The challenges facing the adoption of e-marketing and online shopping in Nigeria
In other to deal decisively with this topic, it will be worthwhile to establish some definitions of E-Marketing, E-Commerce and Online Shopping. These will help greatly in dealing with this topic as most of these words or terminologies are often used interchangeably.
What is E- Marketing : E-marketing refers to digital marketing, online marketing. It is the act of conducting marketing activities (products or services) on the internet. Electronic marketing when used in web can be classified as web advertising. E-marketing not only includes marketing on the Internet, but also includes marketing done via e-mail and wireless media. It uses a range of technologies to help connect businesses to their customers. It involves a lot and helps to create a business that creates a customer dialogue. Electronic marketing is a subset of Electronic business while Electronic commerce is a subset of Electronic marketing.
What is E-Commerce and Online Shopping : E-commerce and online shopping are two terms that many people use interchangeably. However, they are both different concepts. According to Candice V Cunningham, founder of the non-profit organization The Black Ecosystem in Chicago, e-commerce refers to all aspects of operating a business online, and online shopping refers to the online selling and purchasing of goods and services.
Online shopping, on the other hand, is an e-commerce activity which involves purchasing items on a seller’s website via credit or debit card, and having the item delivered to your home. Online shopping also involves searching for items online via web searches and by conducting online research. Online shopping is only one aspect of what we know as e-commerce, states Candice Cunningham.
With online shopping, customers purchase items from anywhere in the world via a digital platform. Access to a global marketplace is the best benefit of online shopping. Online shopping is also great for those who want to avoid stores and long line ups, and for those who are too busy to shop in traditional brick and mortar retail stores. Once you order a product online, it is then shipped to your home in as little as 24 hours mostly in advance countries. Having established the meaning of the terminologies, It becomes necessary to break the topic into three with identifiable factors that inhibits adoption viz
Ø Identify the factors that inhibit the adoption of Electronic Marketing in Nigeria
Ø Identify the factors that inhibit the adoption of Online Shopping in Nigeria
Ø Proffer Solutions for Both Electronic Marketing and Online Shopping in Nigeria.
There is likelihood of similarities in response to these questions as much as there are also differences.
FACTORS THAT INHIBIT THE ADOPTION OF E-MARKETING IN NIGERIA
The Factors are as follows: Inadequate Internet Infrastructure: The major platform for e-marketing is the internet. Currently, the level of accessibility to the internet in Nigeria is still low especially in most rural areas where majority of businesses do not have access to internet facilities and thus are unable to engage in e-marketing.
Cost of getting connected: Availability of computer and fast speed internet connection are prerequisites to the practice of e-marketing. The cost of getting connected is high especially for small and medium businesses. The high cost of accessing internet services is also a major factor in the adoption of e-marketing in Nigeria. In addition, the cost of maintenance is high. E- Marketing requires customers to use newer technology rather than the traditional media. The cost of acquiring this hard ware could be difficult for the customers/businesses to bear. Again low speed internet connections are major barriers.
Unreliable power supply: The issue of unstable power supply is a major challenge to e-marketing in Nigeria. The gadgets required for e-marketing are powered by electricity which is not readily available. Again where company’s build large website, individuals experience significant delays in content delivery.
Inadequate number of knowledgeable staff: Limited staff expertise caused by a general shortage of highly skilled workers and insufficient training is a major barrier to the growth of e-marketing. Computer literacy is still growing in Nigeria.
Buyers’ inability to experience the product: From the buyer’s perspective, the inability of shoppers or customers to touch, smell, taste or try tangible goods before making online purchase is also an inhibiting factor.
Perceived lack of security: Perceived lack of security of online transactions is also a major hindrance to the diffusion of e-marketing among businesses and customers. Security involves protection against fraud, cyber-crimes and hacking of personal information which can provide third person an easy access to information and its misuse. It is important to understand and address security concerns in order to leverage the potentials of ICT in delivering e-marketing applications.
