Online retail business overtakes traditional business

A study by Firmus Advisory, a market research, regulatory compliance and trade development consulting firm has observed that the proliferation of smartphones and increasing internet penetration amongst the populace has caused a steady shift towards online marketing by most entrepreneurs.

Findings in the report however, disclosed that a lot more purchases are still done through traditional means, especially for food and beverages.

However, young entrepreneurs have taken advantage of social media platforms such as Facebook, Intagram, Twitter among others to market their merchandise were found to be making good returns, and chipping away some of the revenue that would otherwise have gone to the more established retail outlets.

The report also revealed that Ghanaian households spend closely GH¢500.00 on food products resulting in an annual household consumption of 21 billion.

Nana Araba Koomson, Research Analyst at Firmus Advisory, briefing the press on the findings of the survey said the team focused on three products categories; food and beverages, fashion and health and personnel care.

She explained that 37% of respondents stated they purchased food and beverages on a weekly basis. 60% of respondents shopped for fashion monthly and 56% shopped for health and personal care products.

She also said ideally, consumers want to be able to mix and match online and offline shopping to suit their immediate needs.

“The result of our survey indicated that majority of consumers spend up to GH¢500.00 when shopping from both offline and online retail outlets among the three product categories. When asked why they shop offline instead of online, respondents said they get to feel, touch, or even smell a product before they buy it. This gives them the opportunity to be acquainted with the product before making any commitments,” she explained.

According to the Research Analyst, consumers were more likely to be influenced by convenience when shopping online.

This she said, more than 20% of consumers said convenience was the factor that drove their most recent purchase followed by ease of purchase; other factors included promotions 17%, price 14% and wide product range 13%.

Ms Koomson noted that digitization is gradually changing the retail landscape from pre to post sale with transactions, communication, distribution, customer service all taking a different form in the industry. She said “for instance social media and mobile phones have led to more interactive transactions, increased volume of networking and real-time engagement with customers.”

She explained the way forward would be to incorporate some form of digitization into retail business process and customer experience to enable them keep up else they would end up folding up.