Following the events from July 2014 – the crash of oil prices in the international oil market, drop in external reserves, scarce foreign exchange, high inflation rates, unfriendly monetary policies etc. All of these events penetrated the economy as increased cost burdens on the everyday consumers. That is, it became more expensive to buy and transact goods and services than it used to be.
Not surprisingly though these burdens came in through highly consumption driven sectors which include: utilities (Housing, Water, Electricity, Gas and other fuel), education, clothing and footwear, food and transport. It implied that the average consumer has not remained the same since July 2014, basically because disposable incomes or monthly income available to spend after tax and some savings have been made were smaller in purchasing power than before and secondly because cost implications on the consumer never fizzle out so quickly as economic indicators improve.Additionally in the case of Nigeria, we have no structures for medium to long term economic recovery that holds significance to the everyday consumer.
Bearing this in mind the Nigerian consumer has is experiencing:
Increased spending (due to increased costs on inelastic consumables not higher incomes)
Limited budgets and therefore, tougher spending choices
Price and brand sensitivity.
Need for more options to choose from
Need for convenience (Saving time with little or no extra cost)
Against the background, brands playing to win, keep or grow customer loyalty with same old techniques are naturally setting up for failure. To reach customers and increase market share, businesses need to re-invent business models to take new strategy that can only come by understanding changing consumer demographics and preferences, with drivers to point new market demands and opportunities.
This would further require a good level of market research and engagement to produce customized intelligence. Customized intelligence would therefore be the new normal and deciding factor on what the management should keep, eliminate or innovate on within the business model. This would guide on maximizing and expanding existing markets, as well as the route to new markets.
Extracted from our quarterly business outlook conference. To request for the presentation or book a strategy session please email email@example.com