CEO SERIES: HANI SAIF CIO of extra
Maya Hojeij interveiws Hani Saif to discuss extra’s move to ecommerce, the challenges they have faced, as well as the technology behind the platform and the vital role it plays.
Providing customers in Saudi Arabia with a complete shopping experience for electronics and home appliances, extra was established in 2003. Starting off with only brick-and-mortar stores, extra decided to set up the first ecommerce platform in 2011 led by CIO of extra, Hani Saif. Today, the company has over 12 million total shoppers, 12,000+ products, and 42 brick-and-mortar stores across the Kingdom as well as a store in Bahrain and Oman.
During Arabnet Digital Summit 2017, Maya Hojeij, editor-in-chief and presenter from Dubai TV, sat down with Hani Saif to discuss extra’s move to ecommerce, the challenges they have faced, as well as the technology behind the platform and the vital role it plays.
What did the move to ecommerce mean to the company in 2011? We opened our first brick-and-mortar store in 2003. From 2003 until 2010, we only had a website that was being used to check our catalog of items. In 2011, we believed that we should be pioneers and set up the first ecommerce website in the Kingdom so that customers could buy, sell, and return items online. extra’s strategy has always been to think ahead, and when we started our electronics store featuring the best buy model, it was the first store in the Kingdom to do so at the time.
Have customers accepted the move to ecommerce? In 2011, we launched our ecommerce platform to complement our existing stores. During that year, the ecommerce website was not that successful given the problems in online payment and delivery in Saudi at the time. It’s completely different today, as we have advanced in several fields, despite the challenges that include peoples’ preference for cash payments, and Saudi’s secure financial system that does not easily allow for alternative payment methods. Between 2015 and 2016, our online revenue grew by 250% and by 150% in 2016 alone, which was proof that people were starting to embrace the idea of online shopping.
Extra has around 42 stores in Saudi Arabia. If we are going to speak comparatively, what is the percentage of sales conducted online vs. at the brickand-mortar stores? Brick-and-mortar stores are the major drivers for retail in the region. Today, only 10% of our business is done online, however this percentage and the growth rate year over year is very encouraging. US online retail, for example, is only 15% of the whole retail market, and while in the MENA region we are only at 2%, this percentage is forecast to rapidly increase in the coming years.
What are the key features or milestones that have helped extra to excel? One of our biggest advantages is that we are located in 26 cities in the Kingdom. We also substantially focus on customer service and convenience. For example, if a customer buys something online before 2pm, he or she can pick it up the same day, and if they buy any large electrical appliance we don’t charge them a delivery fee. We also recently introduced consumer financing, or installment payments, that we believe will improve customers’ shopping experience. So given the economic situation in the region, we constantly study ways to ensure our customers’ convenience and comfort while shopping at our stores.
In your opinion, what do companies venturing into ecommerce need technologically in order to advance? From my perspective, it is important to utilize the data that we collect and that our customers have given us access to. For example, the shopping experience, habits, number of visits, status of the customer, and customer service are all important data that help us to serve our customers better. Data collection requires a lot of investment as well as analytical tools and skilled labor, so big data is one of the key technologies we plan to adopt.
How can data be used to improve customer service? You have to view touchpoints with the customer inside the store, outside the store, and even upon delivery, and every touchpoint must be reviewed to see how it can be made more efficient, productive and convenient. Moreover, we need to work with customers individually and not just as part of a group. Personalization is key, and this what we are trying to do online versus offline.
“Moving forward, technologies such as VR, AI, mobile wearables, and IOT will allow brick-andmortar stores and online stores to work together seamlessly.”
What is your take on Amazon getting into MENA, given that extra is the number one ecommerce site in Saudi Arabia? I don’t believe Amazon is a risk or a threat, but rather an alert for every retailer in the region. Amazon wouldn’t be venturing into MENA unless they knew that the current retail market is ripe for disruption. It’s a great opportunity for big retailers like us to enhance our customer experience, delivery system, product portfolio, payment method, and all the features that Amazon has already invested in. However, I do believe it will be some time before Amazon enters our markets.
Do you think all brick-and-mortar stores should close or should they be integrated with online stores, and if so, how? Should we cater to different ages as well? I believe we should focus on the consumer’s experience, whether online or offline, as well as at every touchpoint, it’s all about creating an integrated omnichannel experience. Customers aged 13-35 are comfortable with shopping online and prefer it, so we do need an online presence. In my opinion, if we rely solely on an online shop, we will not succeed, and the same applies for a brick-and-mortar store without any online strategies. Therefore, it’s no longer a choice for retailers to utilize one channel. Moreover, moving forward, technologies such as VR, AI, mobile wearables, and IOT will allow brick-and-mortar stores and online stores to work together seamlessly.
What would be the biggest challenge that you have faced in your career, from a technological perspective, and how did you overcome it? In the past, IT and technology were not viewed as priorities by the decision makers in the company. They believed that IT, just like any other department, should be operating independently with its own given tasks, requirements and reports. However, I personally believe that technology is one of the key components of a company and must be laid down at the right time. If we were late, we would have missed a great opportunity. I struggled to push the right technology early on and ensure the foundation was laid and invested in at the right time.
What is your advice for startups in ecommerce? From my experience, ecommerce cannot be underestimated, and is a complicated business, especially for startups. It is not merely about setting up a website, but an entire business department behind the scenes. Startups need to know that venturing into ecommerce is a big investment that needs to be studied carefully and seriously. If the startup doesn’t know what it needs to do, they can always test their products and market using an existing marketplace, which is cheaper and less risky. Once ready, they can then shift to their own online business. n
“Startups need to know that venturing into ecommerce is a big investment that needs to be studied carefully and seriously. If the startup doesn’t know what it needs to do, they always can test their products and market using an existing marketplace.”