Every marketer aspires to control the consumer’s future. Yet, one thing we have learned from the COVID-19 pandemic is that the change we thought we had years to prepare for can happeninstantaneously. One sharp effect of the pandemic has been a steady change in consumer behaviour and a shift in customer interaction. Consumers expect that brands know who they are, where they are, what they like, what they can afford. These consumers are fast maturing and becoming digitally savvy.
Many times, marketers think strategically about the future only after the destruction of present success. Are you a marketer based in Africa? Look at your business and analyze your company’s ability to shape the future. Are you a pace setter or a pace follower? Do you spend the bulk of your time maintaining the current status quo or do you actively orchestrate the consumer’s future? These are provocative questions that marketers seeking to understand and create the future of consumer marketing must answer. To create the future, you must first understand the present.
Africa is the second largest continent, with a population of 1.3 billion people. The continent represents almost a quarter of the world’s population and is more populous than Europe, North America and Oceania all put together. There is little wonder why it remains a very attractive consumer market for competing brands across different industry verticals, attracting “big tech” companies, such as Facebook, Google, Amazon, Microsoft, Twitter to power digital transformation opportunities.
Africa is not a country!!! Not only do Africans in different countries speak different languages; they also make buying decisions differently . The average African Consumer is young, trendy,aspirational, connected and willing to spend. 53% of income earners in Africa are between 16 and 34 years old—an age group that tends to be more aware of and eager to try new products. The African consumer wants a personalized customer experience and will pay for that experience. Three key peculiarities currently define the African consumer and every marketer must know them:
Africa is a Mobile-First Consumer Market: In fact, some may argue that Africa is a mobile-only market when you compare it to the western world that has significantly higher web-usage. As at 2018, there were 774 million sim connections in Sub-Saharan Africa, and this is projected to grow to 1 billion (i.e. 71% of the SSA population) in 2025. Deloitte carried out a survey that revealed that most young Africans use mobile phones as the major source of access to the internet. One in five young Africans has bought a product or service with their mobile phone. Seven in ten young Africans use social media sites on their mobile phones. Mobile technology remains the single most relevant touch-point to effectively reach target audiences in Africa.
Largely an Offline Market: African consumers on mobile are not online. In fact, 71% of Africans today are offline. The Central Bank of Nigeria reported that the volume of USSD transactions from January to August 2020 (i.e. offline mobile transactions) was almost 20% higher than mobile app transactions. The expectation is that theoverall mobile transaction volume will continue to rise while the gap between USSD usage and Mobile app usage will continue to expand.. Offline engagement channels (such as SMS, USSD) are therefore absolutely key in reaching the African consumer. This underscores the importance of playing with the local context in mind.
A sachet economy: African consumers have limited shoppingbudgets and marketers selling unrelated brands compete for a share of the consumer’s wallet. For instance, airtime is a major competitor to alcoholic beverages in Nigeria as marketers of both products compete to get a piece of the consumer’s pie. Consumers are going for sachet sized offerings that also confer a premium status. Think about the otherwise excluded consumers who can now consume a typical luxury beverage such as Bailey Irish Cream. At 750ml for over 100 dollars, it was out of reach for many consumers. Marketers who understand the spending power of the average Nigeria havecreated a mini sized SKU of 100ml at less than 1 dollar, which is now available to lower income consumers.
Creating the Future
Creating your future involves reflecting on these insights and realizing that Africa’s consumer marketing will be increasingly data driven, mobile friendly, blended (offline and online engagement), culturally nuanced and personalized. How can marketers repurpose skills and capabilities to create the future they wish to see? Three tips are useful.
Shift from a mass-market approach to a data-driven marketing approach: Marketers who use data analytics to uncover meaningful and unexpected consumer insights will win. The world is using big data based on artificial intelligence to generate consumer insights, customize offerings, predict consumer behaviour and determine the preferred touch points of consumers. You can ride on this wave to measure campaign efficiency, resource allocation, and conversation rates. Data-driven consumer marketing will help you engage consumers who will contribute more than $400 billion in total consumption growth in the next decade. (McKinsey, 2019).
Execute marketing efforts through the lens of the local context: Africa is unique. It is a mobile-first market with 71% of the mobile users offline. Evidence from Terragon, a leading data and marketing technology player in Africa reveals that there are 70% higher conversions with offline channels for financial service campaigns in Nigeria. Yet, 2018–2020 records show that TV, video and OOH Ad spend jointly accounted for 64% of total advertising spend (amounting to $872million) in Nigeria and 31% of in South Africa (amounting to $2 billion). These channels are simply “spray and pay” channels that lack the precision to target Africa’s mobile-first consumer market. Therefore, brands that want to win must use omnichannel marketing strategies that include offline capabilities in order to capture most of the market.
Personalize engagement: According to Gartner, “Customers expect recognition and want their experiences personalized”. However,customer concerns about the security and privacy of their online data can impede personalized marketing at scale. Marketers who balance “personalization” and “data privacy compliance” will earn their customers’ trust and brand loyalty better than competitors.
Adopting these approaches will lead to significant wins for brands and marketers looking to win in the fiercely competitive African landscape. As an African proverb wisely says, “the future belongs to people who prepare for it today”.
References
Deloitte. (2014). The Deloitte Consumer Review – Africa: A 21st Century View. https://www2.deloitte.com/content/dam/Deloitte/ng/Documents/consumer-business/the-deloitte-consumer-review-africa-a-21st-century-view.pdf
https://www.cbn.gov.ng/Paymentsystem/ePaymentStatistics.asp
https://www.statista.com/statistics/614932/nigeria-advertising-spending-medium/
https://www.statista.com/statistics/386540/advertising-expenditures-by-medium-south-africa/
https://www.statista.com/statistics/1133320/mobile-subscriptions-sub-saharan-africa/
Boudet J., Huang J., Rathje K., Sorel M. (2019). Consumer-data privacy and personalization at scale: How leading retailers and consumer brands can strategize for both. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/consumer-data-privacy-and-personalization-at-scale
Moore S. (2019). How to Balance Personalization With Data Privacy. https://www.gartner.com/smarterwithgartner/how-to-balance-personalization-with-data-privacy/
