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GCC retailers must be ‘tech savvy’
Study shows how retailers manage a multi-channel environment on a global scale.
June 4, 2013 7:02 by kippreport
The 2013 Achieving Excellence in Retail Operations (AERO) Study revealed that globally leading retailers are more disciplined about collecting data, measuring activities, acting on their insights, and measuring again to see the results.
The study also shows how retailers globally manage a multi-channel environment. In this new environment customers will often return products to a store that they ordered online or ask a store employee to order an out of stock item through another channel. When employees are not measured on the success of non-store channels, they have little incentive to encourage the growth of those channels.
Regional players too need to evaluate integrating effectively across multiple channels, considering the exponential Internet growth witnessed in the GCC, with Internet users increasing by more than 2000 per cent from December 2000 to June 2012 and customers becoming more channel-savvy.
On the employee front, the AERO study analysed the importance of field managers. The study findings show that across the board – at the district and regional level and above – managers are overseeing more stores than in the 2010 study. Retail field managers are spending too much time on administration and not enough time in the field.
On the flip side, the front-line staff who interact with customers all day long, gaining valuable insights into customer needs, are often now leveraged enough by retailers. Adam Pressman, principal of research firm A.T. Kearney and co-author of the study says, “The problem today is a lack of formal requirements or processes to gather these employee insights. Leading retailers create formal pipelines that capture and use these insights.”
Given the decidedly attractive retail opportunity in GCC, those thinking about strengthening their core retail capabilities now are expected to capture a bigger share of the retail pie in the near future.
“Rising consumer expenditure in categories like communication and durable goods in the GCC urges retailers to invest in category management skills to capture growth, especially in a market where suppliers, in most instances, dictate assortment decisions,” explains Martin Fabel, partner at A.T. Kearney Middle East.
“On the other hand, retailers in historically large but slow growing categories like food and grocery need to constantly think about operational excellence, beyond store openings, to ensure sustainability of business in the long run.”