When the federal government of Nigeria declared a lockdown in March 2020 at the onset of the pandemic, retailers like Chuks Ogadinma had a premonition that it could be the last time his shop would be opening for business.
How would he feed his young family of four if there was no one coming to the shop to buy drinks? But should the drinks finish, where would he get new supplies if the roads to the manufacturers were closed? Importantly, would he be able to access enough money from the bank to buy those supplies? Ogadinma raked his head for answers until he stumbled on a Konga advert inviting consumers to order drinks online.
Read Also: Why brands should see opportunity in new digital reality
There was also an advert from Coca-Cola giving retailers the option of ordering their supply directly from online. This would give Ogadinma the advantage of bypassing the wholesalers and save costs as well as make a healthy profit. He promptly placed an order which arrived within 24 hours. The excited retailer says he now orders most of his supplies online.
Since the pandemic struck worsening not just the health conditions of about 191 million people in the world, but also the economies of many countries, Fast-Moving Consumer Goods (FMCG) have had to adopt new strategies to survive. Like many other industries, these strategies have to be digital-centric.
The lockdown imposed in countries like Nigeria affected the entire hospitality industry, including restaurants, bars, and hotels where people usually after a day’s job to relax, drink, and party with friends. As hotels locked their doors, the companies that supply beverages and other products took a hit.
Going online however has changed the story, somewhat. Sales are not yet pre-pandemic levels but reports now say they are starting to improve.
“The online situation now changes the game where you have to go to meet the people where they want it, how they want it, and when they want,” Uchenna Uzo, a consumer behaviour expert told BusinessDay. “And that means thinking carefully about the types of products you place online, the right price, the right way of advertising and you have to do it in a way that what you are saying online does not conflict with the experience they are having when they purchase offline.”
In a recent report, Coca-Cola Nigeria said it has grown three times in e-commerce sales so far in 2021 after pandemic forced a change in consumer habits in Africa’s most populous country.
Nigerian Breweries also stated in its COVID-19 report that deepening its digital strategy to targeted audiences helped it navigate the turmoils of 2020. This ensured that its revenue loss was not as pronounced as other industry players. For instance, the brewer’s third-quarter 2020 revenue was at N234 billion compared to N235 billion from the same period in the previous year, representing a 0.7 percent loss.
With an average beer consumption of 12.28 liters per year, Nigeria leads the top 10 biggest beer-drinking countries in Africa making the sector increasingly lucrative despite the pandemic.
Uzo said one of the advantages FMCGs in the drinks segment derived was the opportunity to obtain real-time intelligence on how consumers feel and what the sentiment was at each point in time. Analysing this intelligence could help these companies in decision-making in terms of what is the right mix of products you should sell, the price, and what time the products should be pushed out.
A 2020 Mastercard report has shown that the outcome of adopting a digital-first strategy for many FMCGs mostly resonated positively with consumers. The study showed that over 81 percent of consumers in Nigeria were shopping more online since the onset of the pandemic as data, apparel, beauty products, and FMCGs saw the highest surge of online activity.
“The very nature of e-commerce encourages the expansion of markets from a single location if the business model is right. For instance, an online jewelry maker in Ondo can now get the visibility she wouldn’t have gotten ordinarily if her shop was offline in Ondo,” said Tunde Odumeru, Managing Director, Brand Finance Nigeria. “With a good distribution model, this enhanced visibility can translate into higher revenue. The very nature of an online presence helps to increase sales.”
For many FMCGs, a digital strategy may mean increased revenue but it also requires good people with the right skillsets for the job. In that sense, training is critical.
“If you are a salesperson that is used to looking for people and selling to them directly, the online space is a completely different thing, you might not know who the user is or purchaser is. So it means having a different skillset such as tech-savvy, the right emotional intelligence to attract somebody online and to be analytical enough?” Uzo Said.
Many FMCGs are now deploying resources into training and recruiting new talents for a new future where meeting consumers at their convenience is the ultimate strategy. Would it mean ‘Goodbye to wholesalers dominance?” Ogadinma certainly thinks so.
