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Saturday, November 28, 2009

How to start a retail store in Lagos Nigeria

In Lagos Nigeria, retail stores are so numerous one could say they number like the stars, but only a few of them stand out and are worth the patronage they receive. My observation of most retail stores in Lagos indicate that majority of them were set up for strictly subsistence purposes and not for profit making. Here is what I mean a civil servant in the Lagos state civil service who earns barely enough to survive might consider setting up a retail store to meet her living expenses as a result of this she is less likely to deploy methods that would ensure growth of the retail store since she is satisfied with earning just enough to meet her living expenses.
For the few retail stores that stand out from the pack, they are very business like in their mode of operation. The need to keep the customer happy and satisfied supersedes every other consideration and naturally they tend to enjoy massive patronage from both loyal customers and new customers who get to patronize them for the first or second time.

In Lagos Nigeria, retail stores deal in all sorts of items but majority of them specialize in selling consumer items. Hence major retail stores like Shoprite, The Game stores, Pack ‘n’ shop sell a broad range of consumer products. However some specialize in single line products like Talk 2 me, Luomo, The ballers and a host of others which sells clothing particularly designer wears. Some like rough n tumble sell clothing for younger age groups (toddlers and pre teens). Some retail outlets sell one line consumer products such as consumer electronics (laptops, ipods, flat screen televisions, digital satellite dishes and decoders among others).
Retail stores can be set up anywhere in Lagos Nigeria, but certain factors must not be overlooked when choosing where and when to set up a retail store. Here are some of the factors to consider when setting up a retail business in Lagos Nigeria;

1. Location

The place, neighbourhood or community you choose to set up a retail store can easily be termed the most important factor to consider when setting up one. If you intend to sell products that appeal to middle class families, naturally you have to locate your business in middle class neighbourhoods such as Illupeju, GRA Ikeja and Ogudu, parts of Surulere and so on. The same premise applies to upper class and lower class folks.

2. Demographics and population of market segment

The market segment you select for your retail business is a very important factor to consider. Most retail businesses serve a broad range of market segments often times because the owners never considered the possibility of specializing in a small segment not only to beat competition but to also secure slightly higher profit margins. Businesses like rough n tumble and wranglers which serve a very tiny market segment (children’s clothing and jeans respectively) are more likely to be profitable than others that fall within the same broad range of products that majority of retail stores in Lagos Nigeria are already doing.

3. Cost of living and level of disposable income

People in certain neighbourhoods and places within the Lagos metropolis enjoy cheaper cost of living when compared to most parts these places are usually home to low income earners as a result things are generally cheaper. Setting up a retail store in such a place would require large turnovers based on small profit margins. The reverse is the case in neighbourhoods with high income earners.

4. Supplies and suppliers

Where you receive your supplies from and how close your retail store is to your suppliers is a very important factor to also note. However not all

5. Branding

Using effective branding makes a lot of sense in this business, imagine where a lack of effective brand awareness is prevalent and you happen to situate your business in a very busy commercial area with several other competing stores, the result will certainly be catastrophic over time. Some clothing retail stores use slogans like ‘we make your clothes speak your language’ or ‘the best products at the best prices’ among others.

6. service delivery

This business is service based as a result the better you are at offering customers what they want over your competitors the more loyal customers you tend to build over time.

Conclusion

Retail businesses are not in short supply in Lagos Nigeria, however they are very few that command market attention and those few are by no means ordinary owing to their use of efficient methods at getting their customers satisfied and beating the competition to the game of reducing costs to the barest minimum.

3 comments:

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  2. true, i agree with all these points listed above. I've just been searching the web for ideas on how to have the best entrepreneurial experience. looking to start up something soon

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  3. Great idea to start retail store.

    ReplyDelete