This time, MA Fashion Retail Management student Timmy Tikolo takes a look at the changing face of retail in Nigeria.
Guest blog: Experiential or Experimental in Nigeria?
Experiential retailing is the ‘it’ word in fashion retail right now. It is everywhere. These days, people talk about entertainment and the need to provide more than just a shop that sells merchandise. Experiential retail is intended to attract shoppers who have increasingly become distracted by social media and e-commerce. It involves the implementation of digital solutions that help deliver great in-store experiences to customers.
Nigeria is a key market in Africa. It is the biggest economy on the continent and is home to over 180m people. Nigeria’s GDP has consistently grown in excess of 6% annually for the last 7 years. In 2014, there were over 15,900 millionaires in Nigeria and the country was home to over 200 High Net Worth Individuals (HNWIs) with collective wealth of over $30m. Nigeria is currently enjoying a period of societal change and economic growth as a result of its burgeoning middle class. These changes in Nigeria have led a large number of retailers to target the country as a potential new market to locate their businesses.
Additionally, Nigeria’s fashion industry is currently experiencing an unprecedented level of exposure. The country’s e-commerce is also growing rapidly and there have been a number of reputable retailers that have recently entered the market, one of which is ASOS.
As witnessed in the rest of the world, e-commerce provides benefits such as convenience, and ease of use, which are just about enough reasons to distract consumers from visiting brick and mortar stores. Therefore, it is imperative for Nigerian retailers to consider implementing digital solutions to captivate consumers.
The issue however, is that the Nigerian business climate is particularly difficult to trade in. It is no secret that the presence of technology is key to experiential retailing. Technology of course is powered by electricity. Here, a major problem presents itself: Africa’s largest oil producing nation cannot provide stable electricity for its citizens. Therefore, a retailer who installs digital solutions is directly increasing its fixed costs by having to generate the constant electricity required to power these solutions.
Electricity is not the only problem, there is also the issue of a skills deficit within the workforce. Finding experts who might be able to provide installation and after-sales support for these digital solutions is not only difficult, but very expensive. In some cases, experts might have to be flown in from other countries to provide the support needed.
Finally, let’s not forget also the important issue of security. With the overwhelming polarisation of wealth in the country, it comes as no surprise that there is a high level of crime. Thus, fancy bright digital solutions can become attractive targets for thieves.
That being said, the Nigerian retail and recreational landscape is still underdeveloped. Retailers that can create entertaining experiences for their customers and make use of the 3rd space concept to encourage customers to linger longer could be effective in the country. Although, it should be noted that a large number of HNWIs send personal assistants to shop on their behalf as well as request shop owners to visit them in their residencies. Therefore, this raises the question as to whether experiential retailing can be successfully implemented in a colossally uneasy business environment such as this.
Currently, experiential retailing is a very experimental concept in a nation ranked at spot 170 (out of 189) in terms of ease of doing business.
Words by Timmy Tikolo, MA Fashion Retail Management