Re­tail: money, time, frus­tra­tion...

Cheil MENA’s strate­gic plan­ning di­rec­tor Olga Kudryashova says mo­bile pur­chas­ing power in UAE is un­der­es­ti­mated

Campaign Middle East - - FRONT PAGE - Olga Kudryashova, strate­gic plan­ning di­rec­tor, Cheil MENA

In 2011, when only 11.9 per­cent of Kore­ans shopped us­ing their mo­bile phones, Tesco Home­plus of South Korea opened its first vir­tual store net­work in sub- way sta­tions. By 2013 this num­ber reached 62.6 per­cent, ac­cord­ing to Korean Cham­ber of Com­merce and In­dus­try survey. While the idea of a vir­tual store trav­elled the world, sur­pris­ingly, it has not made it to the UAE yet.

I think the mo­bile pur­chase power of the UAE res­i­dents is largely un­der­es­ti­mated. I say this be­cause Google and Ip­sos re­search in 2013 sug­gested that as many as 38 per­cent of UAE smart­phone users made a pur­chase via their phone. This fig­ure will shoot up even fur­ther if all the in­com­plete trans­ac­tions were to be con­sid­ered - that is when mo­bile phones were used to aid the shop­ping process and pur­chase deci sions l i ke com­par­ing prices, s earch­ing f or prod­ucts or check­ing the store lo­ca­tion.

UAE re­tail­ers are very close to re­al­is­ing that they are in a per­fect po­si­tion to ben­e­fit from the con­sumers’ de­mand for an om­nichan­nel re­tail ex­pe­ri­ence.

We all know that tech­nol­ogy is chang­ing shop­ping be­hav­iour at a faster pace than ever be­fore. ( You’re never alone with a smart­phone and this mod­ern day shop­ping part­ner is in­form­ing our de­ci­sions on how, where and when we shop. The re­sult? Re­tail is now in the age where sell­ing has to be ev­ery­where, in­stant and per­sonal.)

The unique mall cul­ture of the Mid­dle East of­ten puts ex­pe­ri­ence ahead of con­ve­nience. But tech­nol­ogy in re­tail is not only about con­ve­nience. In South Korea, the change i n shop­ping habits is stag­ger­ing and of­fers a salu­tary view of where t he high streets and fash­ion av­enues of the rest of the world could be head­ing.

Smart play­ers have re­alised that we don’t shop l i ke we used to. And they’ve gone one step fur­ther: they’re start­ing to un­der­stand that real peo­ple – you and I – are con­strained by not one, but three bud­gets when we shop. Of course there’s the fi­nan­cial one; but there’s also the time bud­get. And i ncreas­ingly, most of us have a frus­tra­tion bud­get – if some­thing’s not easy and straight­for­ward, we’ll move on.

All three of th­ese el­e­ments add yet another layer of com­plex­ity to what is no longer a sin­gle, or lin­ear, path to pur­chase. To­day, shop­ping i s an i nt er t win­ing j our­ney of search­ing shop­ping and shar­ing – fu­elled by mo­bile. But the com­plex­ity we face in re­tail is not an ex­cuse, we must de­liver simplicity in our re­tail ex­pe­ri­ence. If we don’t we will ex­ceed our shop­per frus­tra­tion bud­get.

Tech­nol­ogy is sim­pli­fy­ing shop­ping. Take show room­ing for ex­am­ple, this is not new. Shop­keep­ers at tra­di­tional souqs say that in the times of their grand­fa­thers peo­ple would be shop­ping around for the best value. The same can be said to­day, but tech­nol­ogy has made it much eas­ier and we can shop around at home or in-store.

This shift has fun­da­men­tally skewed the price/ qual­ity value equa­tion. Whereas once it was limited to price x qual­ity, now it is ( price x qual­ity) ÷ con­ve­nience. And tech­nol­ogy con­stantly man­ages to re­set our ex­pec­ta­tions of con­ve­nience. Ev­ery time we ex­pe­ri­ence some­thing new that makes our shop­ping ex­pe­ri­ence more con­ve­nient or per­sonal, it re­sets our ex­pec­ta­tions of what other re­tail­ers should be do­ing for us.

Does this fast- mov­ing, ever-blurry land­scape mean the end of the high street? Well yes, maybe, and cer­tainly in its cur­rent guise. But not com­pletely.

Sure, the cus­tomer is king, and he is a more de­mand­ing ruler than ever be­fore.

But glob­ally, lessons from the demise of many well­known re­tail­ers in the past few years are be­ing learned; we know that re­tail­ers hold­ing on to for­mats which have out­grown their rel­e­vance are ig­nor­ing the l i ghts in the tun­nel com­ing to­wards them. Stores still have a big role, but only if they serve the cus­tomer and are rel­e­vant to how they want to live and shop. They have to put the per­son at the heart of t he equa­tion and ac­tiv­ity has to i nspire ‘Search’, ‘Shop’ and ‘Share’ among con­sumers.

Lay­er­ing search, shop and share with the new ‘ bud­gets’ – fi­nan­cial, time and frus­tra­tion – to­gether to de­liver change is what could make part of an ag­ile f uture- f ac­ing re­tail land­scape.

This year two lead­ing malls of Dubai, The Dubai Mall and Mall of The Emi­rates, have made a step change and bro­ken the ice by giv­ing f r ee wifi ac­cess to their vis­i­tors. Beam tech­nol­ogy has been a hot topic among re­tail­ers and their agen­cies. Souq Planet prom­ises to bring the first dig­i­tal re­tail e x peri e nce to Abu Dhabi in 2015. That’s a recog­ni­tion that the mod­ern age con­sumers have dif­fer­ent ex­pec­ta­tions when it comes to ser­vice and that the 78 per­cent smart­phone pen­e­tra­tion in the UAE ( as re­vealed by 2014 Nielsen Smart­phone In­sights survey) can no l onger be ig­nored.

The year 2015 is set to mark a new page in the his­tory of Mid­dle East re­tail.

Kudryashova... ‘Free wifi in malls is a step change’

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