Prevalence of Low Education: The prevalence of low E-marketing education is equally a major issue in electronic marketing in Nigeria. Not much emphasis has been placed on this.
Inadequate Infrastructure and Policy thrust from government also hinders the adoption of E-marketing in Nigeria. Civil unrest and political instability also plays a major role in inhibiting the adoption of E-marketing in Nigeria
Information Security Challenges: Some companies have been given away information about the customers even where such organisation provides guarantee on their website. The case of Cambridge Analytica comes to mind
FACTORS THAT INHIBIT THE ADOPTION OF ONLINE SHOPPING IN NIGERIA
The Factors are as follows: Preferring to pay with cash: Nigerians are accustomed to paying with cash (Old habit dies hard). It’s more familiar and tangible than digital payments. They want tangible evidence by way of receipt or teller as part of proof of payment/documentation. However, with digital payments, customers can make payments without any hassles. It is easy, fast and reliable.
Mistrust of online shopping: Since the entry of eCommerce in Nigeria, you expect that Nigerians would trust online shopping. Nigerians find it hard to trust things they cannot see and touch. Trust is greatly decreased in the online shopping environment due to lack of face-to-face interaction between both buyer and consumer and consumer and product (Cho et al. 2007). Online consumers not only need to trust online vendors, they also need to trust the Web itself as a transaction medium (McKnight and Chervany, 2002). The point here is that more people need to be educated about the fact that online shopping is more convenient and very reliable unlike other forms of shopping. Organisations should put in place measures to ensure that online shopping is easy and seamless. Hence, there won’t be no need to mistrust online shopping.
Product delivery: Tied with online trust is product delivery. It is the biggest fear of an online shopper in Nigeria. Knowing how fraudulent some platforms can be, product or service delivered may not be what you ordered, that is if it is ever delivered. At times it may not be the business, but the courier partner may be the problem. In Nigeria the issue of product delivery also spans across logistics, deliveries sometimes take too long, and tracking may be helpless because most online businesses do not offer that service. Nigerian customers also have to deal with rude personnel.
Last mile delivery: Nigeria’s transportation and delivery system are not equipped to deal with the booming eCommerce industry. Transport infrastructure is limited and the numbering of streets is not top notch. This has created obstacles for eCommerce merchants/online shoppers seeking viable delivery options.
Internet connectivity: Internet penetration has significantly increased in Nigeria. However, internet connectivity, mobile data and use of smart phones are still not sufficient compared with our population size. There is still some Nigerians that lack internet services which can allow them to order goods online.
New Technology Adopter Characteristics: According to Rogers (2003), the adopter of a new technology is typically younger, has a good income and appropriate level of education and more reactive to new innovation than the non-adopter. Rogers (2003) also indicates that innovative individuals have positive attitudes, ability to communicate with others and a high level of social participation. This trend has been confirmed by many researchers such as Madden and Savage (2000), Dobbins (2002), Mason and Hacker (2003), Chinn and Fairlie (2004), Choudrie and Dwivedi (2005) and Marchionni & Ritchie (2007) who concluded that adopters are younger, wealthy, usually have a good level of education, and possess more social mobility than those who adopt innovations later. In fact, there is an agreement that demographic or socio-economic variables such as age, education, income and occupation influences the adoption of new technology. Reason why so many people outside these bands find it difficult to engage in online shopping
Security Risks: In general, refer to the ability to protect against potential threats. However, in online environments, security is defined as the ability of the online company website to protect consumer information and their financial transactions data from being stolen during transmission. While perceived security controls describe the degree to which an e-commerce website is perceived to be secure and able to protect other information from potential threats (Hua, 2009). Since 2000, online services security has become gradually noticeable as a critical issue, in particular, after a number of well publicised attacks on outstanding Internet sites, such as CNN, Yahoo, eBay, and Amazon. As a result of the attacks; these companies lost approximately $1.2 billion USD. These are probably part of the fears of online shoppers in Nigeria who believed that if these big firms could suffer security breaches, who then is safe?
