The Nigerian consumer landscape is set for a multitude of shifts. By 2025, 55% of Nigerians will live in cities or towns, and the country will experience a 50% urban growth – the fastest urban growth, globally.
This was just one of a wealth of insights that emerged at an event in Lagos today with the theme “Beating The Odds, Today and Tomorrow”, organized by Nielsen Nigeria of the Nielsen Holdings plc (NYSE: NLSN) is a global measurement and data analytics company. The event looked at the question of whether retailers and manufacturers are equipped to beat the odds they are facing in Nigeria by anticipating and preparing for the future?
Speaking at the event, Nielsen Nigeria MD Ged Nooy said “Everyone is fighting for growth, competition for consumers’ wallets has never been greater, and growing share of those wallets has never been tougher. In a challenging environment, finding opportunities with the right insights becomes key to help beat the odds.”
BEATING THE CONSUMER ODDS
Nigeria is a complex market. You have consumers who are upbeat and confident with 81% feeling good or excellent about the state of their financials, while at the same time 60% of Nigerians say they can only afford the basics. 41% of Nigerians feel that their quality of life is better but more than half feel that it is worse, leading to a polarization in the market with consumers at both ends of the spectrum. Marketers need to cater to the demands of those who want value and at the same time those who are aspirational and want quality, premium products.
Another trend impacting consumer behaviour is the rise of disloyalty. 88% consumers across Africa & the Middle East are ready to defect and 45% consumers love trying new things. In such a scenario it becomes all the more important to understand consumer attitudes and perceptions and how they make choices.
Ailsa Wingfield, Executive Director, Thought Leadership, Nielsen said, “Opportunities today and tomorrow are about understanding and delivering what consumers need and want. Times are shifting. There are more products on the shelf today than ever before, from new and existing brands, and a whole lot more information points, advocates and advertising telling consumers about them. The consumer is spoilt for choice. Brands need to identify their purpose and provide the right value to their customers, if they want to keep them loyal”.
BEATING THE RETAIL ODDS
The retail environment is fragmented and tough. Across the continent, everyone is fighting for growth. Inflation continues to be a main concern for consumers feeling their wallets are squeezed, big traditional brands are facing an onslaught of challenges from smaller, more agile, regional players, and new formats and channels are emerging, making a competitive market even more competitive.
In just 10 years Nigeria’s physical bricks and mortar FMCG universe has nearly doubled in size. Today there are just over 1m outlets selling FMCG products, increasing in size by 500,000 outlets in under 10 years. However, with the emergence of Modern Trade we are seeing this growth being impacted in the short-term. It is also interesting to note that 50% of FMCG sales come from 60 LGAs in Nigeria. Given this retail landscape, the need is for precise and efficient distribution and trade strategies.
We see that the future of retail is not limited to just the physical stores or virtual channel. Streamlined services, digital experiences and frictionless commerce are converging with the ‘bricks and mortar’ and e-commerce worlds to shape new shopping experiences that provide personalised and on-demand ease, utility and simplicity.
At the same time, the Nigerian shopper is evolving and contributing to the shift in retail dynamics. Nigerians shop 30 times per month and they want value and assortment when they shop. Nigerian shoppers are price conscious; more than 70% are aware of prices and 95% notice price changes.
Abiodun Olawale- Cole, Consumer Insights Lead, Nielsen West Africa reported “There will always be demand for physical stores, but in the evolving retail landscape you need omni channel presence.
Retailers need to leverage their unique consumer relationships, using the right technologies and a focus on convenience, to expand their consumer touch points. Also, it’s important to understand the evolving Nigerian shopper and delivering to their needs and wants.”
Retailinfo – Lagos, July 11, 2019