ShapingTheNextPowerhouse: A peek into the next growth chapter

This panel discussion at the Middle East Retail Forum (MRF) 2024 brought together CEOs from retail and non-retail organisations to discuss how technology and innovation are driving change in the retail landscape amid macroeconomic factors at play.

Differentiate to grow

Setting the tone for the panel discussion, moderator Bhavesh Morar, Consumer & Retail Industry Leader, Deloitte observed that the consumer landscape is changing. Their buying behaviours and expectations are changing. Amid such rapid changes, what would be the “expected” growth areas for retailers, he asked.

Starting with an interesting perspective, Leena Khalil, Founder, Mumzworld highlighted the importance of localisation as a growth area. “One of the things that became clear in 2024 is the importance of focusing on the local identity, despite operating in a multicultural environment,” she said. “We did a lot of campaigns this year doubling down on that identity as an Arabic-first platform. The world is full of innovation, but we have learnt that there are generational assumptions when it comes to parenting. And we don’t want to revolutionise parenting; we want to make it easier by leveraging technology while connecting with the consumer on a more personal level.”

Middle East is a growing economy, so, there is a natural sense of growth fuelled by population expansion, real estate growth etcetera and measures undertaken by the public sector. “What’s crucial is for us to grow faster than our competitors in a changing landscape,” observed Vikas Chadha, Chief Executive Officer, Jumbo Electronics. “At Jumbo, we are focussing on three areas to differentiate ourselves. These include offering an unmatched experience despite dealing in the same products as our competitors and operating in an inflationary environment; enhancing customisation and cross-selling opportunities; and ensuring that consumers use the products through the lifecycle.”

The overall market is doing “fine,” agreed Manish Sabnis, Chief Executive Officer, Grandiose. He also added how this “young” brand in the grocery space can customise and personalise, thereby creating a differentiating factor in a market where bigger grocery retailers tend to be “standardised” due to legacy. We can customise our product assortment – offering Armenian cuisine, products from Costa Rica, Colombia, Georgia based on catchment areas. In addition, a move towards heathier offerings and commitment to operate suitably help us to resonate with our customers.

Along with personalisation, social wellbeing and sustainability are indeed key aspects that are creating levels of differentiation in the marketplace, Morar reiterated.

Enabling choice with tech

A lot of development is happening in the region offering customers the choice to shop the way they want, Morar observed. But how does that impact the strategy between traditional businesses and e-commerce operators?

Accelerated by the pandemic, e-commerce penetration has been increasing year-on-year. But traditional retail will never die, opined Emin Imer, General Manager, Hepsiglobal. “Online sales exploded during the pandemic, but the trend reversed right as traditional retail picked up.” Brick-and-mortar players need to put more focus on their online business to offer consumers more options, making the shopping journey seamless. Of course, from country-to-country culture-to-culture the shopping experience varies, so it’s crucial to understand the consumer.

At this point the conversation turned to how retailers and technology enablers can collaborate to offer more choice and a better experience to consumers.

The biggest moving part is the changing behaviour of the consumer, and the biggest challenge for a retailer is to know their customers, emphasised Sadique Ahmed, Chief Executive Officer, RetailGPT. “Our research indicates that retailers know less than 10% of their customers, that’s the industry average which differs from category to category. Discovery of a consumer is the biggest challenge that technology can solve to help retailers understand what customer needs are and thereby find ways to increase the share of wallet. Another important factor is enabling brock-and-mortar with a digital extension to serve more people within the primary, secondary and tertiary catchments, enabling retailers’ growth strategies.”

Markets must grow

The Middle East continues to be an attractive hub for investment. How is that positively impacting local businesses, Morar asked.

Even three decades ago, expatriates were given a “hardship allowance” when they moved to Dubai to work, which was higher if they moved to Sharjah, shared Hameed Noor Mohamed, Managing Director, Alpen Capital. It was very difficult to attract talent in the old days. But now people have the ability and choice to get the right people out here facilitated by government regulations with the foresight of putting in the right infrastructure and ecosystems to attract people, and that naturally leads to growth in business.

The fiscal policies of the government have been nothing other than “spectacular,” concurred Mark Tesseyman, Chief Executive Officer, LIWA Trading Enterprises. “When the world was falling apart during the pandemic, I think all the policies that were implemented are generally coming to fruition now.”

“However, what we need is more people across the GCC – residents along with tourists – to grow sustainably and prosper. Interestingly, we see some of our partner businesses prepared to come and base themselves here, which means we will see a lot of regional hubs as well as manufacturing facilities. For instance, we recently signed a deal with a manufacturer from China who has their own label and brand and are considering bringing one of their manufacturing bases here, because it’s closer to their markets. These things would never happen without the fiscal policies. I think the structure and policies are there. It’s just about how those things will manifest over the few years,” he added.

Investment priorities…if money wasn’t a constraint

“If money was not a constraint, what would be your investment priority,” Morar asked.

Here’s what the panellists said:

I’d spend all my money to understand the consumer – Emin Imer

I’ll invest on data and AI to futureproof – Hameed Noor Mohamed

Supply chain enablement to align the assortment in the region with global assortment – Leena Khalil

I’d invest all my money to understand the customer, CRM, loyalty and analytics – Manish Sabnis

Invest in predictive analytics to understand future trends to react accordingly – Mark Tesseyman

I’d spend money to enhance innovation – Sadique Ahmed

I’d invest all my money in personal commerce, starting with the CRM system which captures data in a seamless manner – Vikas Chadha