In 2016, Jack Ma, co-founder and former executive chairman of Alibaba, coined the term ‘New Retail’ to describe how offline, online, and logistics businesses were merging to create a seamless retail sector blending both spaces. Describing it as one of five areas that will be fundamentally transformed by innovation, the others being finance, manufacturing, technology, and energy, Jack Ma asserted that New Retail should be the priority for e-commerce businesses. New Retail takes the power of digitization and big data beyond current applications in e-commerce and creates new dynamics between consumers, producers, wholesalers, and retailers in the physical commerce space. This plays out across several dimensions: Know your customer, Payments solutions, Data strategies and Faster shopping experiences for consumers.
The topic was discussed in a panel discussion at the 10th Middle East Retail Forum 2021. The CIOs and CDOs of major retail conglomerates like Piyush Kumar Chowhan, Group CIO of Lulu Group International, Daniel Gomez, Chief Digital Officer of Al Malki Group , Phillip Smith, Head Of Digital at KOJ, Sander Maertens, Head of Middle East for Adyen and Mark Thomson, Retail Industry Director at Zebra Technologies gave their opinions on the subject.
Know your customer:
Customer data and insights are essential when shaping retail strategies, but sometimes decisions can also be based on speculation through latest trends, simulating the competition or implementing a new solution aligned with customer behaviour. Daniel Gomez, Chief Digital Officer of Al Malki Group says, “Whatever we build has to start with the customer in mind, especially with the particular market we are working on. We mostly operate in Saudi Arabia so we have a very digitally native young population. They easily interact with any digital platform but then we also have populations from distant locations who are very new to this and are really concerned about the experience. These people need support from the customer service team”. The retailers should have the right technology to understand who is calling and have all this information about the customer. “For that we use our CRM salesforce, our courier-integration partners, develop training materials that are interactive and field train people to deliver the best experience”, adds Daniel.
Which brings us to the other question; Is technology really helping retail? Piyush Kumar Chowhan, Group CIO of Lulu Group International elaborates “I believe that only technology is not going to solve that problem. If I had to paint a picture of how I see things, experience which is valued more than the product. But the big challenge is, retailers don’t know how to price experience. Whereas the consumer is screaming out loud saying that I like experience more than the product. That is one problem. The second shift which has happened is, the consumer is now in control of what he/she wants rather than the retailer being in control of what they are going to offer. This is a big shift of power and I think digital is enabling that power in the hands of the consumer who is calling the shots.
He further adds, though Covid brought a big transformation but it is actually the consumer’s behavior which exalted it. The consumer had moved on faster than the retailer during the pandemic, be it physical or digital. The three keywords for technology is ‘Digital-native, experiential and omnichannel retail’. Firstly, digital native means you need to start behaving the way the consumer thinks with digital in their minds. Secondly, remember customers don’t care about transactions but about experiences. Transactions might be the ultimate goal but it is the experience which will lead you to that transaction. Finally, one should consider about what omnichannel as a concept means from a customer’s point of view”
Consumers today are demanding a more personalized experience across all stages and interactions. They expect to be able to pay with their preferred payment method anywhere in the world and online. In response, retailers are implementing innovative payment methods to increase their engagement with customers. In addition to its traditional Visa, AMEX, and Mastercard solutions, there is PayPal, Union Pay, Google pay, Apple Pay options too. To make things simpler and more secure, payment options need to align with consumers needs . Sander Maertens, Head of Middle East for Adyen said “ There is a lot going on and we need different technologies to accommodate that. Payment is overlooked as a pivotal element to blend it all together. It is likely that both the retailer and consumer will have issues with the current payment solution, such as settlement window issues, lack of payment methods, and / or too much friction at checkout for the customer. Customer interviews and experience days can help you model the present day experience and map out your future vision of payments”.
Data is the new soil:
On a broad scale, payment provides data which in turn helps retailers to gather new information. But data does not have value until they are turned into insights and actions Piyush Kumar Chowhan, Group CIO of Lulu Group International agrees “Data is the new soil. You have to nurture each and every experience, activity and process in your business with data. But unfortunately, as per a survey organizations still use less than 10% of data available. There are multiple reasons for it. Firstly, data is not available in the form they want. Secondly, the skills required to analyze data is not there. Thirdly, data is siloed wherein only one group in an organization can access a set or source of data. There is a long way and that is where the problem lies”. So how do we make data work for as opposed to someone relying to interpret it. According to Sander Maertens, Head of Middle East for Adyen, “ Traditionally, we rely on a combination of quantitative data from surveys and qualitative insights from focus groups and interviews. Unfortunately, their results are slow. I believe that real-time experience tracking rises to this challenge. When a customer walks in and buys something in real-time our systems should be able to give you immediate insights. This is extremely valuable to keep the customer . The newer generation expects seamless service, so as a retailer you need to cater to customers demand with a higher standard of service and that’s how data helps”.
Is data the key to experience? If so, hw do we share that data to empower the staff in the store? Daniel adds, “The e-commerce data given from the visitors in the website should not get stuck in a silo and that’s what happens in many organisations. Nowadays, the battle for consumer attention has moved online. The question is, what can businesses do to be more competitive? The short answer is ecommerce customer service. Ecommerce customer service is how online businesses provide seamless assistance to customers with everything from making online purchase decisions to resolving issues across all channels. In this digital-first world, its important to build the communication and ecommerce customer service is not simply nice to have, but rather a prerequisite for success”.
Even if data offers insights to increase customer engagement, it’s tough to accurately analyze large data volumes on your own. That’s where machine learning can come to your rescue. Phillip Smith, Head Of Digital at Kamal Osman Jamjoom Group elaborates, “In order to analyse stored data we need to deploy machine learning. A machine learning model can analyze and break large volumes of complex data into actionable insights, so you can better understand customer behaviour and market trends. By using these insights, you can estimate future demand, set competitive prices, personalize offerings for customers, and much more”.
Faster shopping experiences for consumers
With the dot.com boom, retailers are testing or expanding same-day delivery. Pleasing customers by delivering them online orders as quickly as possible has become the ultimate goal. Many retail businesses including the two largest marketplaces in the UAE Amazon & Noon have notched up to same-day delivery services. In addition, we are now reliant on third parties like Zomato, Deliveroo, Talabat, Uber and Instacart.
With same-day delivery begin the new norm, there remains one burning question, Why? Piyush reiterates, “Shoppers want anything and anytime at the click of a button. Even at Lulu, we have launched a 1 hour express delivery service. But you have to understand there are two extremes . One, 70% consumers still like planned purchase as per a survey, so that transition to a 15-minute delivery is just an instant gratification. Since there is a new surge of money that is coming into it, we are trying to experiment it. But we have to lie somewhere between instant delivery and next day delivery. Daniel adds, It’s not about one or the other but having a combination. Also for certain categories like luxury brands people are willing to wait. I don’t see someone ordering a $5000 ring and wanting it to be delivered in 15 minutes. Usually luxury purchases are well-analysed , people think over it and then decide”
Keeping up with current sentiments — the consumer-centric, Data-driven new retail powered by technology and online-offline integration is certainly a work in progress. It is the starting point of something much bigger and requires retailers to reinvent themselves to progress towards the future.
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