Retailers leverage on technology to boost sales amid coronavirus pandemics

CONSUMER SPENDING

The decision by government and some companies shut down businesses across the country so as to protect workers from the deadly coronavirus is a blessing in disguise for retailers as they now have the leg room to leverage technology to bolster sales.

Businessday checks shows consumers, who can no longer go shopping at brick and mortal shops because of the virus, now use social media platforms like Wassap and Instagram to order for food and groceries item that are delivered to at their door steps.

The impact of the pandemic is significantly disrupting business activities and consumer behaviour. The panic from the virus has propelled people to avoid large crowds and maintain social distancing.

“This is the best time for retailers to utilize this opportunity by harnessing technology to develop the right strategy to transforms sales and still remain relevant in this trying time,” Elijah Bello, a tech expert said.

Nigeria is by far the biggest African market with population size of about 200 million, of which 60 percent are youthful persons.

Given these favourable demographics, e-commerce is fast gaining popularity with the increasing number of people who are gaining internet access and are becoming IT literate, and the number of mobile phones has surpassed the population of the country.

According to a report released by Jumia, Africa’s online retailer, Nigeria has the largest mobile market in Africa with over 172 million mobile subscribers in 2018, accounting to a penetration rate of 87 percent of its population and represented a 6.4 percent growth increase, compared to 162 million subscribers in 2017.

Also, from Jumia, at end of 2018, there were over 36 million smartphone users, representing a penetration of 18.37 percent year-on-year. The availability of lower-price point phones remains the major driver of smartphone penetration.

But despite these tailwinds, e- commerce is still faced with challenges including lack of trust in online retailers, lack of adequate technological infrastructure and fear of inadequate online security of their data when making payments.

Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers said, “Grocery stores will become a frequent place for most consumers because they provide essential commodities needed daily. And this is the right time for them to take consumers online.”

Prince Ebeano, a popular retail store has already set up a Whatsapp platform to allow their customers make orders online and get it delivered wherever they want. Also Quick Service Restaurant like Sweet Sensation is developing an App to allow customers have easy access to their menus.

Cheng Fuller, a retail consultant, says Nigerian retailers should focus on the “Click and Collect Model”, a new delivery method that combines online shopping with real-life transactions.

“A lot of e-commerce retailers are now testing this model, where customers can make a purchase online and choose to collect their purchase at a pre- chosen location, rather than have it delivered to their home. It offers customers full control over the delivery of their products with e-commerce players providing different options for collection fulfilment,” Fuller further said.

A further research of the model showed that it eliminates unprofessional delivery services and comes with zero or minimal added delivery costs. The customer is also able to check the quality of the product and return it to the store in case of any problem or if the product does not meet the required standards.

Globally, housebound consumers are turning to online groceries for their daily food supply. According to Chinese online retailer Jd.com, China’s online grocery sales grew 215 percent year over year to 15,000 tons during a 10-day period between late January and early February.

Also due to concerns of food contaminations during deliveries, innovations have been spurred in contactless pickup and delivery services. Companies like Mcdonald’s and Starbucks are increasing delivery services that limit human-to-human contact, and orders are packaged to keep them free of contamination.