Doing business in the present world has significantly been disrupted. Shoppers do not need to visit physical stores to do their shopping. They can do so from the comfort of their bedroom via a computer or an internet-savvy mobile phone.
With the geometric growth and proliferation of online retail businesses, you would think that the traditional brick and mortar businesses would have gone into extinction. Fortunately or unfortunately, this is not the case; it appears that offline stores still remain relevant and resilient.
Traditional Brick and Mortar Stores
To describe yourself as an entrepreneur in the past, you have to own a physical office or store where the customer walks in to purchase an item. But, there are quite a number of factors working against this. For example, in Lagos, many people are quite busy that they do not even have the time to visit these physical stores. You can add the Lagos traffic and also the time you spend scurrying from one shop to another to purchase all the items you want. Here, convenience is not the watchword.
The 21st Century shopper
Offline stores are now seriously under threat by online stores. The edge online stores have over the traditional store is convenience. It is very convenient to shop online. A platform like Jumia which pioneered ecommerce in Nigeria has shown that this is actually the case. The 21st-century shopper doesn’t want to jump from one store to another to make their purchases.
Other reasons why online stores seem to be gaining momentum include (1) the possibility to reach more customers (2) You don’t need to break the bank to own an online business (3) It offers more employment opportunities (4) You will get the best price i.e. it is affordable.
Are traditional stores under threat?
Undoubtedly, traditional stores are under threat because the competition to create value just keeps getting tougher. In fact, some offline companies have moved their entire businesses online while others have concocted or blended the two. They have both a thriving online and offline business. A good example of this is the print media. Many print organisations now have the print and online version of their newspapers. They have successfully transcended the challenge without necessarily shutting down their print version. Meanwhile, a good number of others have liquidated or folded up. Good examples of these are popular businesses such as Kingsway, UTC and Leventis.
Furthermore, even if some offline stores are still alive, they have been forced to take some drastic decisions as well as innovate so that they can be in line with the 21st-century business trend. And of course, you cannot argue that the future of business is online as many branded names like Jumia, Amazon, and eBay among others are evolving their business to better serve their online customers.
Recently, Tantalizers presented its financial reports to the public which rendered the quick service delivery business unprofitable. According to the Chairman, Board of Directors of Tantalizers, Dr Jaiye Oyedotun, three major challenges rendered the company unprofitable at the end of 2017: (1) Reduction in credit opportunities. (2) Weak consumer demands. (3) Stiffer competition.
In an opinion piece titled Dear Quick Service Restaurants (QSR), Take Your Menu Online To Become A Sustainable Business by Olukayode Kolawole, he urged Tantalizers to signup to Jumia’s food delivery services and watch how the business will grow in the next 12 months. This is one of the threats online stores are posing. It is either business shape in or shape out.
Can there be a meeting point between offline and online store?
Although an online business brings along with it affordability and convenience like Jumia is doing, we must not forget that there are a large number of Nigerians who are still offline. In other words, they do not have internet access and therefore, it is highly possible they will not perform their transactions online. This is backed by research as 53% of Nigerians do not have internet and most of them reside in rural areas.
Hence, the retail race, especially in emerging economies, cannot be won by online stores alone. There must be a synergy between an offline and offline to provide quality and sterling services to customers.
So who is winning the retail war?
Sorry to disappoint you, there is really no retail war. It is a matter of innovation. While online stores may appear to have the edge, offline stores are evolving because they do not want to vanish! Ultimately, if a business is offline, it is advisable to move online so that they will remain relevant. Not doing so could be catastrophic.