Bricks and ‘clicks’ can co-exist

According to a recent PayPal study, mobile e-commerce is beginning to take off in the Middle East region. The report claims that, while mobile transactions are already at a comparable level to the rest of the world (10 per cent of e-commerce), current growth means that they will reach around 20 per cent of transactions within two years, as the m-commerce market grows from $1.3 billion (Dh4.77 billion) in 2013 to $3 billion by 2015.

The reality of m-commerce is that online and in-store strategies are no longer mutually exclusive, but if structured right, completely complementary.

The shopping journey can be divided into three parts — discovery, selection and transaction. Savvy retailers are aware of the discovery and selection components being increasingly initiated online or on mobile, and are using this ‘omni-channel’ engagement hook to ensure that the final and most critical component — transaction — is executed in-store, where they invest their rental, salary and advertising dollars, day in and day out.

In the past, technology enabled and streamlined the back-end infrastructure of a retailer, but today, it has emerged as the key front-end enabler of connectivity with customers. The scale is transformative and is compelling retailers to either evolve or perish.

The relationship that a retailer had with the customer has come full circle. What started as a personal relationship between a local merchant and customers, founded on trust and the expectation that the merchant would over a period of time know their likes and dislikes and help them with what they needed and alert and inform them about new items on the shelf, underwent depersonalisation and grew into organised retailing.

Organised retailing is all about scale of operation and the use of technology extensively to make shopping a lot more ‘self-service.’ While retailing was getting organised, a whole new revolution of wireless connectivity through mobile phones was underway and transforming the way customers connect and make informed choices.

The depth of product features, prices and alternatives discovery that drove online visits is now expected on the go with a consistency between ‘clicks’ and ‘bricks.’

The single most critical consistency in being able to deliver is that a smartphone with an individually branded retailer application can deliver this dual functionality.

Omni-channel — The new retail paradigm

The proliferation of smartphones and tablets, coupled with the ubiquity of wi-fi networks, is urgently demanding a change in retailers’ traditional go-to-market model. The traditional attributes of retail being location, product, price, quality and service are simply a prerequisite now, rather than a differentiator.

This trend towards omni-channel retailing is borne out by Motorola Solution’s seventh annual Holiday Shopping Study conducted late last year in the US which showed that retailers’ technology investments were leading to a better in-store experience with shopper satisfaction up by 23 per cent since 2008. By enabling more associates with technology and offering self-service shopping options, retailers are not only increasing sales but also driving greater customer satisfaction.

A traditional retailer’s move towards omni-channel is an organic shift and a ‘must’, but what is striking is that some of the pure-play internet vendors are shedding their online purity and moving into setting up of a physical outlet.

Even Amazon has installed lockers in shopping malls from where customers can pick up deliveries. Could this be its baby step towards brick-and-mortar?

Embrace the converse

The future is not about the number of stores added, but about connecting with the customer, understanding what they want, when they want and where they want. Today’s global retail leaders are embracing technology to do away with these perceived occupational hazards, thereby garnering massive competitive advantage.

With digital space and smartphones, no longer does one size fit all. There is a compelling need for mass personalisation. Failure to change and to deliver an integrated shopping experience across all channels puts a retailer at risk of becoming irrelevant.

Customer experience revolution

There is a radical shift in the consumers’ purchasing behaviour due to the fusion of virtual and physical worlds. This was a sentiment clearly echoed by the retail community at the World Retail Congress in Singapore last year.

The collective voice at this key global industry event agreed that digitisation, personalisation and localisation are mandatory for success in retailing globally — more so in the Middle East due to the diversity of cultures.

Meanwhile, even as e-commerce and m-commerce open up a world of borderless shopping, there is a pressing need for local retailers to step up their efforts to capture a slice of the e-commerce and m-commerce pie, as evidenced by the following numbers:

• 30 million people are now shopping online in the Middle East, up 65 per cent from 2011.

• Of the GCC’s $15 billion in online sales, Saudi Arabia will account for $2.7 billion, Qatar will account for $1.25 billion, and the UAE will account for the lion’s share at $5.1 billion.

• A significant amount of that spending will be due to m-commerce ($700 million in Saudi Arabia, $100 million in Qatar, and $1.5 billion in the UAE, the latter mostly driven by tablet adoption).

The way forward

Constantly analysing customer behaviour is the way to get ahead of the customer and lead the experience game with the connected shopper.

— The writer is regional sales director — Middle East Region, Enterprise Mobility Solutions Business at Motorola Solutions.