The trend in online shopping is increasing. This is due to its market convenience and the e-commerce platform it offers, which makes it expedient and possible for consumers as they may continue to navigate to online shopping.
Already, there is strong confidence from international and local investors on the potential dominance of online shopping in the retail market. When this happens, the local retail shops need to adopt striking and alluring consumer strategies to remain in business. Such international confidence in the online retail was demonstrated recently when JP Morgan invested multimillion naira in Jumia, an online shopping organisation.
This is in addition to a later investment by Rocket Internet, a German-based e-commerce start-up incubator that has ramped up its operations at Jumia. This move has seen Summit Partners, a growth equity firm that invests $26 million in the Jumia brand across Nigeria, Egypt and Morocco, with new funds tailored for setting up more ventures across the African sub-region. “We seek to invest in companies around the world that build long-term value,” said Scott Collins, managing director/head of the Summit Partners London office, in a statement.
Other operators in the sector are confident of the growing online marketing.
With such confidence, growing in online marketing as Nigeria and other African countries become the hub and target of many e-commerce start-up incubators and venture capitalist all over the world, and it is possible that many consumers might continuously navigate to online shopping thereby denying local retail shops much patronage.
How then will the local shops survive this potential onslaught?
For instance, according to a report, research by Barclays Corporate in October 2011, however, predicted that mobile will come to represent some 5 percent of retail spending in the UK by the end of this decade – “In other words: an additional £18 billion is going to be spent by consumers via mobile devices.” In Nigeria, a total of N65.4 billion is spent by consumers annually.
Dayo Elegbe, a mobile marketing expert, believes that online shopping will have a profoundly disruptive impact on the retail landscape, saying “disruption of this type always creates winners and losers.” The combination of mobile’s intrinsic convenience, accelerating handset capability and increasingly personalised relevance will inevitably catapult m-commerce spending, he said.
While discussing with BusinessDay on the potential impact of mobile shopping on local retail shops, Elegbe says the acceleration in online sales – with m-commerce playing an increasingly prominent part in that growth – indisputably presents grave challenges to bricks and mortar retailers.
On how the brick and mortar retailers could wriggle out of the online attack, Elegbe says what matters most is how they respond to the seismic changes in the landscape.
While many people have concluded that mobile shopping will deliver a further, possibly fatal blow to brick and mortar retailers, he says the local retailers could tackle the challenge by embracing mobile. It is imperative that mobile is fully integrated into the core commercial and marketing models and “brands that embrace mobile application in a smart and timely manner have the chance to create and sustain real competitive advantage,” he says.
Given both its ubiquity and its accelerating functionality, mobile has clear potential to be the ‘glue’ that binds people to brands more tightly and persistently than any other channel. He says this could be realised through digitalising the physical. “When we carry a mobile, we carry a key that allows us to unlock the internet 24 hours a day. Retailers can exploit this to make every physical asset an invitation and gateway to a broader, more immersive digital experience.”
He says one of the inherent advantages the High Street enjoys is service and physical experience with product. Recognising that online shopping may offer convenience and an absence of ‘pressure to buy’ and lacks the assurance and advice that well-trained sales staff can provide, Elegbe says mobile also has a pivotal role to play here, it provides an efficient means of empowering your staff by giving them immediate access to more detailed product information and stock availability; puts them in control of compelling digital product demonstrations; or even (once you’ve developed a genuinely joined-up, cross-channel proposition) the ability to recommend and sell a superior solution from the inevitably broader online inventory.
Stories by DANIEL OBI
Media Business Editor