Technology’s role in enabling businesses during the pandemic is undisputed, and the same holds true for retailers across the Middle East and Africa (MEA). Digital transformation was a necessity, as stores adjusted to a world more reliant on tech solutions. Retail business leaders had to respond quickly to lockdowns, closed stores, and unpredictable consumer demand.
Cloud-based solutions grew as businesses looked to solve urgent challenges and build resilience. The cloud enabled many retailers to continue serving their customers, and empower their employees in a secure digital environment. Those who had started their digital transformation journeys before the pandemic were in a better position to adapt to this unexpected change.
Rapid digital transformation
In the case of South African-based beauty brand Signature Cosmetics, e-commerce was always on the cards but the company’s five-year strategy had pencilled this in for 2021. When lockdown restrictions forced the retailer to shutter its 170 stores in southern Africa, the team realised this project needed to be fast tracked.
Fortunately, the groundwork was already underway, with the modernisation of its enterprise resource planning (ERP) systems using Microsoft’s Dynamics 365. Signature Cosmetics pressed pause on this and changed course to focus on establishing its e-commerce division. Within two months, the team had launched a virtual store.
The move online was welcomed by the beauty brand’s customers, and the company saw more than a 20 percent growth in revenues in months.
Before the pandemic, online shopping in MEA was in its infancy when compared to other global markets. The reasons were low internet penetration and the high cost in parts of Africa, few e-commerce options, immovable consumer habits and distrust for online payment systems.
This has changed. A McKinsey consumer sentiment survey of MEA found that the United Arab Emirates (UAE) and Saudi Arabia saw the highest increase in online grocery shopping. In South Africa e-commerce sales grew by 66 percent from 2019 to 2020 to more than $1.8 billion.
Are consumers in MEA finally comfortable with online shopping? Mastercard expects that 20 to 30 percent of the e-commerce surge from 2020 will be a permanent feature after the pandemic. This sharp change in shopping habits means a new era for retail in MEA. It will be up to retailers to adopt the right tech solutions to ensure sustainable growth post-pandemic.
Finding a competitive edge
Consumers in MEA are now spoilt for choice when it comes to online shopping. So as a retailer, how does one differentiate itself from the options available and sustain the interest of these new digital users?
Knowing the customer and personalising their shopping experience will set retailers apart and keep them ahead. Data holds the key, with consumers more comfortable sharing data in exchange for better experiences. Companies are investing in intelligent solutions such as Microsoft’s Cloud for Retail to give them a 360-degree view of their shoppers, while also protecting and securing their data. As a result, retailers are now applying predictive analytics and machine learning to their digital offering to anticipate consumer needs and make recommendations.
“You cannot personalise anything without a fine-grained view of your customer,” says Richard Wingfield, Director of Data and Analytics at Al-Futtaim Group.
Data capturing was already part of Al-Futtaim Group’s operations, but much of it was fragmented across different divisions making it difficult to interpret this intelligence. By developing a customer data platform (CDP) on Microsoft Azure, the Dubai-based conglomerate was able to consolidate its customer data and build comprehensive profiles. These personalised data insights gave the company a better understanding of customer behaviour and created new opportunities for Al-Futtaim employees to upsell and cross-sell.
In addition to personalised insights, retailers will need to bridge the divide between online and brick-and-mortar for a seamless omnichannel experience. This happens to be a primary focus area for Microsoft customer Ombori, who are reimagining retail in a highly digitised world. Furniture conglomerate IKEA was looking to streamline its customer service systems in Bahrain and Saudi Arabia and turned to Ombori’s queue management system. Rather than waiting in line at the customer service desk, shoppers can book an appointment via the IKEA website or in-store interactive display. This gives customers the freedom to browse until they receive a mobile notification that they are next in line.
Data is power
Customer experiences and data are not the only information retailers are looking to harness. For Servis Industries Limited in Pakistan, having complete visibility of its inventory in the supply chain was a business imperative for its footwear brand Shoebox.
According to Faisal Rizvi, Head of Finance at Shoebox, the company lacked supply chain visibility. This forced teams to manually track inventory from the warehouse to the store, which took up time and created inefficiencies.
Dynamics 365 Supply Chain Management gave Rizvi and his team complete transparency on orders every step of the way. In addition, Dynamics has helped to automate orders, improving the retailer’s overall efficiency, and has increased the accuracy of its records.
Migros in Turkey has taken this idea of complete visibility a step further with its AI-powered system that uses image processing to monitor the quantity and quality of stock via cameras in its stores. Using Microsoft Azure Cognitive Services, the retailer can check stock and report on its condition and availability remotely.
Whether it’s e-commerce, customer insights or supply chain management, the cloud is helping companies reimagine retail, better serve their customers and empower their employees.
Tech solutions such as Microsoft Cloud for Retail will help business leaders use the right tools, insights, and capabilities to meet changing consumer demand. With trends such as contactless shopping and curb side pickup, data-led intelligence and digital technology will prove essential in navigating this new era of shopping in MEA.
To learn more about cloud solutions for retail, visit the Microsoft Cloud for Retail website.