Insights: Leveraging the ‘omni’ experience
Now Reading
Insights: Leveraging the ‘omni’ experience

Insights: Leveraging the ‘omni’ experience

Seven tips to leverage omnichannel retail in the Middle East

Gulf Business

There is nothing quite like plopping on the couch on a balmy day and browsing through the site of your preferred fashion brand – we’ve all been there and swear by the feeling. E-commerce has made inroads into our lives, bringing convenience at our fingertips. Conversely, someday when you are strolling through the aisles of a brand outlet in a mall and stop curiously to check out an outfit, you strike an instant connection – a tactile experience of possibly touching the apparel, feeling the material, and trying it on.

Today, in the Middle East, as customer movements driven by pandemic-induced digitalisation and “revenge buying” abate and structural trends gain a foothold, the lines between the “convenience” of e-commerce and the “connection” of brick-and-mortar retail are getting blurrier. Enter omnichannel retail.

Though omnichannel retail – a strategy in which retailers engage customers through multiple digital and physical touchpoints – is not a novel phenomenon, it is increasingly becoming a standard practice in the region. According to a survey, over 55 per cent of the regional population is well-versed in both physical and digital shopping experiences. For a retailer, the growing “phygital” propositions necessitate differentiation. The following are seven tips to give your omnichannel strategy a competitive edge.

  1. Moving from vendor-driven to customer-led services

Historically, a retailer’s product/service innovation was limited to the vendor/supplier’s capabilities. As a single supplier deals with multiple brands, the room for differentiation was small, except for surface-level embellishments. Today, with consumers displaying heightened awareness of the value propositions of different brands, it calls for a paradigm shift in strategy: Moving from vendor-driven to customer-led services. The transition involves first determining customer expectations and then selecting vendors who can support the required services. Data analytics plays a pivotal role in helping understand the customers and facilitating the transition.

2. Predicting instead of reacting

Omnichannel retail requires different inventory pools as the lead times vary between physical and online channels. Say a sports brand has an estimated volume of shoe sales in a market – if a single inventory reactively supplies shoes to different stores or e-commerce warehouses, customers’ shopping experience takes a hit in the event of stock unavailability, long delivery times, etc. Retailers can instead integrate deep-learning models with ERP software to accurately forecast demand across channels and locations. Such insights help optimise inventory levels across the supply chain and ensure frictionless shopping experiences.

3. Staying in sync with behavioural shifts

Humans are creatures of habit. Though the pandemic concerns are over, the shopping habits picked up during the lockdowns continue to define consumerism in the retail sector. The current traction of e-commerce can be linked to that phenomenon. With digitalisation set to continue, e-commerce users will only increase. That presents retailers with a real estate dilemma. As per anticipated trends, existing floor spaces can be remodelled into warehouses or more immersive, experience-oriented outlets. For example, Xiaomi recently launched its biggest store in the Middle East, in Dubai, despite predominantly online sales to possibly ramp up its omnichannel pursuits.

4. Understanding demographical correlations

Though the pandemic and resulting uptick in digitalisation led to changes in channel preferences, the structural trends remain important: Millennials and younger generations prefer e-commerce and the older ones like traditional channels. Delving deeper, you’ll find that millennials are more responsive to rewards, loyalty programmes, cashback, etc. and more inclined toward varied digital payments than their predecessors. Such demographical factors must be considered before formulating an omnichannel retail strategy.

5. Revamping and addressing gaps in supply chains

Brick-and-mortar retailers who pivoted to e-commerce without supply-chain considerations are encountering sourcing and logistical issues, higher exchanges – all leading to customer churn. The silos between suppliers impact the efficacy of omnichannel strategies. Instead, by ensuring cloud-based access to a single source of truth across the value chain, facilitated by customer data platforms, retailers can unlock higher efficiencies. In fact, with such infrastructure, you can drive “inventory sharing” and explore cross-border selling. For example, Adidas and Zalando have a partnership for a shared inventory. If an enquired product or a specific size is unavailable on Zalando, it redirects to Adidas, and vice-versa.

6. Different rules for different retail

The omnichannel rules for the sales of, say, electronics vary considerably from those of luxury fashion. The latter requires a touch-and-feel experience, whereas electronic products of reputable brands are easily sold online. So, based on retail verticals and their digital-physical buyer preferences, omnichannel controls must be defined. Some of these preferences – such as trying and buying luxury items – will remain relevant for the foreseeable future.

7. Building a dedicated omnichannel team

Unlike digital-first brands, those pivoting to omnichannel from brick-and-mortar channels will find integration challenging due to old habits and silos. A plausible solution is to build a team designated to strategise omnichannel operations and responsible for cross-channel collaborations, congruency, and value creation. Dedicated teams may not be required for digital-first brands building a physical footprint because the approach is already rooted in digitalisation and thus devoid of historical silos. In any case, brands can benefit tremendously through a dedicated team for omnichannel oversight.

Shehbaz Shaikh is chief retail officer at REDTAG.

Read: E-commerce strategies: How to prepare your business for success

You might also like


Scroll To Top