the brick-and-mortar storefronts? Hold on to our “norms”? Or have a hybrid? Whatever floats your boat, however, we cannot deny how economically suicidal it is for any retailer to ignore e-commerce. Maybe the pandemic was a vivid retelling of the biblical story of the ten virgins. The wise ones already had their oil ― the virtual space. And the ones without oil? Well, you know the rest of the story.
Post-COVID-19, where do you fall? What new methods are you adopting to run your business smarter? The future will reveal the virgins with oil in their lamps.
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Are you looking for a PR firm to step up your digital marketing and e-commerce game? Reach out to us at Del-York International at press@delyorkinternational.com or call +234 814 000 0498. Our team of experts will be happy to assist you.