Big department stores slash prices and increase advertising budgets whenever sales are low. But many small retailers without the same financial muscle are stepping up efforts within the limit of their resources to attract customers. TONIA ‘DIYAN writes
The major goal of production and distribution is to enhance consumption. Wholesalers and retailers appreciate that profit can be made by satisfying consumers, hence shoppers are treated as king.
However, these are not the best of times for retail shop owners as it is the season of low sales. But they are not taking things lying low. They are daily evolving strategies to be on top of things.
Analysts have maintained that the existence of the informal retail sector would not be threatened by market circumstance, but rather, operators would bring in innovations to retain their market share.
They have also presumed a situation where the small shops will sustain their dominance with the ability to offer lower prices than the big shops who have invested much to achieve international standard. And these are already playing out.
The Delightsome Gifts Concepts, which sells gifts items, is a small retailer in Gbagada, Lagos. Its owner, Mrs Modupe Shopeju, said she had relied on her ability to quickly gather intelligence information about what customers want and then order such products immediately.
Chief Mrs Simidele Fadayomi, the Ïya- Oloja of Odu’a Model market in Ojota, Lagos, recently held a two-week discount in her lace shop, strictly through her private e-mail. Almost 1,000 shoppers, she said, responded and sales sky rocketed. “It was the best day we’ve ever had,” she said.
Small retailers are also using marketing tactics like the usual extra emphasis on customer service and sales promotions. But their most important step may be that they are trying to make the most of their inherent advantages over larger competitors.
“Small retailers are finding a variety of creative ways to play up the benefits of their size,” said Ivan Friedman, an expert on retail practices.
The ability of small stores to react quickly and directly to customers may be one of the most effective weapons they have said, Friedman, adding: “They can easily determine what is selling, and then place orders without wading through a cumbersome bureaucracy. They don’t have to go to the corporate office, wait for their request to be analyzed and then shipped to them.”
Miss Grace Chinemerem- Israel, who is a beauty consultant, said she was spending a lot of time calling wholesalers directly when popular items sell out, sometimes she said, “on a daily basis.”
“To speed up the process even more, I pay extra for parcel service to deliver my products.”
Similarly, Mrs Deborah Faleyimu , owner of Cake Treat, a cake shop at Omole in Lagos, said she was also watching sales more attentively than usual. “After the weekend, we’ll figure out some items we do not have on Sunday night, and then make them available the next morning,” she said.
In addition, small store owners say they often hear directly from their customers about new products and then quickly see how the items sell. A year ago, Mrs Modupe Shopeju said customers began telling her how much they liked an egg shape flower vase called the Arewa vase so she started stocking it. A week later, she sold all out. She re-ordered, and it sold out again in a week. Now, she said, she keeps a steady supply of the vase “You’ve got to pay attention to the feedback,” she said.
Small retailers also have an advantage over bigger competitors in other areas, particularly customer services, said Mrs Folashade Akinremi, a home management consultant “Stores are upping the ante with more personalised customer service, particularly if they’ve depended on that for sales in the past.”
Mr Kenneth Okeiyi, the General Manager of Green Mount Global Limited, situated in Lagos Island, said he makes sure his staff has a list of recommendations they can offer to panicky shoppers. He also offers free gift wrapping.
Taking advantage of those more personalised relationships, some retailers are also doing more direct marketing, especially through e-mail messages. Ms. Joan Philips of Corner Cafe is mailing special promotions to the people on her email list. “I probably wouldn’t be doing so much direct e-mail marketing if I were expecting a different shopping climate,” she said.
At Delightsome Books & Coffee shop, Ilupeju, an exhibition on gifts for employees and clients was held to promote sales in the shop. According to the owner of the place, Mrs Juliet Morgan, the promotion could add about five per cent to the revenue of the business.
Another crucial area for retailers of any size is smart use of the Internet. Consumers are now expected to do 30 per cent of their shopping over the Web, according to the National Retail Federation.
“If you don’t have a web site in this business, you’re at a competitive disadvantage,” Mrs Folashade Akinremi said. In some cases, shoppers are making their purchases in the store, but using the Web for comparison shopping, checking out prices and ensuring that products are in stock before making the trip, she said.
Small retailers are taking tips from the big stores, thereby, increasing their advertising spending, though to a smaller extent. Many of them now cater to more affluent customers; and stores that sell to that market will most likely do better.
There is need to stress the fact that “small shops” and “big shops” are rather indistinct and that the classification of a unit of business as big or small is different in different places and has changed significantly with the passing of time.
Big retailers suffer from high operational costs. However, the illegality of the operations of the small shops puts modern grocery retailers at a distinct disadvantage. Modern retailers have higher fixed costs; they cannot easily evade taxes because of their visibility and they have to source their supplies from legitimate channels.
The big shops, which are usually known for groceries, are also fast expanding to non-grocery items such as house hold items, clothing, furniture and appliances/electronics to expand their share in the country’s retail market which is dominated by the informal retailers.
A survey of the small and big shops revealed that prices vary according to commodities; some items are sold cheaper in the smaller stores than the big shops and vice versa.
A shopper, Mrs Chinaka Azuka confirmed that over time she has discovered that some items cost lower in small and traditional open markets than the big modern shops. For instance, she buys serviette tissue paper between N50 and N100 in a small shop in her environ, goes for N350 in Mega Plaza.
“It’s not everything that I buy from the big shops, you find out that the other smaller shops and open market still sell cheaper. I patronise them mostly because of the convenience and fun they provide to shopping experience,” Chinaka said.
For Mary Ukah, she cannot buy items like children’s toys in the big shops which she alleged were inferior products imported and sold very costly to naive Nigerian consumers.
“Shopping in the big retail shops is very convenient; I can afford to dash in from the office and pick some items without sweating unlike when I go to the open markets. But there are things I cannot buy there because they are very expensive and sometimes inferior; I usually make out time on weekends to go to the market where I can get enough variety and at cheaper rates.
People actually go to these big stores or the open markets to purchase items because of their relatively low prices while others prefer them for a quality shopping experience.
