CEO SE­RIES: HANI SAIF CIO of ex­tra

Arabnet - The Quarterly - - Industry Stories - By Lynn El Bizri | @lnlne

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.”

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