For more than 90 years, Nielsen has provided data and analytics based on scientific rigour and innovation, continually developing new ways to answer the most important questions facing the media, advertising, retail and FMCGs. In this interview held in Lagos, GED NOOY takes a look on why innovations do not succeed and the role data can play in the retail ecosystem. RESEARCH INTELLIGENCE was there.
TELL US WHY INNOVATIONS FAIL?
Innovations fail because a lot of people fail to do the concept testing . At the best what some of them do is just small focus groups, but once you have done the proper concept testing , that can take you to the next level and what you start looking at is , is your packaging right, is your size right, is the picture right but a lot of people fail to do the testing and just depend on gut feel or may be small focus group . That is the first thing, another thing is a lot of time innovation is just done to extend the brand life instead of attribute innovation towards the customer needs, not looking at the actual customer needs. That is not true innovation.
HOW HAS NIELSEN BEEN ABLE TO HELP CLIENTS BE THE BOSS?
What Nielsen does typically is that we are able to create a benchmark so we look at the benchmark and what we do is to take all the sales and put them together as one single benchmark and then we can say to our consensual customers, how are you performing against the bench mark, are you going ahead of the benchmark or are you going below the benchmark? If they’re going below the bench- mark we start looking at why they are going below the benchmark and we go to look at the category level and how many segments are going down and down till we find what the problem is . It could be a distribution problem, it could not be in the correct stores or they might belong to the wrong persons. Competitors could have a different size, it might be wrong and we will be able to tell from the beginning of data. It all comes to what we got, which is the benchmark – the combination of all the sales from the company and then we can compare them to the benchmark.
WHO ARE YOUR MAJOR CLIENTS IN THE CATEGORY? IS IT THE SMALL SCALE, MEDIUM SCALE OR THE LARGE SCALE?
In tradition our clients are the multinationals. They are the Unilevers, the Diageos, all of them typically but we have got a lot of local giants who are our customers too. What we are trying to do is to create a crossing segment or a crossing tier that will allow us to get some of the smaller manufactures who may not afford the cost of data, so we are trying to go harder in expanding our offer to try and help as many clients or FMCG manufactures to subscribe.
HOW IS GROWING POPULARITY OF E-COMMERCE HELPING THE RETAIL LANDSCAPE IN NIGERIA?
E-Commerce in Nigeria is still in its infancy, so we haven’t done much from Nigerian perspective .But globally we have got huge e-commerce reach in markets like the States and Europe where we are partnering with some of the biggest online retailers. However in Lagos because it’s still so much in its infancy we don’t have a reach at it yet, but we see it starting to develop. So online business is still new and the penetration isn’t as high as other markets. So if you look at other markets closely the penetration is quite a lot larger.
So what are the challenges?
I think one of the big ones is trust, may be a lot of the population is unbanked and even the banked are not willing to disclose their bank details online but I know that some other platforms have made it possible that one can pay cash on delivery. But it just comes out to trust. A lot of people that talk to you would say they like to touch and feel before they buy .
Is there any role availability of data can play in the retail business?
Integral! Data makes you to be able to make good decisions. Without data you are going blind so you need to understand your performances, you need to understand whether your brands or products are growing or they are declining. If you are just looking at your own number , you don’t know how you are doing comparing to the benchmarks so you don’t know when your competitors are growing faster than you and how they are taking shares from you. If you are losing shares you need to know who is taking them and when you have got those data , you have got that insight that enables you to make proper decisions that you can activate change, but you won’t know going in blind . You cannot be a retailer or FMCG manufacture without looking at data.
What are the challenges facing retail business in Nigeria?
The challenges are so vast. One is, what is the right format, what is the right process you have, do you have the right assortment products in store? One thing that is common in traditional trade is cash . It takes cash to get the goods and if you don’t have the cash it may be difficult to get the goods from the manufacturer. That may not be the same in modern trade. Cash is one of the biggest issues in retail business.
As a research based company, you said your clients are mainly multinationals, how are you attracting SMEs who are afraid of cost in the research business?
What we are doing is that we are looking at more tier passing model where we can provide data that will suite them but it’s not as granular as what they need. We shine our light on what is happening around them on the category.
And that should be able to solve their problem?
It will show some highlights of what the problem is . It will show where they are because you need to know where you are sitting in a business and we help you empower the business but we still at the same need to charge for the business because collecting data in our market is difficult. You need physical bodies to go and audit it unlike our global markets that can just use what we call scan data which orders data from the tools so each time the tools scan the barcode we just get data straight to us but here we actually send people to go and order the codes physically. So it’s a cost to us .
what are you trying to achieve from this conference?
It’s a very good question. I am trying to bring back the trust in Nielsen. I feel people thought may be having been changed a lot with the times where we have doing a lot of work in the background , a lot of investments so as to sustain and hold the trust among the people of the legacy brands and we have been here for twenty one years and we know what we are doing. We will continue the learning, we will continue the investing in the area to give the truth to what is happening in the market.
Finally where do you see the research retail business in Nigeria going in the next two three years?
This is my own opinion and I am not actually looking at data. My own opinion is that I see a lot more of organized modern trade coming in whether it is the independent modern trade or branded trade but I see the likes of Addide model coming in where they got various store formats to compete with the local neighborhood traders .I still see a lot more proliferation of the big supermarkets like the Shoprite but I think the fastest could be smaller formats to compete with the local traders . With convenience, they are going to get a larger assortment from diaper to anti body to beer in the same place so I don’t have to go to three or four different shops to buy my stuff. I see a big proliferation of that within the next four to five years . I think some of them are already doing that. So I see it becoming modern more organized trade which will provide convenience .The issue is they are going to make sure that the process is competitive because of the traditional trade.
So is the kiosk culture going to die ?
No , I think the kiosk culture is so entrenched. I don’t sit with them and I see it will take years but I see a massive opportunity for modern trade to stop becoming your local modern trade corner store that you can supplement with the kiosk.