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The 2% Mistake

The Nigerian Naira's Virus Attack – Tekedia

"According to research done by The Fletcher School and Mastercard, of the $301 billion of funds flow from consumers to businesses in Nigeria, 98 percent is still based on cash".

Yet, most firms are focusing too much on “clicks” neglecting “bricks”. If 98% of your revenue is coming from bricks today, you cannot neglect the physical. Do not listen to them when they say that today is mobile and online. Sure, the future promises mobile and online, but we have to survive today.

Do not be intimidated with the alarms on online disruption: the glory on the clicks is a promise. But “bricks” is on our hands. You are investing too much for clicks and your management is focusing largely exclusively on clicks. No one cares about the bricks. Unfortunately, the “bricks” customers are noticing. They are not happy in your stores.

Get out of that trap and have a strategy: plan for both the short and long terms. No matter what anyone tells you, software will not eat Nigeria for a long-time.

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anthonychilaka has reacted to this post.

I think there are two ways to address this issue, in order to create some sort of balance. First should come as a policy framework from the government, encouraging more people not to carry out cash based transactions, but there must be an incentive. We have to devise a way to ensure that payment not based on cash is a lot cheaper, that would naturally entice a lot of people to adopt other channels but cash. Nigerians embraced ATM, we can replicate such by essentially making currencies less available, except for small items purchases.

Second part is for business owners to see ways to retool and re-strategise their CSR and Promotions, re-channelling most of the investments into making online and other forms of payment more attractive to the customers. It's not too difficult, but people most time prefer to waste money on things that don't really deepen commerce and customer experience.