Privacy Issues: Consumers/Shoppers utilize online services because they offer convenience and save time. However, some researchers have shown that online consumers might refrain from using online services because of their concerns about privacy, including the safeguard of personally sensitive information which may be sold to third parties. Lessig (1999), mentioned that as the number of consumers’ purchases through the Internet increases, electronic vendors can increasingly obtain online buyers’ private information such as demographic profiles or consumer shopping behaviour which can be passed on to third parties. Lessig also claimed that companies might have no reason to protect their customers’ information if they are not aware of any responsibility concerning the social cost of privacy invasions.
E-Service Quality: Over the last 20 years, service quality and ways to measure it have been analysed a great deal (Buckley, 2003). However, there are disagreements in the literature on what e-service quality really means (Zeithaml et al., 2000). For instance, a number of studies have focused on the technical by considering the quality of the website itself. However, quality could be seen as a representation of the entire service delivered through the online service providers (Gronroos et al. , 2000) and characteristics such as age, gender, income level, and experience and technology tendency may affect the customer perceptions and evaluations of the service and consumer satisfaction (Zeithaml et al., 2000). Website quality is one of the most important consumer reactions in online shopping and its importance is reflected in the ability to intend buying in online shopping. In fact, service quality on the Internet is part of the consumer shopping experience and affects the overall satisfaction level; therefore, numerous studies found that e-service quality is highly related to consumer satisfaction (Balasubramanian et al., 2003; Pitt et al., 1997; Watson, et al., 1998; Zhang and Prybutok, 2005).
Accessibility: In the context of online shopping, accessibility can be defined as the extent to which the needed technology for e-commerce are available for individual to use. Perceived ease of use is defined as the degree to which a person believes that using a particular system would be free of effort. Also how easy and often citizens of Nigeria have access to all the technology needed for e-commerce like internet, credit and debit cards affects their chances of taking a stab on online shopping etc.
Data Cost: Among the factors that have been suggested to be inhibiting the adoption of online shopping decision is the cost of data. These can be defined as the total amount that a shopper will spend on data cost for online transaction. Many online shoppers in Nigeria believe that the cost of data is too high and that the money can be used for another purpose that will be more effective and profitable than the benefits that can be derived from online shopping.
Low Income Earners: These are people at the bottom of the pyramid who earn a paltry minimum/living wage. Survival wage earners with low disposable income finds it difficult to shop online as they don’t want to suffer any further tax on their already decimated income.
VAT & Shipping Cost: The online shopper feels cheated paying for VAT (7.5%) for every online purchase. This kind of inhibits them knowing fully well that if they make their purchase in an open market, they won’t be subjected to VAT or Consumption tax. Again shipping cost is always a deterrent from them shopping online. Situations where there are flat courier rate of say N1,500 for any location in Lagos and what the shopper wants to buy is goods worth N1,000. With 7.5% VAT, Consumption Tax and Shipping cost the shopper may end up paying up to N3, 250 for a good he/she can easily buy at the nearest Provision store for N1, 000.
Network reliability: This can be defined as the ability of company to rely on the transfer of its confidential and critical data over the internet, these can be caused due to the existence of out-dated web server or application that were not carefully installed initially (Soliman and Janz, 2004). Nigerian being a developing country still suffer good communication network. There are few Internet Service Provider and even those that provide internet services provide bad services to the extent that most internet users waste most of their time browsing through the internet without signals.
Authenticity: This is the ability of the quality of goods and services displayed to be meet the way it is displayed i.e. consumers should get the exact quality displayed on the internet. Many organization and business setup in Nigeria will just provide an attractive website, producing low quality product and given low quality service but displaying high quality goods and services so as to attract more consumers.
