Warc Blog

Retailers face challenge in Nigeria

14 January 2014
CAPE TOWN: Retailers and brands looking to take advantage of Nigeria's growing consumer culture need to tailor their approach to the local market, which industry figures have emphasised is unlike other African countries.

"Retailers wanting to crack this market need to customise their models to meet the unique consumer needs and aspirations," Norman Sander of commercial property consultants Broll Nigeria, told How We Made It In Africa.

He admitted that doing business in the country could be challenging. "But if you can offer middle class Nigerians the right price, product, service, quality and choice, the sky is the limit," he added.

When South Africa's Woolworths announced in November it was closing its three Nigerian stores just 18 months after opening them, it cited high rental costs, duties and supply chain challenges as the reasons.

But observers also pointed to a failed strategy. Sander explained there was little brand recognition for South African retailers in Nigeria, where consumers were more familiar with US and European names.

It was a point echoed by Dianna Games, CEO of Africa @ Work, a South African-based company that aims to facilitate and improve business in Africa through the provision of research and networking opportunities.

"Because South Africa's retailers are household names at home, there seems to be an expectation that Africans elsewhere will be familiar with the brands," she said, but that was not the case.

"Wealthy Nigerians travel extensively, but their favoured shopping haunts are in the UK and US," she noted. "As a result, they are more familiar with the down-market Woolworths brand in the UK that went out of business a few years ago than with the more upmarket brand so beloved by South Africans."

She added that much of the emerging middle class was "at the more unstable end of the definition" and consequently price conscious and brand savvy. "If they are going to pay higher prices for goods, they want global brands they recognise; brands that tap into their aspirations," she said.

In terms of marketing, Sander suggested digital and social media were effective tools for retailers, thanks to the mobile phone boom and a tech-aware population. "Offering guarantees and sticking to these promises is a tremendous way of growing customer loyalty," he added.

Data sourced from How We Made It In Africa; additional content by Warc staff

 
Envelope
EMAIL UPDATES

Sign up to Warc News – free daily bulletins on brand and market strategy, digital media and innovation


 

News content feedPrint