• Digital commerce and predictive customer analytics are converting economic pressures into opportunities for the retail sector
• Booz Allen Hamilton outlines an actionable strategy for retailers to enhance customer experience in an evolving market
Booz Allen Hamilton, the global consulting and technology firm, has found that investing in customer analytics offers exciting opportunities for the growth and development of the regional retail sector.
The comprehensive report – titled ‘Next Generation Retailers: Power Up Your Analytics’ discusses how the global retail sector is changing in the face of an unprecedented shift in customer behavior, fueled by advanced technology and wider acceptance of online shopping and ecommerce.
According to Euromonitor, the MENA region is emerging as a global hub for retail and the sector is expected to grow from US $996 billion in 2015, to US$1.05 trillion in 2016.
Increased real estate and labor costs are also driving businesses to seek a profitable mix of traditional and digital sales channels. The onus is therefore increasingly on the retailers to embark on digital programs to ensure that outlets remain both relevant and profitable. Against this backdrop of economic growth and infrastructure development, the report tracks the changes sweeping the MENA retail industry and the factors that will fuel growth in the sector.
Danny Karam, Vice President at Booz Allen Hamilton MENA, says: “We have found that there is immense pressure on retailers brought on by changing shopper dynamics. Retailers must understand changing customer behavior and shopping preferences, manage the cost of brick and mortar establishments, mine data and amplify their outreach through an omnichannel platform to provide a seamless shopping experience that will, in turn, create new revenue streams beyond the shop floor.”
The report highlights how data analytics can be incorporated into a company’s business processes with the aim of transforming the organization’s business model into comprehensive data-driven decision making. By leveraging the value of data – both internal (customer profiles, footfall, transactions) and external (social media, traffic, weather, macroeconomic) – retailers can tailor their offering to drive sales, while at the same time optimizing their return on investment.
The report also highlights that data analytics can be used to create value for customers themselves; improving their journey and helping retailers exceed expectations besides influencing strategy about customer stickiness, loyalty and relationship.
It has identified six imperatives that are central to building a sustainable customer analytics capability –these include building a case for customer analytics, defining customer analytics service offering, building the right customer analytics capabilities, investing in agile and scalable systems, establishing an optimal operating model, and changing corporate culture. When incorporated correctly, these imperatives can help retailers stay competitive in the long run.
“As the retail sector in the Middle East attains maturity, operators will have to ensure that they utilize industry best practices to deliver a seamless customer experience. Furthermore, as customer loyalty increasingly becomes a cornerstone for businesses to remain successful, we believe that the retail sector has tremendous opportunities to harness and optimize data analytics to achieve this goal,” Jad Rahbani, Principal at Booz Allen Hamilton MENA said.
While the unstable global economy may have raised questions over the ability of MENA retailers to make a profit this year, Booz Allen Hamilton predicts that in the retail sphere, the rapid rise of customer analytics is creating an environment in which retailers can not only survive, but thrive.
Already, many leading regional retailers have modified their structures and strategies, incorporating customer analytics as a key enabler rather than a supporting capability. Majid Al Futtaim, the leading shopping mall, retail and leisure pioneer across the Middle East and North Africa, relies on continuously measuring customer needs and developing a single view of the customer or a “Golden Customer Record” across its 13 business units. This allows the company to both understand and predict customer behavior and laser focus its marketing campaigns and, by proxy, positively impact customer experience and satisfaction.
With the right capabilities, and a carefully implemented digital strategy with customer analytics at its core, both retailers and consumers can expect to reap the benefits.
Booz Allen Hamilton anticipates that the journey will be challenging, but the scope to reach customers with a more focused offering has never been greater.