PROFFERED SOLUTIONS TO E-MARKETING AND ONLINE SHOPPING IN NIGERIA
The below recommendation are the proffered solutions:
Building online trust: Building online trust is one of the biggest challenges because Nigerians find it hard to trust things they cannot see and trust. Online marketing is the future of economic development as every day there are new avenues to do business. Trust says a lot about your online business’s reputation, you are not entitled to it, it must be earned. Building online trust goes beyond saying your business is legit, or having one or two people testify, trust is when customers no longer need recommendations from others before patronage. In a bid to build this online trust you must acknowledge that no two experiences will be the same, and there could be faults along the way. Customer trust can be gained by using authentic images. Don’t portray a product or service you’re not providing, enable reviews and testimonies, provide social proof and proper customer care, and content resources to help customers transact with your business
Incentivize the Customers on digital platform: To boost prepaid transactions, incentives should be offered to customers like the way Jumia Pay is currently doing. Jumia Pay offers customers who shop on Jumia 5% cash back if they prepay for their order.
Engage the service of a tech-driven Logistics firm: The solution for this is to choose the right partners and technologies for the services you can logically offer given a certain period and available resources. Many online services are engaging the services of Kobo360 (A well-known and organised technologically driven Logistics company). Again many eCommerce companies now employ the use of the motorcycle which easily navigates tough roads and delivers orders in good time. In fact, there are organisations that now use drones to deliver orders
Infrastructure Development: Infrastructure development is the key to providing Internet to more of the population. These solutions provide infrastructure and reduce the expenses involved in connecting to the Internet. Mobile Phone Company should as a matter of winning more subscribers reduce the cost of data and enhance their network. Most network operator in Nigeria came under serious infrastructural challenges on their network during the lockdown period that saw a lot of poor data and voice quality delivery orchestrated by unprecedented surge in consumption.
Privacy Protection Law: Shapiro (2000) argued that many successful online service providers have customized their services and redesigned the offered products to match individual customers’ needs identified through the customer’s personal information. Shapiro also found that privacy problems can be solved from the interaction of law, code of conduct and markets which can strengthen the existing regulations about compliance of online service providers to their own privacy policy as specified on their web sites, letting consumers have control over their personal information for their own benefits such as money, goods, or services.
Enhance Customer Loyalty: loyalty is “a deeply held commitment to repurchase or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing despite situational influences and marketing efforts having the potential to cause switching behaviour” (Oliver, 1999). Subsequently, Anderson and Srinivasan (2003) have defined e-loyalty, in brief, as the best preferable attitude of a customer headed for an ebusiness, leading to repetitive online purchasing. Due to widened diffusion and diversity of the services offered via the Internet; the level and amount of competition between online service providers have escalated increasingly granting the online consumer power (Barsh et al., 2000; Porter, 2001; Reichheld & Schefter, 2000). Continuous development in web technology, content, service and product value helps to acquire and keep online customers loyalty which is critical to the success of any online service provider in today’s online competitive environment.
Government Intervention: Nigeria being a developing country, where so many people still live in abject poverty and therefore for e-marketing & online shoppers to increase in Nigeria, the bad economic situation must be checked by the government and concerning the issues of security, organizations must invent sophisticated security measures so that credit card and social security numbers cannot be accessed by the hackers. Also organization must organize an open lecture on television and radio stations to assure people that they are free of privacy and security threat.
Website design & optimization: According to Forrester’s research 1999, the world most popular website must have the following 6 factors in common. i.e. High quality content, Ease of use, friendly design, customer centric, quick downloads and frequently updated. Every organisation must strive to ensure that their website obeys these 6 golden rules.
Again, organisations should be able to provide clear and effective privacy statement on their websites following the opt in and opt out regulation allowed in their business domain. Independent site certification can clearly be displayed on their sites to give customers comfort. Customers and consumers data must be clearly protected by providing firewalls to prevent the activities of hackers and cyber criminals.
Written by Emmanuel Agu, FNIMN, FIMC, FIPMA, MSC, MBA, Ashridge Alumnus – Group Marketing Director at Jotna Nigeria Limited (The LaCasera Company).
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