Connected intelligence, omnichannel strategies reshape GCC retail

The GCC retail sector, estimated to be valued at $308 billion in 2023, is expected to continue its robust growth in the foreseeable future, according to experts.

While the positive impact of post-pandemic reopening on the sector is indisputable, the role of timely governmental reforms in women’s workforce participation, ease of doing business, and inducing macroeconomic stability is equally noteworthy. Such factors have had a knock-on effect on retail spending and consumer confidence. And as such, retailers have made conscious efforts to keep pace with those changes.

Retail strategies are being reshaped with customer-centricity at the core. In the context of widespread digitalisation, that shift involves harnessing customer data and personalizing brand communications and services. Leading brick-and-mortar retailers have systematically embraced e-commerce and integrated different channels for consistent customer experiences.

The implications of such developments for the sector’s future are profound, Shehbaz Shaikh, chief retail officer of Redtag, a leading value fashion and homeware brand in GCC, told Khaleej Times in an interview. Regional retail, Shaikh says, is undergoing a “great reshape”.

Excerts from the interview:

What is customer-centricity in the context of the GCC retail sector?

Customer-centricity fundamentally boils down to staying in sync with customer movements, be it with their shopping behaviours or preferences. In GCC, internet penetration at 98 per cent has led to an uptick in e-commerce. At the same time, this is not the expense of brick-and-mortar retail. There is structural demand for both, with the same consumer preferring online and offline shopping under different circumstances. Under that scenario, customer-centricity is about catering to a shopper’s unique preferences.

For retailers, the crux here is understanding the distinctive preferences of a multitude of customers. That is perhaps where Big Data and AI analytics come in. By integrating data from functions across the retail value chain, we can understand what a customer wants, when they want it, and how they like it delivered. In other words, customer-centricity is a paradigm shift from traditional vendor-driven retailing — we now offer what customers want; not what we/vendors can.

Why is the integration of online and offline retail paramount today in GCC?

Multiple studies have suggested that about 55 per cent of the Middle East’s population is well-acquainted with the workings of omnichannel retail — which translates to roughly 265 million people. So, there is a strong business case for retailers to deliver “phygital” experiences to customers. Redtag’s e-commerce launches in the last couple of years were rooted in the same rationale. Those who are averse to omnichannel retail run the risk of an increased customer churn — unviable in a sector already susceptible to a high churn rate of up to 7 per cent. That said, a mere e-commerce channel will not help traditional brick-and-mortar retailers to differentiate themselves from the competition. The omnichannel strategy must strive for consistent experiences and service efficiency across customer touchpoints.

What are retailers doing to achieve a successful omnichannel strategy?

As FinTech, by design, seeks to improve and automate the delivery of financial services based on end-user requirements, it lends itself perfectly to present-day retail. Retailers have wholeheartedly embraced full-stack financial solutions, hoping to simplify and streamline critical functions such as e-billing and refunds. Most importantly, FinTech platforms have enhanced transparency and accountability in retail operations, thus reinforcing consumer confidence and incentivising spending. The growing FinTech-retail synergy in GCC will pave the way for more customer-centric loyalty programmes in the future. With digitalisation in retail showing no signs of stopping anytime soon, more use cases will continue to emerge.