As we prepare to celebrate the 207th anniversary of Charles Darwin’s birth on February 12, it seems appropriate to recall one of his most famous observations. This is, “It is neither the strongest of the species that survives nor the most intelligent. It is the one that is the most adaptable to change.”
Nigerian businesses are today facing the prospect of adapting to meet two very important and unique developments. First, the challenges brought by what is turning out to be a slowdown in our economy, and second, engaging with the most powerful development in the business world since the Industrial Revolution – the Internet.
In our emerging digital economy, with 24-hour news coverage, instant access to information and a proliferation of technology and devices, it is becoming clearer that our businesses will require strategies different from those of the past. It is speed, not size or strength, which is now key to survival.
Consumer behaviour is changing rapidly as people look to the web for information, interaction with friends, researching products and services and making purchases. As the realities of dwindling oil prices bite deeper, this change in behaviour accelerates as consumers use the Web to hunt for value and bargains. The formula for success in these times is simple: keep up with the consumer or risk losing space to hungrier, and nimbler rivals.
But there are strategies that have been proved to work in countries with a high number of online users like ours.
During the financial crisis that rocked most parts of the West in 2008, old high street stores recorded dropping sales numbers, while stores that had wisely invested in their online operations recorded increase in sales. M&S, for example, saw its online sales increase 29 per cent during the third quarter of that financial year despite the UK sales, falling 7.1 per cent. Debenhams Direct, the retailer’s online arm, showed year-to-date visitor numbers and sales up 39.2 per cent and 37.4 per cent respectively. Online retailers like Play.com and Amazon also continued to grow strongly.
Even these figures underestimate the influence of the web on spending decisions. Many more purchases from cars to phones, from holidays to meals are researched online with prices compared and customer reviews checked before they are bought in person. This is particularly true in Nigeria – where the worth of the ecommerce sector is estimated to be in the range of $5bn. Not only are more Nigerians getting online by the day, more people are turning to online sources to better research and compare stores before purchase. According to a recent Consumer Barometer study by Google, 45 per cent of people who purchase online researched the products on the web.
The other great thing about having Nigerian businesses take advantage of the web is that we can then begin to reach markets beyond our shores. This in turn will shift the flow of currency inwards.
Like Nigerian online stores Konga and Jumia, the potential of the web has also enabled hundreds of thousands of small niche firms to launch and prosper. They have grabbed the chance that technology and social change have brought to market their products and services to far more potential customers than was ever possible before.
Search marketing allows savvy firms of any size to reach new customers, by targeting relevant advertisements to consumers seeking their products and services. The wealth of digital information afforded by the digital world means businesses know exactly how much it costs per click on an ad, exactly how many times consumers are searching on their products and exactly what people are doing on their websites. This removes all the guesswork from marketing so that there will be no waste in spending.
It is this entrepreneurial spirit and the technological advances that will help to lead us out of the current economic situation. This is the task of entrepreneurs and the well-run, adaptable companies, which stay focused on the changing needs of their customers and are ready to succeed.