$47.53bn experiential marketing opp seen for growth seeking Nigerian businesses

ONOME AMUGE IN LAGOS, NIGERIA

In a period of soaring inflation and dwindling consumer spending, Nigerian businesses, who are desperate for innovative solutions, may find a recent study by Business Research Insights, which reveals a game-changing opportunity in the experiential marketing service market, valued at $47.527 billion in 2021 and projected to reach $63.162 billion in 2030, useful.

As this market expands at a compound annual growth rate (CAGR) of 3.16 percent, analysts have urged Nigerian enterprises to tap into its potential to spur business growth and strengthen customer loyalty. By embracing the immersive experiences of experiential marketing, it is believed that companies can not only survive but flourish amid an inflation-battered economy.

According to industry experts, experiential marketing serves as a bridge between brands and customers, fostering connections through immersive experiences such as pop-up stores and virtual events. These encounters, which often blend in-person and digital elements, present an innovative approach for brands to create unique, lasting memories that resonate with consumers.

In the face of Nigeria’s harsh economic climate and rising brand disloyalty, a new study from the Lagos Business School (LBS)  has highlighted the potential of experiential activation to enhance customer loyalty, offering a beacon of hope for businesses struggling to make significant revenues amid an economic turbulence.

Titled “The Pulse of Experiential Marketing in Nigeria: Insights & Strategies,” the study, led by  Uchenna Uzo, a marketing professor and academic director of the Africa Retail Academy at LBS, and Ephraim Nwokporo, teaching assistant at LBS, Pan-Atlantic University (PAU), emphasises the importance of leveraging innovative experiential marketing strategies to drive profitability and sustainability.

Addressing industry stakeholders, Uzo outlined the comprehensive research methodology behind the groundbreaking study, highlighting the multi-level sequential mixed method, which involved 12 key informant interviews with four selected experiential agencies, a focus group discussion with senior brand managers and representatives, 10 in-depth interviews with consumers who have interacted with brands through experiential marketing, and a survey of 308 consumers in Nigeria.

One of the study’s key findings showed that experiential activations significantly increase customers’ willingness to buy. Notably, a substantial number of consumers reported making purchases following experiential marketing campaigns, further underscoring the potential of this innovative approach to boost brand loyalty and drive sales.

Highlighting the potential of experiential marketing to elevate a brand’s position in a customer’s spending list, the professor of marketing underlined the importance of consistent, intentional activations that foster engagement. 

Notably, the LBS study found a direct correlation between the duration of a customer’s participation in experiential activations and their spending on the brand.

As attention spans continue to shrink in today’s fast-paced world, Uchenna encouraged experiential marketers to innovate, devising creative strategies that keep customers captivated and connected to a brand.

The LBS study however reveals a surprising paradox at the heart of experiential marketing, noting that despite the overall ability to drive brand loyalty, customers who make repeat purchases following activations often fail to remain loyal to those brands. 

It attributed factors contributing to this counterintuitive finding to include; flawed route-to-market strategies, insufficient product availability within activation areas, pricing, and an overemphasis on short-term gains. Additional issues, such as security concerns and negative past experiences, were also identified to further exacerbate this loyalty disconnect.

To address this issue, the study recommended a strategic shift towards long-term campaign planning for experiential marketing, highlighting the benefits of retaining agencies for extended periods. This approach, it stated, not only proves more effective but also generates higher return on experience (ROE) for brands in the long run.

Uzo also cautioned against viewing experiential marketing as a one-off event, urging brands and agencies to focus on reaching all purchase touchpoints and tailoring activations to the customer’s buying cycle. He expressed optimism that by embracing this forward-thinking perspective, businesses can optimise the impact of experiential marketing and secure lasting brand success.

Lagos-based licensed mobile value-added service company, Whispa Konnect Ltd., underscored the advantages of experiential marketing in an article entitled “The Future of Experiential Marketing in Nigeria.” According to Whispa Konnect, this innovative strategy transcends conventional advertising, forging immersive and interactive experiences that establish emotional connections with consumers.

According to the article, by enabling customers to engage with products or services on a personal level, experiential marketing cultivates brand loyalty and leaves a lasting impact. In a world saturated with advertising, Whispa Konnect asserts that experiential marketing stands out as the key to building strong, enduring relationships between brands and consumers in Nigeria.

“In today’s crowded marketing landscape, where consumers are bombarded with messages, experiential marketing stands out. It cuts through the noise and allows brands to connect with their audience in a meaningful way. While experiential marketing has been present in Nigeria for some time, often in the form of brand activations and product launches, it’s still evolving,” it stated. 

Whispa Konnect highlighted factors shaping the future of experiential marketing in Nigeria to include technological advancements, shifting Consumer Preferences, and an evolving media landscape.

As experiential marketing continues to evolve in Nigeria, the article pointed out that several key trends are emerging, such as hyperlocal experiences, data-driven personalisation, cause marketing, interactive storytelling, and omnichannel marketing. It noted that by embracing these cutting-edge approaches, businesses can capitalise on the immense potential of experiential marketing to connect with consumers in innovative and impactful ways.

While the future of experiential marketing in Nigeria holds great promise, Whispa Konnect acknowledged several hurdles that must be addressed. Key challenges include infrastructure and logistics constraints, the complexity of measuring return on investment (ROI), and intensifying competition.

Despite these obstacles, the article emphasised that they also represent opportunities for businesses to gain a competitive edge. It added that by proactively tackling these issues, companies can differentiate themselves in Nigeria’s experiential marketing arena and foster long-term success.

It also encouraged businesses to adopt a proactive, visionary approach. Key recommendations include embracing cutting-edge technologies such as virtual reality (VR), augmented reality (AR), and the metaverse to deliver captivating experiences.

To excel in this dynamic field, companies were encouraged to prioritise customer experience and engagement, align their strategies with local culture and values, and leverage data to measure campaign effectiveness. 

According to the value-added service provider, by continuously refining their approaches based on insights gained, businesses can adapt to the ever-changing experiential marketing landscape in Nigeria and secure a competitive advantage.