The customer of today and tomorrow are omnichannel shoppers. It translates everywhere – in the US, the UK, China, India as well as the Middle East. In fact the Middle East, which has been considered a digital laggard, today sees customers starting their shopping journey on their mobile devices, coming in to experience the stores later. In the coming days, these customers may also start making transactions on their mobile devices more frequently.
“In the Middle East, 75% consumers browse online before shopping in physical retail spaces,” shares Robert Welanetz, CEO, Majid Al Futtaim Properties. “What’s heartening is that retailers, world-over and in our region, are now discussing an integrated model where online is not pinned against offline; but both channels coexist.”
Offering a different view, Daniel Parry, managing director – commercial and general counsel, Gulf Related, says, “People in this region are keen to visit shopping malls in their leisure time. That’s what we found from our 2,000 sample sized survey – 94% are interested in visiting a shopping mall. But that experience starts even before the person has left their home when they decide on the reasons to visit a mall. The number one reason, we found out, was retail. F&B plays a vital role too in the success of a shopping mall, which is why this category will occupy 20% space at our development, Al Maryah Central. We also increased our entertainment offerings for all age groups seeing that 46% of Abu Dhabi consumers shop at Dubai malls for the entertainment. It’s all about understanding the local market needs and adapting.”
“E-commerce doesn’t mean that customers are only shopping online. For a majority of our customers in the Middle East, while the journey may begin digitally, fulfilment still tends to happen in stores,” elaborates Anan Fakhreddin, CEO, Damas. “In the US, 30% of shopping malls might close down in the coming few years mostly because e-commerce is taking away traffic. The Gulf States aren’t immune to this pattern either, so we’ve to prepare our businesses to treat e-commerce as an opportunity, not a challenge.”
Terry J Lundgren, executive chairman and chairman of the board at Macy’s Inc., offers an American perspective, “In the US a customer who shops across multiple channels is five times more valuable and engaged than the one using a single channel.”
“The physical store is our advantage over the pure play online-only retailers. A customer shopping in a multi-dimensional way is by far the most engaged. The shopping centre developers have also woken up to this. We’re working together in a way we’ve never done before to make the physical shopping environment, aided by technology, far more exciting and interesting. At the same, we’ve to continue investing in our online growth. The shopping experience will have to be rendered seamless,” he asserts.
China is yet another interesting story. Internet sales leapfrogged due to internet and mobile penetration. In 2016 China surpassed the US as the world’s largest retail market, with spending exceeding $4.84 trillion, and by next year, China’s online spending will be higher than rest of the world combined.
“In 2016 online accounted for 15% of total retail sales in China. There are reasons for such stupendous growth,” explains Laura Xiong, senior vice president, JD.com. “Youth in China, a sizeable lot, prioritise quality over price pointing towards a consumption upgrade. There has been a marked increase in the Chinese middle class with rising disposable income. They value superior customer experience; high-quality, authentic products; and fast delivery timelines. Think about it; we delivered iPhone 7 to consumers within 12 minutes of its launch. That’s the kind of fulfilment consumers expect.”
“Today consumers aren’t shopping only via a single channel. They might search information online while purchasing offline. We’ve to reach them at their preferred touchpoints,” she continues. “Last year at JD.com we formed a strategic partnership with Walmart that allowed us to offer a holistic shopping experience. Further, we operate in rural areas by partnering with local stores for consumers to first check the products before placing an order online. Also, our partnership with Tencent helped us reach over 880,000 million Chinese consumers via WeChat. Integration of online-offline is, thus, crucial.”
“Online isn’t only about sales; it’s also about having adequate and meaningful communication with consumers through social media platforms. Offline, on the other hand, isn’t dying. In fact, at LUSH we will continue expanding our store network,” sums up Karl Bygrave, director, LUSH Cosmetics.
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