The opportunity for digital in the Middle East is enormous, but customer expectations are very high, and few retailers are meeting them. The CEO of the Alshaya Group, John Hadden, in conversation with Debashish Mukherjee, Partner, Middle East & Africa Lead, Consumer & Retail, Kearney, reflected on how retailers can make better decisions in digital to drive growth. 

The Middle East consumer is the most digitally engaged of anywhere in the world. The penetration of digital engagement here is double the levels of Europe or the US. That is a huge opportunity. The future of retail is digital and mobile, and there’s no better place to do it than the Middle East.

But retail is far behind the consumer in the region. Companies need to invest in their digital offer to avoid being left even further behind. The challenge is to balance delivering digital transformation at pace while also delivering return on investment.

Digital is not the same as IT. The mindset needed to run a digital business is completely different from running IT systems. IT is critical from a back-end perspective, but it’s the front-end focus that allows retailers to truly understand the customer. Successfully implementing digital means enhancing the customer-facing interaction while providing people with the tools they need to do their jobs.

Digital needs to be built into the retail experience from the outset. A new store launch needs to be accompanied by an e-commerce proposition, a transactional website and its own app. Retailers need to deliver all three experiences simultaneously – the in-store experience, the e-commerce experience, the app experience.

But retailers also need to recognize that different segments need to be categorized differently for digital. The pace of digital change in F&B, for example, is much greater than in other sectors like apparel, where companies have to provide an engaging digital experience in an environment where they have to manage returns and exchanges.

The fundamentals of retail remain the same. For a brand to benefit from digital, it has to be a successful brand. Introducing anything digitally within a brand that is not performing is a waste of resources. The fundamentals of product price positioning are the same regardless of digital. Retailers looking at digitalization should focus their efforts on the brands that have the real power to continue to grow.