Middle East Retail Forum: Engagement key to retail growth

Dubai: Customer experience is a key value that retail should achieve to enhance performance, according to speakers at Middle East Retail Forum 2015, which began on Tuesday.

“Companies who are using digital technologies in engaging digitally [with customers] are outperforming the traditional companies,” said Hannes Liebe, Co-Managing Director and COO at SAP Middle East and North Africa.

Liebe explained that industries in general and retail in specific are reaching an infliction point where businesses must face the ongoing digital revolution.

“It is about customer engagement and not customer relationship,” Liebe said.

Nisreen Shocair, president of Virgin Megastore Middle East and North Africa, said some customers visit its stores three times a week.

“When we set out to change our business model we wanted it to become a third place so if you are young, you at home, you go to school or work and then third you come to Virgin,” she said. To engage customers, they provide new products all the time. “You have to make it in environment which makes it very much about exploring,” she said.

As a result, Virgin’s Middle East Compound Annual Growth Rate (CGAR) rose 30 per cent over the last six years, she said.

Michael Leander, founder of direct marketing consultancy Michael Leander, said that by enhancing the customers experience, retail will be able to increase the sales but also collect the useful data.

“Big data can only be useful to firms if they have detailed small data,” Leader said.

He said retailers must show they understand customers as big data is only useful if customers return.

Liebe explained that SAP’s software is intended to help partners engage with customers through multiple channels, giving customers the feeling the firm knows them.

“Everyone wants to be treated differently, get a different price, etc. The more we understand [customers] the better,” Liebe said. He added that customers who shop online want brick and mortar stores to know their preferences as well, so profiles should be connected.

Alpen Capital estimated 58 per cent of the Gulf population is between 15 and 44 years old, with more than 200 nationalities with diverse taste and preferences.

Qatar has the most promising market, with a compound annual growth rate (CAGR) of 10 per cent over the next years. Meanwhile the UAE is expected to contribute to the retail sales by 25 per cent in 2018.

Due to the high disposable income, increasing and young people and influx of tourism in the region. Alpen Capital forecasts that retail in the region is expected to grow at 7 per cent CAGR between 2014 and 2018.

Growth, however, is also dependent on customers experience. In the Middle East, e-commerce is still limited, however growing as more companies are joining the online bandwagon. The Middle East forum aims to bring these businesses to talk about customer engagement, logistics and technology improvement.

The conference focuses this year on knowledge collaboration among retail businesses. The theme ‘Connect, Share, Evolve’.

Omnia Ibrahim is a trainee with Gulf News