We live in a fluid economy where change is the only constant.
It is an undeniable fact that the entry of e-commerce has rewritten the rules of the game, and the change has only just begun. Today, ‘omnicommerce’ is not merely a play on words, but an important reality.
The breakneck speed at which digital technologies are reshaping retail dynamics has created a whole new ecosystem that is being driven not only by the e-commerce giants – both home-grown and imported – but also by innovative, disruptive start-ups.
However, the current thrust of e-commerce comes with a catch: It continues to be channel-centric. Merely replacing the physical cash register with an online payment gateway or having a namesake portal to drive online sales is hardly enough to future-proof your business for the next era of retail.
In 2018, e-commerce accounted for almost 12 per cent of total global sales, according to Statista. Although the worldwide retail market did not slow down, markets such as the US saw the closing of numerous malls in its suburban cities. In fact, the US – the bellwether market for malls – continued to witness retailers filing for bankruptcy. The latest victim of this trend is the iconic Barneys of New York.
The result? Ghosts of abandoned malls looming in America’s suburban cities. As Time magazine noted, ‘The death of shopping malls is about more than shopping’.
The challenges faced by malls are not because e-commerce continues to gain momentum, but more because customers tend to miss the personal touch. According to the Deloitte Survey for Global Powers of Luxury Goods, while millennials and generation X increased their share of shopping online, the baby boomers continued to prefer the physical store.
In stark contrast, here in the region (according to a new report by Dubai Chamber), where online sales of apparel – one of the most popular e-commerce purchases – has increased: physical retail stores continue to dominate the market.
This dominance is pervasive across the MENA region – despite its high levels of smartphone and internet penetration, as well as its young, tech-savvy population of nearly 200 million people – almost 60 per cent of whom are below the age of 30. This gives the MENA region’s retail sector a unique context, as well as the distinctive opportunity to capitalise on this highly digitised population.
In recent years, this has fuelled an inevitable change in the region. Retailers have realised both the need and opportunity for a new strategy that would merge the best of both worlds – brick and mortar and online.
With e-commerce giants investing in brick and mortar, and malls acquiring online platforms as well as focusing on enhancing lifestyle experiences, omnichannel retailing is rapidly gaining strength. Alibaba’s ‘More Mall’ physical store concept and Westfield’s ‘Destination 2028’ vision to assure the ‘Extra-perience’, are only two such examples of this shift. While omnichannel strategy was the response to the initial burst of change fuelled by the arrival of e-commerce, it is not enough to future proof retail for the long-term.
Omnicommerce – full stack digitisation – is the name of the game and the future of the retail experience. Omnicommerce is not only about having multiple channels, it is also about holistically understanding the customers’ needs and deploying innovative technology to create a unified experience for maximum impact.
Omnicommerce is the ‘new retail’, where everything becomes customer-centric and shopper-oriented. It is a compelling business and creative concept that is defined by a new generation of digital-savvy customers, and which serves as a perfect fit for the fluid retail economy of today, bringing exceptional new elements to retail.
It is this form of retail that is taking China, one of the largest consumer hubs in the world, by storm. The rapid emergence of influencer-led purchase trends, products that are designed and developed specifically for the customer, and transactions that are driven through absolute customer-centricity are paving the way for this new era.
For one, omnicommerce is predictive as it foresees customer aspirations and market trends by leveraging data analytics. Additionally, it is also extremely personalised, with every touch-point in the customer journey designed to meet and satiate expectations.
Omnicommerce is also flexible, giving retailers the ability to adapt and grow in tune with market trends. And most importantly, it is about being relevant: Omnicommerce brings the wonderful dictum of ‘customer is king’ back in circulation because it ensures that the customer gets the best.
Working with 25 leading retailers across the region, including the e-commerce and brick and mortar giants, we are witnessing omni commerce being embraced at a faster rate across the GCC than the rest of the world.
With online retail in MENA growing at a phenomenal pace – and set to be valued at $69bn by 2020 – there is an equally strong shift from ‘traditional online’ to mobile, social media platforms and omnichannel shopping habits, all leading to higher customer-spend, estimated at $332 per person in Dubai compared to the global individual online user spend of $190.
In fact, with reports stating that customers are influenced by social media when it comes to their online purchases, and their online shopping basket widening to include even day-to-day necessities and groceries, surely, understanding what they need and how their retail needs must be delivered is a strategic imperative – that only omnicommerce can deliver.
With a clear commitment and focus on wowing the customer, and armed with the power of digitisation and creative shopper marketing, e-retail in the region is poised to take the next leap of growth via omnicommerce – one that blurs the lines of geographies that are limiting e-retail and bringing a wider geographic catchment area to serve.
Certainly, that is the kind of success retailers would not want to lose out on.