The digital transformation of the Middle East’s retail sector in the last five to seven years has brought immense value in crafting more agile supply chains that accommodate demand. In a recent PwC study, retail CEOs in the region cited key factors to achieve this being their ability to manage faster delivery times, support easier product returns, and balance stock volumes.
“It would be naïve to underestimate the pandemic’s influence on many companies’ digital transformation,” says Sunil Nair, Group CIO at GMG. “The pandemic affected our ability to conduct business in-person, so companies had no choice but to quickly roll out digital tools and amend plans to ensure business continuity. However, many companies have been at the forefront of digital transformation for years, and digitalization has long been part of our business strategy. What has emerged in 2022 is a more robust omnichannel model that leverages the digital innovations of recent years that co-exist with one of the world’s most exciting physical retail landscapes. For example, we often see customers utilizing our own online portals to research merchandise, and then come to the store to see, touch, and complete the purchase.”
In the post-pandemic era, the retail sector is being defined by a “multi-channel approach” where online and offline channels adapt to both compete and support each other. Knowledge and adoption of big data, cloud transformation, internet of things (IoT), augmented reality, and robotics are necessary to remain agile. Retailers will also see more traction in how digital payments are improving, as well as radio frequency identification (RFID), connected stores, biometric security, smart warehouses, and personalized customer experiences.
“Successful digital transformation should start with your top business objectives and being inclusive of all stakeholder viewpoints,” he says. “The most important question that a CIO should ask is, ‘What are we hoping to achieve with our digital transformation initiative?’”
GMG’s strategy revolves around the simple philosophy of daring the company and others to deliver greatness to partners and customers while it constantly challenges itself to examine innovative ways to bring added value to partners and customers. The use of advanced technologies is fundamental to this ambition. According to Nair, increasing speed in delivery is one of the most important things. “The ‘last mile’ generally constitutes the biggest headache for e-commerce operators,” he says. “Recent data suggests that last-mile delivery costs often account for more than 50% of the total cost of shipping and around 40% of the entire supply chain costs. After trials in the US and Europe, autonomous delivery robots may soon appear on a sidewalk near us. Several such projects were announced in Dubai last year, such as Careem and Kiwibot partnering to develop food and grocery delivery robots. Urban planning fundamentals in the region favor such innovations, with the large self-contained residential communities here well suited for autonomous deliveries.”
GMG has structured its framework on the Run, Transform and Grow business model, and its digital initiatives aim to drive efficiencies across those pillars. “In order to gear up for the continued surge in e-commerce demand, GMG deployed an expanded omnichannel ecosystem that enhances customers’ accessibility to leading sports brands through digital and mobile-commerce platforms,” he says. “Our omniverse ecosystem integrates artificial intelligence (AI) capabilities from Einstein, enabling us to hyper-personalize customers’ experiences.” The GMG Sports vertical, for instance, brought new technologies and investments into three key areas: the customer journey, access to inventory across stores, and customer care.
The next gen of customer experience
Today, retailers are adopting data-driven technology to provide a seamless shopping experience, and those that amalgamate their silos of data across the organization stand to gain a competitive advantage. “More importantly, they can enhance their ability to better understand their customers, enabled by technologies such as the cloud, predictive and cognitive analytics, IoT, and AI,” says Nair. “The customer is the true custodian of change, and every customer interaction should be data driven. Therefore, we believe that offering an immersive customer experience is key for any retailer, whether it’s leveraging technology like AR, VR, blockchain, or the metaverse. Responding to changing consumer needs with agility and promptness will set a retailer apart from its competitors.”
As a part of its company-wide digital transformation, GMG has adopted a cloud-first approach by leveraging advanced data-intelligence solutions, including big data and analytics, to drive innovations. Product development is the next journey.
“Our digital strategy is data-driven, and our data strategy is consumer-driven,” says Nair. “In 2021, GMG transitioned towards Unified Commerce through a customer-first approach to bring together the front-end experience and back-end applications to better organize and analyze data to derive meaningful customer experiences. The next step is to incorporate AI, machine learning (ML), and big data in our architecture to better understand our customers’ needs and deliver solutions that fit their demands.”
On the flipside of demand, of course, is supply, and how much inventory should be on hand for any specific shopping season is a big concern as well. Some companies rely on an imperfect mix of historical receipts, conjecture, and hope and the result would often widely miss the mark, leading to warehouses overflowing with outdated merchandise. “Today, a slew of AI solutions is accessible in the market and are quick to deploy in managing stock decisions,” says Nair. “Some analysts have projected that retailers will spend $7.3 billion on AI this year, compared to $2 billion in 2018. These investments not only assist in warehouse stocking decisions, but can be used to inform customer experience management, analyze purchases per retail location, and forecast sales across product categories. AI has gone from a future consideration to a must-have capability in the retail supply chain.”
Retailers collect an overwhelming amount of data to better understand customer profiles, from point-of-sale transactions to inventory levels. But it’s what is done with the data that’s the differentiating factor between a company and its competitors. One of the biggest challenges for retailers, especially those with a significant online footprint, is how to manage the flood of new data that comes in at peak shopping periods. Before cloud, retailers were forced to overprovision their data center resources to accommodate a few months of intense usage per year. The cost of extra disk drives, rack space, power, cooling and other support infrastructure needlessly ate into retailers’ margins. “With cloud, however, retailers can scale their data storage capacity, processing power, and networking abilities many times over with the click of a mouse and at a fraction of the cost of on-premise infrastructure,” says Nair. “Reversing to the default position is just as easy with no effect on operations.”
Everyone in retail is at a different stage of maturity, but with speed and quality of data comes better support decision making. “The more effectively you mine your data with advanced analytics, the more you can optimize the process and improve decision-making across your business,” he says. “We understand that a robust digital strategy is crucial in sports retail and our other business divisions, and as part of our digital transformation, we’re focused on introducing new technologies and investments across our businesses and markets.”
