Managing Director, Nielsen Nigeria
The Nigerian consumer landscape is multi-layered and highly competitive with local manufacturers and retailers fighting for growth and a share of consumer wallets. Against this backdrop, they need to ensure measurement and analytics are a priority within their organization and make them a part of every single one of their business decisions, to help them identify opportunities and beat the odds.
With these challenges in mind, Nielsen Nigeria MD Ged Nooy thinks actionable data is now a non-negotiable when it comes to business success.
What are your thoughts about the importance of usable data insights in the increasingly competitive Nigerian Retail sector?
Data is critical in today’s day and age. Within a global context, companies can’t afford to act blindly but even more so in Nigeria, due to the high levels of fragmentation in the market and complex layering of business processes and logistical operations which makes it a challenging market to navigate. Nevertheless, companies need to use data to make sure they offer the right product, at the right price, at the right store. Unfortunately, there is a huge lack of reliable data within Nigeria but we pride ourselves on being able to offer reliable, unbiased data from a credible source that provides a version of the truth.
The reality is that gone are the days of using gut feel as there is a wealth of data available if you know where to source it. It also makes good business sense as the use of data reduces risk and enables better planning and helps companies win. Data also provides invaluable context as it is important not to look at the market in isolation and take an insular view. A lot of manufacturers just look at their own data to evaluate their performance. However, it is not enough at your data in isolation, without understanding how you have performed against your competition and the broader market.
How would you categorize the current state of the Nigerian Retail sector in terms of the growth of Modern versus Traditional Trade shopping outlets? How do you see this sector evolving/changing in the next 12-months?
Modern Trade (MT) is still in its infancy in Nigeria, with around a 5% share of FMCG sales on average, although certain category sales have a higher share, for example, Personal Care. Overall, it is showing good growth – albeit off a low base. We’re seeing a lot of growth of Modern Trade (MT) i.e. non-branded grocery stores and a lot of local branded supermarkets opening – for example, Adide – as well as the likes of some international chains entering the market. Nigerians are starting to shop at MT more, for reasons such as the convenience of having a one stop shop.
However, Traditional Trade (TT) offers the convenience of close proximity and still provides better pricing on certain items. In addition, Traditional trade outlets’ relationship with their customers runs deep, as it has often been built up over many years. Overall, more than 90% of FMCG sales within Nigeria take place within TT outlets in terms of value and volume and we don’t see that changing much in next 12-months, however, we do expect significant growth in MT within the next five years.
In which category of Nielsen’s data do you have the ‘highest-value’/largest or most diverse research panel?
Nielsen has five panels (Indexes) namely: FMCG, Beverage, Beer, Tobacco and Spirits. Each of these panels is diverse and is statistically designed to give an accurate representation of the entire retail market in Nigeria.
What is Nielsen’s greatest strength in your opinion?
Nielsen has been in the Nigerian market for 21 years. There’s huge potential in the market that can be further enhanced with measurement and insights. Coming into the market ahead of the curved has allowed us to help clients win. In addition, Nielsen have over 95 years of global market research experience, we developed the concept of market share, and have pioneered many innovations in the measurement and data analytics business. With over 21 years of operation in Nigeria, we now have an in-depth understanding of the local landscape, especially considering the complexity of the market; reliable data is hard to come by.
Our long-term presence in Nigeria also gives us the ability to produce trended data. An example of the value of this long terms data is that it helps us to create regression modelling where we can go back for years and use store level data to create pricing model simulations. We are also able to use our historical data to solve clients pricing and distribution needs. Our other big strength is our people. We’re lucky to employ highly qualified, passionate Nigerians who have a deep understanding of local markets, retailers and consumers that lead to the creation of rich insights and actionable data.
Can you talk about any interesting or unique ways that companies are using Nielsen to elevate their business?
Recently, we had a client who wanted to understand and measure their share of the hawker channel in Nigeria. This was a unique and exciting project because we don’t measure hawkers due to not operating from a fixed location. We successfully measured hawkers and hawking hubs to provide our client with their share and product availability within the channel.
Another example of an exciting recent project, was the use of our innovation product – Line Price Optimisation – to help determine whether or not a client’s new product innovation would be successful with consumers or not. With our analysis we were also able to forecast the expected sales for this new product as well as recommend the price point to launch the innovation at. What was unique about this, is that before the client spent all their money on a ‘go to market strategy’, we were able to let them know with a high degree of accuracy, whether their product would be successful or not, thereby reducing their risk.
Why are the data and insights that Nielsen produces so helpful to businesses and what kind of benefits/advantages do they allow for within an organization?
Nielsen is an independent provider of information. We’re able to provide unbiased data and insights and show our clients how they are performing against a benchmark as well as highlight the areas for the business to focus on, whether this is, for example, enhancing or changing their distribution operations, optimising their pricing or implementing an assortment strategy. This enables our clients to take the guesswork out of their planning and make far more informed and accurate business decisions.
What are some early success stories from this kind of data-driven approach to gaining consumer insights?
Given that our consumer insights division is able to measure any industry vertical, whether it’s Agriculture, Finance, Automotive, Oil, Manufacturing or Quick Service Food outlets, we are able to customise our research to specific sectors. So for example, we can measure how consumers react to changes in packaging, pricing, product offerings and advertising.
How do you think retailers and manufacturers could use data better?
You cannot improve what you don’t measure. In other words, if you don’t have measurement data you are working without direction. Manufacturers and retailers need to make data and analytics a part of every single business decision and ensure it is a priority within their organization. Currently, a number of organizations only use data as a way to measure their market share. They need to make the step change to using data each and every day to help them win within their respective markets. Data shouldn’t only be seen as a cost center but rather a real way to add value to a business bottom line. As one of my favorite quotes from Arthur. C. Nielsen states; “The price of light is less than the cost of darkness.”