Dubai: Digital commerce and predictive customer analytics are converting economic pressures into opportunities for the regional retail sector, said an industry expert.
Danny Karam, vice-president at global consulting and technology firm Booz Allen Hamilton MENA, said that data analytics can be incorporated into a company’s business processes with the aim of transforming the organisation’s business model into comprehensive data-driven decision-making.
He said that by leveraging the value of data — both internal (customer profiles, footfall, transactions) and external (social media, traffic, weather, macroeconomic) — retailers can tailor their offering to drive sales, while at the same time optimising their return on investment.
According to Euromonitor, the Middle East and North Africa region is emerging as a global hub for retail and the sector is expected to grow from $996 billion (Dh3.6 trillion) in 2015 to $1.05 trillion in 2016.
Karam said that increased real estate and labour costs are also driving businesses to seek a profitable mix of traditional and digital sales channels. The onus is therefore increasingly on the retailers to embark on digital programmes to ensure that outlets remain both relevant and profitable.
“We have found that there is immense pressure on retailers brought on by changing shopper dynamics. Retailers must understand changing customer behaviour and shopping preferences, manage the cost of brick and mortar establishments, mine data and amplify their outreach through an omnichannel platform to provide a seamless shopping experience that will, in turn, create new revenue streams beyond the shop floor,” he said.
As the retail sector in the Middle East attains maturity, Jad Rahbani, Principal at Booz Allen Hamilton MENA, said that operators will have to ensure that they utilise industry best practices to deliver a seamless customer experience.
Furthermore, he said as customer loyalty increasingly becomes a cornerstone for businesses to remain successful, the firm believes that the retail sector has tremendous opportunities to harness and optimise data analytics to achieve this goal.
While the unstable global economy may have raised questions over the ability of MENA retailers to make a profit this year, Booz Allen Hamilton predicts that in the retail sphere, the rapid rise of customer analytics is creating an environment in which retailers cannot only survive, but thrive.
Already many leading regional retailers have modified their structures and strategies, incorporating customer analytics as a key enabler rather than a supporting capability. Majid Al Futtaim, the leading shopping mall, retail and leisure pioneer across the Middle East and North Africa, relies on continuously measuring customer needs and developing a single view of the customer or a “Golden Customer Record” across its 13 business units.
Booz Allen Hamilton anticipates that the journey will be challenging, but the scope to reach customers with a more focused offering has never been greater.