Some Quick Service Restaurants (QSRs) are setting up street kiosks as part of their marketing strategy to boost sales and improve customer service.
According to a BusinessDay survey, restaurants in Lagos – Nigeria’s commercial hub such as Mr Biggs, Chicken Republic, and Sweet Sensation – pioneers of the QSR industry have been using the Sell-on-the-Go marketing strategy and setting up express kiosks since 2019.
These kiosks – small, stand-alone booth-like structures placed in areas with high foot traffic – are used by businesses to reach their customers informally. It is a type of direct, low-cost marketing strategy.
Uchenna Uzo, consumer expert and faculty director at the Lagos Business School said many Fast-Moving Consumer Goods (FMCGs) are packaging their products into smaller bits to make it easier for hawking and restaurants are late in the game.”
“The power of Selling-on-the-Go makes you more accessible to the end consumer, it helps you to break down what you are offering in smaller sizes that people can afford,” said Uzo.
Uzo added that QSRs give immediate market information on the products people buy frequently, the size, package, and quantity they want, noting that it also helps in price testing like what proportion, menu, the right price point that people are willing to pay for among others as well as brand visibility.
Similarly, Ayorinde Akinloye, a consumer analyst at United Capital Plc said QSRs are going retail as much as possible to offer more products and services.
“There is also the need to go beyond the mega outlets because it is expensive and difficult to run. It is cheaper to run small kiosks,” Akinloye said.
Two recession witnessed in the last five years has led to high inflationary pressures, low purchasing power, and falling incomes of consumers. Apart from QSRs going into smaller formats, FMCGs now package their products into smaller sachets to target the larger segment of the economy.
Some of the advantages of using kiosks are that it improves customer buying experience, increases customer base, reduces cost of the business, and increases efficiency among others.
Read also: UAC Restaurants increases retail offering to consumers, opens bakery in Lagos
“A lot of Consume Food Service operators are now trying to explore format minitralization. It is a tread of trying to increase transaction numbers and reduce cost,” Cheng Fuller, a retail expert said.
Fuller advised that if restaurants want to penetrate neighbourhoods and reach more consumers for profitability’s sake, they should try to increase their outlets but only in smaller formats because the larger ones are expensive.
In other countries like the US, UK and France, kiosks are well established there but it is the self-ordering ones that they use. With the help of technology, this type of kiosk allows customers to select and pay for products and services without the need for human interaction.
But the kiosks in Nigeria do not use technology. What consumers do is walk into the kiosk, look at the menu/price list and place their orders.
“One way to meet customers is to give them the go-to service that meets their needs. So, the more you increase your point of sales, the more sales you make,” Wale Abioye, a manager at Sweet Sensation said.
He further said, “If you look at the demography of those who are patronizing these small kiosks, they are within the age group of 16- 30 something years. So, all brands have to go that direction.”
According to the Association of Fast Food and Confectioners of Nigerian (AFFCON), the Nigerian food industry is estimated to be worth over one trillion Naira and is also one of the best-performing industries in the country.
A recent report by Euromonitor International, a London-based market research company, predicts that 2021 might likely see some street stalls/kiosks strive to improve their customer service by offering more attractive outlets to better compete with limited-service restaurants.
“On the other hand, some restaurant chains are launching their street stalls/kiosks as they seek new sources of revenue. Mr Bigg’s is particularly notable in this regard, as its Mr Bigg’s Express kiosks use a similar bold red and yellow frontage as its limited-service restaurants,” the report stated.
Although it is an interesting opportunity, Uzo advises that QSRs should not copy each other or else their business could shut down.
Fuller also said the restaurants should not copy each other blindly. “They should do it based on their unique financial constraints and benefits that would accrue to them.”
