Operators within the Nigerian consumer goods space are adopting new strategies to cushion the effects of a decreasing consumer spend trigged by a headline inflation currently pegged at 24.08 percent.
Speaking during an interactive session with newsmen, Ade Sun-Basorun, Chief Executive Officer of FoodCo Nigeria, a diversified consumer goods company and a top 5 retailer in the country, noted that the shifting market dynamics has motivated operators to think outside the box in order to stay in business.
He said: “Given its dependence on a buoyant consumer class, it should come as no surprise that the consumer retail sector is one of the most severely impacted by the present economic headwind.
However, many operators are exploring alternative solutions to meet the challenge. For instance, rather than raise prices, some FCMGs opted for slight reduction in product sizes so that they remain within affordable margins.
“Relatedly, there is also the introduction of miniature brand variants which also seek to meet consumers at a price point that they are comfortable with.
“Re-computation of recipes and reconfiguration of product designs is another option been explored. By re-visiting manufacturing and recipe formulation, companies aim to optimize costs while safeguarding product integrity. These innovations also extend to packaging where inventive designs are explored to streamline costs as operators continually explore avenues to reduce packaging expenses,” he added.
Sun-Basorun further charged operators to double down on digitalization in order to enhance their operations, deliver better customer experiences as well as for better targeting.
“I believe technology holds the key to unlocking opportunities within the Nigeria consumer goods space. We are all familiar with the power of e-commerce and how big players like Jumia and Konga are driving innovation and adoption within the space.
*However, social commerce is also having a positive impact on the consumer goods space.
The beauty of these platforms is that they offer targeted marketing opportunities for merchants while also creating a sizable channel for consumers to shop.
“Individually, they are minuscule but when you add them up it’s a real disruption to the system. For us in modern retail, digitization will continue to play a key role in how we engage and deploy resources – from procurement to inventory management to payment, all the way into digital services as well.”
