The month of May was recognised as Africa month – a time when the continent celebrates the founding of the Organisation of African Unity (OAU). In keeping with this celebratory mood, Africa has many other things of which to be proud: Retail is just one sector that offers opportunities and has many success stories to share…
Known as the “last frontier”, Africa offers what no other continent does: a strong, emerging middle class of over 350-million people (estimated to grow to 900-million by 2040). The continent has approximately 1,32 billion people, accounting for 17% of our planet’s human inhabitants.
Innovation, technology and digital disruption are driving change in the Retail space across the Africa and creating unprecedented opportunities, which smart Retailers and entrepreneurs are leveraging. — This would account for six of the 10 fastest-growing economies in 2018 were African countries.
Here are just a few of the opportunities and success stories:
Africa is set to undergo a digital retail boom. IT News Africa says that more and more African consumers are going online and their commercial habits are evolving faster than any other demographic in the world. By 2020, consumer spending in Africa has been forecast to exceed USD $1 trillion annually according to McKinsey & Company’s Global Institute.
Social networks are experiencing huge successes in Africa, transforming Retail, with several retailers or start-ups offering platforms for consumers to take on some aspects of the retail value chain.
Africa’s poor infrastructure and logistics challenges have necessitated the development of unique solutions for the shopping experience in Africa. The high use of mobile, strong use of social media and a strong sense of community have led to the African flavour of the platform economy.
International retail software company, Vend, recently reported that in 2018 Africa’s independent retailers enjoyed sales volumes of 25% higher than the global average. Vend’s Retail Benchmarks Report for 2018 compared data from over 13 000 retailers around the world. It showed that, globally, the average independent retail store makes about R315 768 per month, with a gross margin of 51%. However, independent retailers in Africa are showing far better results, with a revenue 9% higher than the global average. Across Africa, monthly sales volumes per store were 36% higher than retailers in North America, and 5% higher than those in the United Kingdom.
M-payment, e-commerce and m-commerce are transforming Retail in Africa, giving rise to major players like M-Pesa for m-payment and Jumia and Konga for e-commerce.
Africa online retailer Jumia—valued at around $1 billion—will soon be listed on the New York Stock Exchange. The Nigeria-based Pan Africa e-commerce platform was founded in 2012.
WeShopUp, launched in 2014 by the Cameroonian start-up, Infinity Space, is an e-business marketplace in which people do crowd-purchasing to obtain quality products at the best prices. It combines the crowd-funding concept, e-commerce and mobile payment in an innovative way to enable people with different levels of income to afford quality products at the best prices.
Facebook drives retail sales in Africa
As at the end of March 2019, there were 492,76 million internet (www.internetworldstats.com) users in Africa. Of these, 204,304 million were Facebook users. Retailers love Facebook as a channel because of its wide reach, content options and high frequency of use. In a recent report, Stackla surveyed 1,590 consumers and 150 Business-To-Consumer marketers through which it gained insights and understanding around the types of content consumers are creating and referencing, and how they are influenced by various buying experiences. The report found: • 90% of consumers who were surveyed say that authenticity is important in content when deciding which brands they will both like and support • 67% of consumers say it’s important for brands with which they engage to provide a personalised experience • Travel – 89% of people said they would post about a positive travel experience during or after their travels • Dining – 85% of people mentioned that they would post about a positive restaurant experience after dining • Beauty products – 65% of people surveyed would post about a positive health or beauty product they have purchased or used.
Buyers read reviews prior to their purchase and store visit; they also post reviews afterwards of their experience, the product or the service they received, and even the cleanliness of a store.
Maximising Facebook to Drive In-Store Traffic
One of the core marketing objectives of retailers is to insert themselves into the various stages of the buying or research process that a person goes through when making a decision to buy.
The Facebook touch points throughout the user journey are set out to:
- Show a targeted, well thought-out, and relevant advert to a Facebook user.
- Ensure the content on your Facebook page is relevant and you answer the most commonly-asked questions in your posts.
- When a person engages with you, be professional and respond as quickly as possible. Encourage them to come in-store if they can. This is also your opportunity to shape the conversation to highlight what makes you different and better than others.
- Make sure you can be easily found on Map apps such as Google Maps, Apple Maps and WAZE.
- Encourage people to take pictures in-store; remember, they will take photos anyway and this way you can have them take and publish great shots.
- Once the posts have been put up, find them using a social scanning tool if they are not on your page and follow the Online Reputation Management rules: a. Target Passions b. Minimise pain c. Leverage praise
With over 200-million Facebook users in Africa, the platform can be a key part of retailers’ strategies to drive more people in-store.
Despite the strong growth of e-commerce in Africa and the multiplicity of online offerings, online purchases still account for less than 10% of global retail sales; in some African countries, the number is less than 1%.
Successful retailers of the future will be those who focus on creating innovative in-store retail experiences for their customers. Each of Africa’s 54 countries offer unique opportunities for retailers and entrepreneurs wanting to establish or expand their footprint in Africa.